Kier tops government contracts table with £1.4bn of work

Government issues prompt payment demands to suppliers

Kier earned more money from government clients than any other company during the latest financial year, according to a report published this week.

The Manchester-based contractor secured £1.4bn worth of work with state-run clients in the 12 months to March 2023, the study found.

Put together by procurement-insight specialist Tussell, the report analysed all published invoice payments by public sector bodies relating to that year.

Behind Kier, the next construction giant to feature on the earnings table was Balfour Beatty, in third, amassing £1.2bn, while civil engineering group Babcock was fifth with £1.1bn.

Support-services specialist Mitie and defence and aerospace conglomerate BAE Systems took the second and fourth most cash from the state respectively.

The report principally looked at the government’s strategic suppliers. These are private sector firms whose relationship with the government is centrally coordinated and monitored by the Cabinet Office.

Construction companies accounted for about a quarter of the 39 firms with strategic-supplier status in November, according to Tussell. The industry accounted for £5.5bn of recorded public sector spending last year, just marginally below the £5.6bn invested by the government in technology.

More than 40 per cent of defence spending was with construction companies in 2022/23, according to the report, as was almost a quarter of NHS investment.

As well the firms reaping billion-pound bounties, Amey received £923m, Equans £624m and Jacobs £377m. Mott MacDonald took £211m, according to the report, while Laing O’Rourke secured £120m, leaving it one place above Microsoft.

Meanwhile, Tussell pointed out that several companies without strategic-supplier status won substantial amounts of work with the government last year.

French-owned construction giant Vinci secured £892m, according to the study, while Willmott Dixon took £824m and Wates secured £728m.

“While procurement expenditure increased by 4 per cent in the last fiscal year to £222bn, the combined direct revenue of the strategic suppliers declined by 17 per cent to £18.9bn,” said the report.

“While the public sector’s reliance on the strategic suppliers appears to be gradually decreasing, a market share of 9 per cent in 2022/23 is still high relative to the 24 per cent of total procurement expenditure spent directly with all SMEs [small and medium-sized enterprises] in the same period.”

Tagged with: contracts Data government report strategic supplier Tussell

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