Under intense pressure to deliver frontline services amid shrinking budgets and tighter regulatory demands, UK public sector bodies are being asked to do more with less – and to account for every penny. But amid the drive for efficiency and reform, one area remains consistently overlooked: tail spend, or “non-strategic spend” – the hundreds or thousands of low-value transactions that underpin everyday operations.
According to UK regulations, for local authorities, as well as central government departments, NHS trusts, police forces and other public organisations, tail spend purchases are those that fall under a threshold of £214,904.* The results are familiar to many private sector firms: excessive costs, gaps in compliance, significant administrative overhead, and “maverick buying” – purchases made outside of approved processes.
According to the Local Government Association (LGA), councils in England are facing a funding gap of £6.2 billion over the next two years and the LGA forecasts it to grow to £8 billion by 2028-29. “They are being forced to scale back services or find new efficiencies – including in procurement,” an LGA Budget Analysis report shows.
More than ever, local authorities and other public bodies need to bring clarity, control and cost-effectiveness to tail spend and turn it into a strategic asset – all while proving value for money, audit-readiness, and alignment with government priorities such as social value and net zero.
The scale and challenge of tail spend
Often seen as low-priority, non-strategic transactions can account for up to 20% of total spend and sometimes up to 80% of the transactional effort – yet they remain the least governed, least visible, and least efficient area of procurement in public sector finance.
In the context of UK government, tail spend can equate to tens or even hundreds of millions of pounds annually across items such as IT peripherals, office furniture, marketing support, event services, and maintenance supplies. Yet because this spend does not cross formal procurement thresholds, it is often handled outside of standard frameworks, leading to low visibility.
Procurement teams are rarely resourced to handle the volume and variability of tail spend requests. Instead, efforts are focused – as they should be – on strategic, high-value contracts. The unintended consequence is that tail spend often becomes a grey zone of inefficiency and risk.
Without governance and competition, public sector organisations often pay above market rates, repeat similar purchases across different departments, and expend significant internal effort on supplier onboarding, invoice processing, and contract management.
The case for change: Efficiency, savings and compliance
Industry benchmarks consistently show that a strategic approach to tail spend can deliver 5-15% in cost savings, while improving data accuracy, reducing duplication, eliminating maverick buying, consolidating suppliers, increasing purchasing power and boosting operational efficiency – all of which directly contribute to measurable ROI and improved audit performance.
Compliance continues to emerge as a vital issue with the UK government recently announcing plans to penalise large firms that fail to pay small suppliers on time. With complete procurement transparency becoming even more essential, public-sector bodies will need to ensure their supply chains comply – particularly where SME vendors dominate tail spend.
Critically, effective tail spend management also enables public sector organisations to deliver on their social value and ESG objectives – for instance, more easily prioritising local businesses, supplier diversity, or vendors that meet specific environmental or ethical standards. The Social Value Act, reinforced by the Procurement Act 2023, has elevated social and environmental impact to central pillars of public spending, while climate and Net Zero legislation means government buyers must align procurement decisions with legally binding green targets.
What’s holding the public sector back?
Despite the clear case for action, many public sector bodies have been slow to tackle tail spend, which often fails to find its way into the top priorities of procurement leaders – even though its collective value can be enormous. The perception is usually that managing tail spend is complex and costly relative to the value it would deliver. All too often. It sits in an awkward no-man’s land – too small to prioritise, but too large to ignore.
The challenge is compounded by the fact that public sector procurement departments are geared for strategic sourcing, not the dynamic, high-volume reality of tail spend. And onboarding local or specialist SMEs can be a major administrative burden – meaning many authorities stick with the same incumbents, missing opportunities for value and innovation.
The path forward: Exploring the partner option
But councils and other public organisations don’t want to build their own systems or throw people at the problem. Instead, they are increasingly turning to outsourced tail spend partners. These providers consolidate the supply chain, introduce automation, and take on the administrative load – all while maintaining full auditability and policy compliance.
For instance, the North East Procurement Organisation (NEPO) recently partnered with Nomia to launch a Tail Spend Management Services Framework. NEPO’s tail spend initiative, which draws on Nomia’s combination of AI technology and procurement expertise, provides its 12 member authorities, plus associates and other public sector bodies, with a ready-to-go route to manage tail spend efficiently and transparently.
The NEPO framework enables organisations to take control of fragmented spend across a broad spectrum of goods and services – while delivering innovation, compliance, and supplier diversity. In managing tail spend from sourcing and supplier matching to onboarding, contracting and payment, the NEPO framework transforms tail spend purchasing for public sector bodies by streamlining processes, reducing risk, and driving measurable savings.
As public scrutiny intensifies and every council, department and government service faces decreasing options, tackling tail spend offers a rare opportunity to unlock hidden value. Done right, tail spend management turns procurement from an unstructured cost centre into a driver of control, confidence, and public impact.
