Strategic Suppliers 2018 in Review

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Data as at: 05 February 2019

Strategic Suppliers are defined by the Cabinet O!ce as: "Those suppliers with contracts across a number of Departments whose revenue from Government according to Government data exceeds £100m per annum and/or who are deemed significant suppliers to Government in their sector." For more information, see this information from the Crown Commerical Service and the Cabinet O!ce: https://www.gov.uk/government/publications/strategic-suppliers

This analysis includes any subsidiaries, a!lliates and joint ventures of the companies mentioned. A list of these entitites is available on request.

This data is derived from public sector information (a) licensed for use by the UK Government under the Open Government Licence v3.0 and/or (b) from the EU Tenders Electronic Daily website licenced for re-use by the European Commission. This information remains the copyright of the UK Government and European Commission respectively. Strategic Suppliers - Overview The Cabinet O!ce designates 30 companies as 'Strategic Suppliers' to Government. These firms are deemed so important to the delivery of essential public services that the Government's relationship with them is managed centrally by 'Crown Representatives'.

2018 was a turbulent year for some Strategic Suppliers. Starting with the collapse of in the beginning of the year and continuing with mounting stock market pressure on several others. This culminated with the re-capitalisation of on February 5th 2019. Despite this, these 30 firms won over 1,000 contracts with a total lifetime value of £4.2bn from the wider public sector in 2018. As the chart below shows, they won substantially more in the first half of the year than the second.

Award Value £1.2B £1.4B £0.8B £0.8B

Est. Framework £1.4B £1.8B £6.0B £1.3B Value

Award Volume 328 250 235 221

Q1 Q2 Q3 Q4

Capita alone won 164 public sector contracts in 2018, more than any other Strategic Supplier and equivalent to 17% of the total number of contracts awarded to this peer group. PwC, first listed as a Strategic Supplier in October 2018, won 76 contract awards last year, and Deloitte, added in January 2019, won 69. EY is the only 'Big Four' firm not to be listed as a Strategic Supplier despite winning 45 contracts last year. Consulting IT Telecoms Breakdown by Volume/Categories Defence Outsourcing &

Oracle Accenture BT 45 32 ISS A/S Interserve 57 39 38 38 164

Capgemini 20 Fujitsu ATOS 13 12 Engie Amey Sodexo 25 14 13 Vodafone Virgin IBM Group PLC Media 20 34 29 53 15 DXC CGI

Microsoft 15

PwC Deloitte KPMG 76 69 65 Babcock 73 34

KBR is unmarked on this chart but recieved 0 awards; Motorola - 3 awards; Sopra Steria - 6; G4S - 15; Serco - 10 Strategic Suppliers - 2018 in Review Page 2 Strategic Suppliers 2018 - Historical Comparison The value of public sector contracts won by the Strategic Suppliers* declined significantly in 2018 - a decrease of £2.4bn (36%) on 2017. The volume of contracts awarded declined by a lower rate of 16% on 2017. The proportion of total contract value awarded to the Strategic Suppliers in 2018 almost halved on 2017, from 10.3% to 5.8%.

Value and volume of contract awards to Strategic Suppliers since 2017

2017 £6.6B 1,209

2018 £4.2B 1,034

£0B £1B £2B £3B £4B £5B £6B £7B 0 500 1,000

Award Value Award Volume

Proportion of total contract value awarded to the Strategic Suppliers since 2017

5.8% 10.3% £4.2B £6.6B 2017 2018 Strategic Suppliers Other

In 2018, two thirds of the Strategic Suppliers won a lower value of new contracts than in 2017. Mitie was the biggest winner, winning awards worth £616m more than in 2017. The biggest loser was Amey, which saw a drop of £1.2bn in the value of new contracts won.

