ICAEW Chart of the Week

After a short interlude while I was in Harare, meeting some of our stakeholders in Zimbabwe here is a delayed Chart of the week from last week.

Here at home, the news has been all about the demise of Carillion, so this chart looks at the proportion of UK public spending going to external suppliers

According to its 2016 accounts, £1.7bn of Carillon's revenue was from the UK Government. Together with its extensive work for local government customers, its total revenue from public bodies can’t be too far off £3bn a year.

Its collapse is a big deal. It will provide a major headache for many government departments and local authorities. It is an even bigger deal for the many suppliers, employees and pensioners who will lose substantial sums of money, as well as the cost to government of cleaning up the mess.

The UK public sector expects to disburse a total of £858bn this financial year. Of this, £314bn (37%) goes to external suppliers of goods and services (including capital procurement of £69bn). Despite the scale of Carillion’s operations, the £3bn it has been receiving each year from the public purse is still less than 1% of the sums going to external suppliers; and only 0.3% of the total. So while this is a crisis, hopefully it should be a manageable one.

Anonymous