Feryl Clark sees the new digital marketplace as an opportunity for small businesses.
New Digital Exchange to shake up public sector procurement, boosting opportunities for IT and AI specialists
The UK government has ambitious plans for a National Digital Exchange. The government sees it as a one-stop shop or recommended app store for public sector technology procurement.
Public sector workers will be able to rate and review tech products, helping hospitals, schools and government departments avoid costly mistakes and make smarter, faster decisions on which tech to buy.
Why should freelancers take notice?
The public sector invests £26 billion a year on tech. The government claims the new exchange will save taxpayers £1.2 billion annually and change how digital tools are bought. This overhaul, underpinned by the Procurement Act 2023, could signal potential new business for freelance IT, cybersecurity, and AI specialists across the country.
Announced earlier this month, the initiative aims to slash procurement times from months to mere hours, making it faster, fairer, and more focused on delivering digital services to the public.. A key objective is to boost small business involvement in government contracts by 40% within three years.
A level playing field for SMEs and freelancers?
Government contracts have long been perceived as the exclusive domain of large, established corporations, with smaller businesses struggling to get a foot in the complex tender processes. The National Digital Exchange (NDX) is seemingly designed to dismantle these barriers.
“We’ve all heard the stories – months of red tape, tech that doesn’t deliver, and money wasted. That’s not good enough for the people we serve,” stated Minister for AI and Digital Government, Feryal Clark. “The National Digital Exchange aims to change that,” said Clark. “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.”
This “app store” model will feature an AI-powered engine to match public sector buyers with suitable suppliers, potentially giving specialist freelancers and small consultancies unprecedented visibility for their niche skills.
The Procurement Act 2023, which officially came into force on 24 February 2025, also encourages smaller contract lots and simplified bidding processes, making it more feasible for individual contractors and micro-businesses to secure government work.
Surging demand for AI, cyber and digital expertise
The government’s internal skills gap is likely to see increased demand for external expertise. Freelancers specialising in areas including artificial intelligence, cybersecurity measures and modernising legacy IT systems are particularly well-positioned.
Reports have highlighted challenges within government departments to act as “intelligent customers” for digital services and a lack of digital commercial skills. This creates an opportunity for experienced contractors to fill the void, helping public sector bodies leverage cutting-edge technologies to improve services and efficiency.
Top-tier cybersecurity talent could also be hired to protect critical national infrastructure and sensitive data through procurement roles or as suppliers. The government is also exploring new ways of funding AI and tech projects with a “start-up mindset,” further indicating a demand for tech solutions often provided by agile, self-employed specialists.
Job opportunities and challenges for the self-employed
The shift towards a more agile and transparent procurement system presents several advantages for freelancers:
- The NDX should simplify engagement, moving away from complex agreements that often favour larger firms, as detailed in the GOV.UK guide for suppliers
- The AI-powered matching system could make it easier for public sector bodies to find the exact skills they need for specific projects
- Reduced red tape means quicker turnaround times from identifying a need to awarding a contract, allowing freelancers to secure work more frequently
- The ability for public sector users to rate and review suppliers could help build a strong reputation for successful contractors
That said, freelancers and small business owners will need to familiarise themselves with the exchange’s digital tools and processes to effectively bid for and manage contracts. The Digital Marketplace will also be adding new features that you will need to keep on top of.
While the outlook appears positive, freelancers and the self-employed should be mindful of potential hurdles. Despite no further changes currently planned, IR35 regulations remain a crucial consideration for limited company contractors engaging with the public sector.
