As of February 2025, 30 councils have been granted Exceptional Financial Support, receiving in-principle capitalisation relief to stabilise their finances ahead of budget-setting–totalling over £1.3 billion.

The final settlement, published on 3rd February 2025, confirmed over £69 billion in government funding for councils, representing a 6.8% cash-terms increase in Core Spending Power (CSP). Despite these increases, long-term trends highlight persistent challenges.

Now that the government has intervened and offered additional funding, buyers will be focused on improving their public services, starting with reviewing contracts and suppliers they work with and improving the quality and cost efficiency for their locality.

Included in this report:

This report unlocks key insights for suppliers, helping you navigate funding flows, buyer priorities, and procurement opportunities in 2025.‍

• Where the money is going in 2025-26 – Insights into the 30 councils receiving £1.3 billion in Exceptional Financial Support.

• £103 million in awards for IT services and software under scrutiny - Breaking down the £6.9 billion in awarded contracts and where technology capitalised.

• High-value opportunities for suppliers in 2025-26 – Key procurement trends, upcoming opportunities for IT and software suppliers in the next financial year.

With new funding in play for suppliers to local councils, there’s a window of opportunity to engage with buyers and position your business for success. Sign up for a free account.

In December 2024, it was announced that £69 billion will be allocated to council budgets across England to support the government's Plan for Change, funding investment, reforms, and strengthening the foundations of local government.

Although no councils declared bankruptcy in 2024, several faced significant challenges in previous years, including:

• Slough Borough Council (July 2021) ‍
• Croydon Council (November 2022)‍
• Thurrock Council (December 2022)‍
• Woking Borough Council (June 2023)‍
• Birmingham City Council (September 2023)‍
• Nottingham City Council (November 2023)

Additional drivers of challenges include botched digital transformations, mismanaged investments, and severe strains on special educational needs and disabilities (SEND) and social care, waste management, and libraries.

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The councils banking on financial assistance

The table below highlights the 30 councils that have received access to an additional £1.3 billion in Exceptional Financial Support for 2025-26, which includes the 6 councils mentioned above.

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In 2024, the aforementioned 30 councils awarded £6.9 billion in public sector contracts, with 219 contracts worth £103 million going to IT services and software companies.

This section breaks down the key buyers and suppliers linked with these IT services and software contracts, helping suppliers understand spending trends in the evolving public sector procurement landscape.

The top 20 contract titles amount to £69.8 million reveal strong council investment in cloud, enterprise software, and digital transformation.

• The London Borough of Enfield led contract awards in 2024 with 31 given to IT services and software suppliers. On the supplier side, for this category, Civica won the most deals with 16, trailed by Phoenix Software with 8, The Access Group with 7, and IDOX Software with 6.

• High-value deals went to Birmingham City Council at £18.3 million, Cumberland at £14.3 million, and Enfield at £14.2 million. For suppliers, Oracle led the way with a total value won at around £17.2 million

Despite significant financial strain on local councils, the demand for essential public services remains high, with councils keen to take the support and make amends for the new financial year.

This means that suppliers will have opportunities to capitalise on across the board. We published a guide for suppliers adapting to changes with the Procurement Act , there are more routes to market, transparency notices and data points for suppliers to use.

With councils investing heavily in cloud-based infrastructure and cybersecurity, 2025-26 presents a prime opportunity for suppliers in cloud storage, digital platforms, and cyber resilience.

Based on our analysis of award notices and expiring contracts, councils are modernising legacy IT systems, enhancing data security, and integrating AI-driven automation. Therefore, suppliers with secure cloud hosting, network security, and compliance-driven solutions are well-positioned to win.

Click on the contracts to learn more about some upcoming expiries for software packages and information.

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IT services remain a key area of investment for 2025-26. From large-scale system integrations to network upgrades and managed IT support, there is a key opening for suppliers to support local authorities in modernising their infrastructure.

As councils navigate financial constraints while aiming for efficiency and compliance, they are seeking suppliers that can enhance service delivery, strengthen data security, and provide cost-effective solutions.

Click on the contracts to learn more about some upcoming expiries for IT services.

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With an additional £1.3 billion in Exceptional Financial Support being made available and £6.9 billion in contracts awarded in 2024, local councils are actively working to implement cost-effective, innovative solutions in IT services, cloud infrastructure, and digital transformation.

By tracking procurement signals in real time, suppliers can move ahead of competitors, build stronger relationships with decision-makers, and secure a place in key local government projects.

Stay ahead of market shifts and track live procurement opportunities with a free Stotles account.

• Discover expiring contracts and pre-engage with buyers before renewals are secured by incumbents and go live.
• Access key buyer and suppliers insights to position your business for success in the evolving public sector landscape.
• Receive daily alerts right to your inbox with upcoming contract expiries and new tenders for your team to go after.

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