techUK calls for reform to government digital funding and procurements

techUK, in partnership with Henham Strategy, today published a report urging government to embrace fundamental reform of its digital procurement and funding models. The report highlights the opportunity for government and industry to work together to deliver more efficient, innovative, and outcome-focused public services while supporting the UK’s wider economic growth agenda.

The review, informed by extensive stakeholder engagement and case study analysis, warns that outdated funding structures, rigid procurement processes, and a focus on short-term solutions are holding back the potential of digital transformation. It argues that unless government moves away from procuring standalone products and adopts more strategic, partnership-based approaches, the ambition set out in the ‘Blueprint for a Modern Digital Government’ risks being undermined.

The report identifies significant inefficiencies in current procurement practices and calls for a cultural shift in how government delivers digital services. Among its recommendations are: strengthening digital and commercial capability across departments, ensuring procurement teams have the skills to collaborate effectively with industry; reforming funding structures, with a greater focus on resource expenditure (RDEL) to support long-term service development rather than one-off product purchases; and updating legacy technology to remove systemic barriers to transformation. It also recommends aligning public procurement with private sector best practice, making contracts more flexible, modular, and accessible to SMEs and embedding five guiding principles into digital procurement: Flexibility, Collaboration, Competition, Value for Money, and Pro-Innovation.

By operationalising these principles, the report argues government can unlock efficiencies, reduce delivery risks, and foster a culture of innovation that delivers for citizens and taxpayers alike.

Heather Cover-Kus, associate director for central government and education, said:
“Government has an ambitious vision for digital transformation, but this will only succeed if procurement and funding keep pace with innovation. This report makes clear that we must move beyond one-off, compliance-led procurement models and embrace flexible, collaborative approaches that focus on outcomes, value for money, and long-term impact.”

The report comes at a critical time, following the Procurement Act 2023, the Chancellor’s June 2025 Spending Review, and the Department for Science, Innovation and Technology’s (DSIT) Blueprint for a Modern Digital Government. Together, these developments provide a unique opportunity to reform how digital services are procured and delivered across the public.