Strategic Suppliers - change in 2018

2018 Mitie £616M Capita £138M Accenture £67M ATOS £59M IBM £58M KPMG £36M Sodexo £16M Virgin Media £11M Deloitte £10M Microsoft £8M ISS A/S £3M Oracle -£4M Interserve -£5M Sopra Steria -£6M CGI Group -£15M Vodafone Group PLC -£18M Capgemini -£27M DXC Technology -£60M Serco -£61M PwC -£62M Atkins -£61M Kier Group -£95M Fujitsu -£121M Engie -£241M BT -£360M G4S -£434M Babcock -£600M Amey -£1,209M

-£1,500M -£1,000M -£500M £0M £500M £1,000M £1,500M Di#erence in Award Value

* This comparison is of contract awards to the current set of Strategic Suppliers. This list has changed over the years, with some firms (e.g. Carillion) exiting the list, and some (e.g. PwC) only being added in 2018. This analysis excludes contracts awarded to joint ventures between multiple firms, and unless explicitly stated otherwise, includes only analysis of contract awards, not frameworks.

Strategic Suppliers - 2018 in Review Page 3 Awards & Frameworks 2018 By award value, Mitie was the top Strategic Supplier in 2018, winning £715m in awards, including a £514m Home O!ce contract for immigration enforcement services. Capita's revenue mix has changed so significantly in the last few years that today it could as easily be designated an IT supplier as an outsourcer in the classic sense. If it were, it would be the largest IT sector Strategic Supplier by a considerable margin. Award Framework Awards and Frameworks Overview 2018

Outsourcing Mitie £715M £572M 42 53 & Construction Amey £656M £296M 14

Capita £489M £912M 94 164

Kier Group £260M £1,235M 71 38

Interserve £233M £880M 31 38

Sodexo £190M £1,384M 177 13

Serco £105M £266M

Engie £75M £937M 33 25

ISS A/S £63M £513M 187 39

G4S £63M £271M

IT ATOS £189M £172M 27

DXC Technology £153M £4M 12

IBM £130M £11M 20

Accenture £121M £2,587M 28 32

Fujitsu £92M £1M 13

Capgemini £51M £13M 20

Oracle £40M £0M 45

CGI Group £25M £1M

Microsoft £19M £1M

Sopra Steria £4M £11M 6

Telecoms BT £169M £1M 57

Virgin Media £32M £3M 29

Vodafone Group PLC £11M £1M 34

Motorola £2M £91M

Defence Babcock £143M £138M 47 34

Consulting Deloitte £96M £49M 43 69

KPMG £49M £145M 48 65

PwC £48M £47M 37 76

Engineering Atkins £23M £97M 82 73

KBR £11M 5

£0M £900M £1,800M £2,700M £0M £900M £1,800M £2,700M 0 100 200

Award Value Est. Framework Value Award & Framework Volume

Strategic Suppliers - 2018 in Review Page 4 Buyers

In 2018 by far the highest proportion of contract value awarded to the Strategic Suppliers came from Central Government. This was driven less by number of awards than by the average size of individual contracts, which was twice as high in Central Government than in Local Government.

Breakdown of Strategic Supplier 2018 Contract Award Value by Buyer Type

Central Government Local Government NHS Other £2,669M £733M £226M £618M (62.9%) (17.3%) (5.3%) (14.5%) 499 265 82 188

Central Government NHS Local Government Other

Of the overall decline of £2.4bn in the value of contracts awarded to the Strategic Suppliers in 2018, two thirds was driven by the £1.4bn drop in the contribution from Local Government. Central Government's award value was flat year on year at £2.7bn.

Strategic Supplier Award Value by Contracting Authority Category since 2015

2017 Central Government £2.7B (31%)

Local Government £2.1B (-14%)

NHS £0.2B (214%)

Other £1.5B (59%)

2018 Central Government £2.7B (-2%)

Local Government £0.7B (-66%)

NHS £0.2B (-4%)

Other £0.6B (-60%)

£0M £500M £1,000M £1,500M £2,000M £2,500M £3,000M Award Value

Strategic Suppliers - 2018 in Review Page 5 Top Central Government Buyers (Award) - 2018 The Home O!ce was the Central Government department that purchased most from the Strategic Suppliers in 2018, largely driven by a £514m contract awarded to Mitie for immigration transport services. DWP awarded contracts to the largest number of Strategic Suppliers - 11 in total.

