Title

Spending Review 2025: A roundtable perspective from Commercial

Section
Insight
Summary

In the wake of the Spending Review 2025, Efficio hosted a roundtable with senior commercial professionals from across government to explore how Departments can turn fiscal and organisational pressures into opportunities to deliver efficiencies. 

This summary captures the key topics discussed, including the fiscal context shaping Departmental priorities, challenges around delivery capability, and the areas for opportunity for commercial functions.
 

1. Navigating fiscal pressures and political change

Following the Spending Review, many Departments are facing structural changes and cuts of up to 30-40% as they adjust to reduced budgets and ministerial priority resets. More broadly, Labour has signalled its intention to create a leaner government while increasing insourcing of key services. Attendees highlighted the tension between these aims and the operational challenge of delivering both simultaneously.
 

2. Strengthening the capability and capacity to deliver

These fiscal and organisational pressures are exposing long-standing capability and capacity gaps across Departments.
Participants noted how Delivery Model Assessments (DMA) are resource-intensive and therefore often not executed to a sufficient level of depth. This reflects a broader challenge across Departments: limited commercial capacity makes it difficult to step back from day-to-day delivery to assess or redesign how services could be provided in the future.

The discussion also highlighted that the maturity of Commercial Finance (CF) remains uneven across Departments. While some have invested in dedicated CF teams, others are still determining whether the function should sit within Finance, Commercial, or operate as a shared resource across government. The maturity of this function directly influences performance: Departments with stronger CF capability consistently achieve better commercial outcomes, reinforcing the importance of sustained investment in this area.

Similar capability gaps were observed in other core commercial disciplines, most notably contract management. A persistent challenge across many Departments is the lack of dedicated commercial contract managers. In many cases, business teams oversee delivery themselves, which can lead to missed opportunities for value capture. Together, these examples reflect a wider need to strengthen contract management discipline to ensure value is retained beyond contract award.

Departments shared how they are tackling the capacity and capability challenges within their commercial functions. Initiatives include using data to inform better prioritisation, raising the visibility of the commercial brand, and collaborating closely within the Department and the Government Commercial Organisation to develop the right capability through recruitment and workforce planning.

Participants also reflected on the need to rethink operating models. Many Departments remain structured by category or business unit, which can make it difficult to view spend and performance across the full user journey. Adopting more holistic approaches – like those used in Health – could unlock greater efficiency and value.
 

3. Unlocking efficiency and innovation

As the discussion turned to the future, several areas of opportunity were raised that could help Departments manage fiscal constraint and strengthen value delivery.

  • Invest-to-save opportunities were widely recognised as essential, though participants acknowledged the challenge of securing funding in the current fiscal climate.
  • Innovation in procurement presents a significant opportunity to drive value. Despite the introduction of new procurement regulations, Departments have yet to embed them widely into practice, although some are exploring new approaches to procure innovative solutions. 
  • Alignment between business and commercial functions was seen as critical to success. Many attendees questioned whether business and commercial leaders are on the same page regarding priorities, with consensus that stronger collaboration will be key to achieving efficiency and resilience in the years ahead.

 

4. Looking ahead: Collaboration and capability at the core

Across government, Departments are responding to fiscal pressures in different ways: some are consolidating and streamlining existing operations, others are undergoing transformation. Yet all face the shared challenge of limited commercial capacity and the need to maximise value from constrained resources.

Embedding commercial finance capability, strengthening contract management, and improving collaboration between business and commercial teams emerged as central to how Departments will adapt to the Spending Review outcomes and deliver on efficiency and innovation objectives.

Efficio supports collaboration across government, creating spaces for commercial leaders to share their experiences and insights. As fiscal pressures persist, continued alignment between business and commercial functions – as well as investment in the capabilities that underpin effective delivery – will be key to driving resilience and lasting value.