AWS cloud contract could cost Home Office over £1 billion

The Home Office could spend more than £1 billion on a new cloud services contract with Amazon Web Services (AWS), documents show.

The contract is due to start on 1 December 2027 and run to 1 December 2029, with a possible two-year extension taking the contract to 2031.

A pipeline document published on 30 October shows that, including VAT, the renewed contract will set the Home Office back £1,057,945,209. This amounts to more than £260 million in spending each year when taking into account a potential two year extension.

It also marks a significant price hike compared to a previous contract. In 2023, the Home Office signed a landmark deal with AWS for public cloud hosting services that was valued at around £450 million.

This contract is set to expire on 30 November 2026.

The notice for the contract renewal states the extension will “support the Home Office’s current and future cloud hosting requirements”.

A description of services in the 2023 and proposed contracts show slight differences, however. While the 2023 deal points solely to public cloud hosting services, the proposed contract also includes cloud backups, suggesting an expansion of services.

ITPro approached the Home Office for comment, but did not receive a response by time of publication. AWS directed ITPro to the Home Office for details.

Growing public sector cloud spend

The contract extension marks the latest in a string of big-money cloud contracts for the UK’s public sector. Figures from Bidskim show cloud spending exceeds £1.64 billion, spanning 249 contracts across 137 public bodies.

AWS, in particular, accounts for a significant portion of spending on this front at £1.22 billion compared to £355 million for Microsoft Azure. Combined, Google Cloud and Oracle account for 4% of cloud spending.

According to Bidskim, contracts with the Home Office and HMRC are worth £800 million combined. Both of these contracts were three year deals secured in 2023.

AWS-related contracts have been subject to scrutiny in recent years. As ITPro reported in late 2024, Lord Clement-Jones of the Liberal Democrats questioned rising costs associated with the aforementioned Home Office deal with AWS.

Clement-Jones claimed the Home Office was being “held to ransom” and raised concerns around cloud concentration, with just two or three companies accounting for a significant portion of contracts.

Home Office courts market engagement

The Home Office is courting market engagement on the upcoming contract proposal, with a deadline set for 8 December. This includes a TechUK-led “virtual market engagement” event for suppliers registered on G-cloud 15.

A formal tender notice is expected to be published on 4 January 2027.

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