The UK Department for Science, Innovation, and Technology (DSIT) has announced the development of the National Digital Exchange (NDX), a digital marketplace designed to transform technology procurement in the public sector. The platform is expected to generate £1.2bn in annual savings by making tech purchasing more efficient and enabling public servants to rate suppliers.
According to the DSIT, the NDX aligns with the government’s Plan for Change, seeking to simplify and enhance public service delivery. Currently in the early stages of development, the platform is intended to enable public sector teams to obtain technology deals that have been pre-approved at prices negotiated on a national scale. DSIT indicated that an AI-powered engine will facilitate rapid supplier matching based on specific needs, reducing procurement times from months to mere hours.
“We’ve all heard the stories – months of red tape, tech that doesn’t deliver, and money wasted,” said UK Minister for AI and Digital Government Feryal Clark. “That’s not good enough for the people we serve. The National Digital Exchange aims to change that. It will make it faster, fairer, and focused on what works – with real reviews, upfront pricing and smart AI to match buyers with the right suppliers in hours.”
One of the primary objectives of the NDX is to increase participation from UK tech firms in bidding for contracts. The UK government has set a target to boost small business involvement by 40% within three years. The NDX initiative comes in response to findings from the State of Digital Government report, which identified fragmented procurement practices in the public sector. The report highlighted that 209 NHS secondary care organisations and 320 local councils manage technology contracts independently, thereby missing key bargaining power.
Despite the UK public sector’s annual spend of over £26bn on digital technology and a workforce encompassing nearly 100,000 digital professionals, there is room for improvement in resource deployment, the report found. Millions depend on public sector digital services daily, emphasising the need for effective procurement strategies. However, only 28% of public sector leaders are currently able to track supplier performance effectively.
While examples like the West Midlands Police Force’s application of AI in handling non-emergency calls show the benefits of shared solutions, such instances remain uncommon. The NDX will introduce a system where users can review and rate technologies post-purchase, akin to an app store model. This transparency aims to aid informed decision-making across public sector entities.
NDX accompanied by digital playbook for best practice tech procurement
The development of NDX includes revised procurement regulations and a “digital playbook” aimed at guiding officials towards best practices in tech procurement. This playbook ensures consideration of long-term impacts and social value in contract decisions, said DSIT.
Alongside NDX’s rollout, the government is exploring new funding models for AI and tech projects. These plans aim to bring a start-up approach to testing AI applications on smaller budgets before scaling successful initiatives. DSIT is collaborating with organisations like TechUK to ensure that both buyer and supplier needs are met by the platform’s features and functionalities, promoting an ecosystem conducive to innovation and efficiency.
The announcement of NDX comes days after the House of Commons’ Public Accounts Committee criticised the government for underestimating the scale of the challenge involved in upgrading Whitehall’s digital infrastructure. “The government is talking a big game in digitally evolving Whitehall, but we are concerned that it is not yet fully cognizant of the pace at which it will need to adapt to keep up with the wider digital and AI revolution,” said PAC Chair Sir Geoffrey Clifton-Brown. In its latest report, the PAC added that the government’s new Digital Commercial Centre of Excellence will be staffed by just 24 individuals — a tiny fraction of the 6,000 general commercial personnel operating across Whitehall.
Read more: UK government admits over 25% of its digital systems are outdated