Top 10 Central Government Bodies by Value - 2018 ce ce ! ! ce ! for Her ce/CCS O Loans Safety Prison DEFRA Ofsted Justice Service ! Student Cabinet Scottish England Defence Health & National Northern Pensions Majesty's Executive Highways Education for Work & Ministry of Ministry of Ministry O Audit O Department Department Home O Land Regist.. Ireland Audit Company Ltd Company

Amey £375.9M £238.0M

Mitie £514.2M

Capita £0.0M £0.1M £225.3M £10.1M £0.6M £0.1M £0.0M

ATOS £135.0M £1.3M £37.4M

DXC £125.9M £18.0M £5.3M Technology

IBM £5.0M £79.6M £10.3M £0.5M £13.2M £16.0M

Interserve £21.1M £0.1M £0.7M £66.7M

Accenture £30.8M £11.2M £40.5M £0.9M

Fujitsu £28.0M £0.1M £51.0M

Babcock £0.9M £1.5M £43.4M £0.0M £0.1M

Capgemini £18.1M £10.2M £4.4M £2.3M

BT £0.5M £0.4M £30.2M

Deloitte £6.2M £3.8M £16.9M £0.3M £2.8M

PwC £1.6M £0.1M £22.8M £0.2M £0.1M £0.1M £0.1M

Kier Group £23.0M

G4S £21.0M

CGI Group £18.7M £0.1M

Serco £0.6M £16.0M

Virgin £14.3M £0.1M £2.0M Media

Sodexo £15.6M

Microsoft £9.6M £0.2M £2.8M £0.2M

KPMG £0.3M £0.0M £1.0M £0.3M £1.6M £0.2M

Vodafone £0.4M £0.1M £2.8M Group PLC

Atkins £2.8M £0.3M

Sopra £0.1M £2.5M Steria

Oracle £0.6M

Grand £596.1M £402.9M £271.6M £239.3M £238.0M £184.9M £160.4M £97.5M £85.7M £72.6M £16.0M £2.0M £0.2M £0.1M £0.1M Total

Strategic Suppliers - 2018 in Review Page 6 Highest Value Awards & Frameworks in 2018

Top 5 Highest Value Awards 2018

Contracting Date Contract Title Authority Awarded Parent Provision of In-Country and Overseas Escorting, operation and management Home O!ce 30/04/2018 Mitie £514M of Short Term Holding Facilities and Holding Rooms and related services

Area 10 Maintenance and Response Highways England 05/10/2018 Amey £326M Contract

01500 Scottish Court Custody and Scottish Prison 28/03/2018 Amey £238M Prisoner Escort Service (SCCPES) Service

Department for Test Operations Services (TOpS) 11/07/2018 Capita £225M Education

Department for Defra — UnITy Programme — Hosting Environment, Food 19/06/2018 ATOS £135M and Application Support & Rural A#airs

Top 5 Highest Value Frameworks 2018

Max. Contracting Supplier Distinct Strategic Contract Title Authority Date Awarded Award Count Suppliers

Facilities Crown Management Commercial 09/07/2018 47 11 £12B Marketplace Service

Crown Payment Solutions Commercial 30/10/2018 9 1 £10B Service

YPO - 000833 Yorkshire Apprenticeships Purchasing 13/07/2018 75 2 £8B and Associated Organisation Training

Public Sector Crown Travel and Venue Commercial 27/02/2018 7 1 £5B Solutions Service

DWP Estates Department Contractor for Work & 17/04/2018 17 3 £4B Framework Pensions

Strategic Suppliers - 2018 in Review Page 7