The Sovereignty Gap: UK's 'Buy British' Tech Goals Clash With US Dominance

The UK government's push for digital sovereignty is colliding with the structural reality of global tech procurement. While ministers frequently champion a 'buy British' agenda, a new report from the Institute for Public Policy Research (IPPR), as first reported by The Register, suggests that the actual domestic impact of this spending is marginal.

**The Reseller Illusion** According to reporting by The Register, IPPR research found that while 42.5% of spending with the public sector's 150 largest technology suppliers appears to be directed toward UK companies, the actual figure drops to 15.4% when looking beyond corporate headquarters. The discrepancy is driven largely by resellers who act as intermediaries for US technology.

IPPR notes that 43% of spending attributed to UK-headquartered firms goes to resellers. Two of the three largest recipients of public sector tech spending—Bytes and Softcat—together account for roughly £2 billion. When researchers traced these contracts to the original product creators, the United States emerged as the primary beneficiary, capturing £9.2 billion of the £19.2 billion spent with the largest suppliers.

**Concentration and Competition** The procurement landscape is heavily consolidated. The Register reports that just 150 companies receive 83% of public sector technology spending, with the top 15 firms accounting for nearly half of that total. Smaller suppliers are notably sidelined, receiving only 12% of government tech spending, compared to a 27% share across general government spending.

Transparency remains a significant hurdle. IPPR found that 89.9% of government IT contracts over the last year lacked a published record of how many suppliers bid for the work, complicating any assessment of true market competition.

**The AI Bundle Trap** The shift toward artificial intelligence is further cementing this dependence. While direct payments to firms like OpenAI and Anthropic appear low in government records, The Register reports that this technology is often bundled into existing enterprise software licenses and cloud agreements.

One prominent example is the rollout of Microsoft 365 Copilot to 505,000 NHS England staff. IPPR states this was executed under a national licensing agreement signed in June 2023, prior to the product's general availability, effectively locking out rival suppliers from competing for the work.

**A Shift Toward 'Middle Power' Diplomacy** The IPPR report, titled *Locked In: A Realist's Agenda for Digital Sovereignty*, warns that reliance on US tech creates a strategic vulnerability, citing US restrictions on Anthropic models and limited early access for the UK's AI Security Institute.

Despite a £500 million commitment to a Sovereign AI Fund, researchers argue that funding homegrown firms is insufficient to break Silicon Valley's hold. Roa Powell, a senior research fellow at IPPR, suggests the UK should pool buying power with other "middle powers," including Japan, South Korea, Germany, and France. Darren Jones MP, who authored the report's foreword, echoed this sentiment, stating that Britain cannot "go it alone" and must work with international allies to shape markets and secure access to frontier AI.