Introducing the Livingstone Verified BoM: a free-of-charge licence inquiry for UK public sector organisations preparing to renew their Microsoft agreement.
By Gareth Redshaw, Executive Director, Optimisation and Strategy, Livingstone & Michelle Costello, Senior Advisory Consultant| September 2026
For most UK public sector organisations, the Strategic Partnership Arrangement 2024 (SPA24) is the starting point for any Microsoft renewal. Negotiated by Crown Commercial Service (which became the Government Commercial Agency on 1 April 2026) and in effect since 1 November 2024, it gives eligible bodies access to enhanced value across Microsoft 365, Azure, Business Applications and, for the first time, Copilot, regardless of the procurement route they use. Its reach is significant: the government reported that approximately £1.9bn was spent on Microsoft software licences through SPA24 via resellers in the 2024/25 financial year.
But a negotiated framework is not a price freeze. Over the past twelve months, several changes have pushed up the cost of a like-for-like renewal, and some of Microsoft's newest products sit outside the terms negotiated in 2024. If your renewal Bill of Materials (BoM) was built on last year's assumptions, it may no longer be the deal you think it is.
Three pressures converging on your renewal
1. List prices have risen
On 1 July 2026, Microsoft's global price and packaging update for Microsoft 365 commercial suites and standalone components took effect. Existing customers remain on their current pricing until renewal, which means the increase lands at exactly the moment you sign your next agreement. At US dollar list price, the changes include the following:
| Product (per user per month) | Before 1 July 2026 | From 1 July 2026 | Increase |
|---|---|---|---|
| Office 365 E3 | $23.00 | $26.00 | 13% |
| Microsoft 365 E3 | $36.00 | $39.00 | 8% |
| Microsoft 365 E5 | $57.00 | $60.00 | 5% |
| Microsoft 365 F3 | $8.00 | $10.00 | 25% |
| Microsoft 365 F1 | $2.25 | $3.00 | 33% |
| Enterprise Mobility + Security E3 | $10.60 | $12.00 | 13% |
Source: Microsoft Licensing, Microsoft 365 Pricing and Packaging Updates. US dollar list prices; Microsoft notes that pricing may vary by country and currency.
SPA24 discounts are applied to the Microsoft price list in force when your renewal is priced. A higher list price therefore flows straight through to a higher net price, even when the discount percentage on the quote looks unchanged. Organisations with large frontline workforces, such as NHS trusts and local authorities, should pay particular attention to the F-suite increases.
2. Automatic volume discounts have gone
From 1 November 2025, Microsoft flattened the Level A to D price levels for all Online Services purchased through Enterprise Agreements and the Microsoft Products and Services Agreement. Every customer now starts from the same list price published on Microsoft.com, with the change taking effect at the next agreement renewal or upon the first purchase of a new Online Service. The only carve-outs Microsoft listed were the U.S. Government and worldwide Education price lists, so UK public sector bodies outside education should assume they are in scope. Industry estimates put the uplift for former Level B, C and D customers at around 6%, 9% and 12% respectively on affected line items, and it compounds with the July list price rises on the same products.
3. New and enhanced products are arriving outside the negotiated terms
Microsoft attributes the July increases to the value being added to the suites. Defender for Office 365 Plan 1 is being added to Office 365 E3 and Microsoft 365 E3; Intune Plan 2, Remote Help, and Advanced Analytics are being added to Microsoft 365 E3; and Security Copilot is being added to Microsoft 365 E5. Alongside these enhancements, entirely new products have launched. Microsoft 365 E7, the "Frontier Suite" that brings together Microsoft 365 E5, Microsoft 365 Copilot, the Entra Suite and Agent 365, became generally available on 1 May 2026 at $99 per user per month, with Agent 365 also available on its own at $15 per user.
This is where risk creeps in. SPA24 was negotiated in 2024, before these products existed. Where a product has not been negotiated into the framework, it may not carry the discount public sector buyers have come to expect, and it rarely arrives labelled as a risk. More often it appears as a replacement for a retired SKU, as an upgrade path, or as a bundle that looks like good value against list price. In recent public sector renewals we have seen legacy SKUs swapped for successors because the original was no longer eligible for SPA pricing, retired products moved onto new capacity-based licences, and new SKUs appear on a BoM without agreement pricing. Each one can quietly change the value of a renewal.
Enhanced suites bring a second risk: duplication. If your BoM still carries standalone licences for capabilities that are now included in your suite, you may be paying twice for the same thing.
Why verification matters now
Public sector budgets are set well in advance, and every renewal is subject to value-for-money scrutiny. The Government Commercial Agency reviews Microsoft's performance against the SPA24 Memorandum of Understanding quarterly, including its pricing commitments, but that oversight operates at framework level. It does not check whether the individual BoM on your desk reflects the right SKUs, the right price list and the right discounts. Renewal proposals are typically issued for guidance, with responsibility for validating pricing, discounts and product eligibility resting with the reseller before a quote is issued. That leaves a gap between the framework and the contract you sign, and it is exactly the gap the Livingstone Verified BoM is designed to close.
Introducing the Livingstone Verified BoM
The Livingstone Verified BoM is a free-of-charge licence inquiry with one of our Commercial Licensing experts. It is designed for UK public sector organisations with a Microsoft renewal on the horizon, and its purpose is simple: to give you expert confidence that the renewal you are about to sign is right.
How it works
- Book a session with a Livingstone Commercial Licensing expert. There is no charge and no obligation.
- Share the Bill of Materials planned for renewal, whether it came from your reseller, from Microsoft or was built by your own team.
- Your consultant assesses the BoM live in the session, line by line, so you can see the reasoning as it happens.
- We share any areas of concern or improvement on the call, with a clear explanation of each.
- Where the BoM stands up to scrutiny, it receives Livingstone Verified status. Where it does not, you leave with a short list of what needs to change before it can be verified.
What we look at
- Whether each line is eligible for SPA24 pricing and carries the discount it should.
- Which Microsoft price list the quote is based on, and whether the July 2026 changes have been reflected correctly.
- Products that sit outside the negotiated terms, including new SKUs, replacement SKUs and bundles such as Microsoft 365 E7.
- Overlap between standalone licences and capabilities now included in enhanced suites.
- Quantities against your current user base, plus any retired or legacy SKUs and extended security update requirements.
- Suite choices, such as Teams and no-Teams editions, and whether they reflect how your organisation actually works.
- Timing factors, such as upcoming programme or pricing changes, that could affect your position before you sign.
What happens next
The focus of the session is to verify your renewal, not to sell you a project. If the review uncovers opportunities for a deeper dive and further cost savings, we will tell you, and we can discuss them separately if you would like to. Whether you take that further is entirely your choice.
Book your free licence inquiry
The earlier you verify, the more options you have. Crown Commercial Service has previously advised public sector bodies to engage six to nine months before their Microsoft renewal date. Even so, a Livingstone Verified BoM is valuable at any stage, including when a quote is already on the table and the deadline is close.
To book, speak to your Livingstone account manager or get in touch here. Bring your renewal BoM, and leave knowing whether it is right.
Sources
- Government Commercial Agency, "Crown Commercial Service announces a new Memorandum of Understanding with Microsoft UK, replacing the Digital Transformation Arrangement 21 (DTA21)", 21 October 2024. https://www.gca.gov.uk/news/crown-commercial-service-signs-memorandum-understanding-microsoft-uk-spa24
- PublicTechnology, "Public sector spends £2bn on Microsoft licences in first five months of discount MoU", 18 July 2025. https://www.publictechnology.net/2025/07/18/business-and-industry/public-sector-spends-2bn-on-microsoft-licences-in-first-five-months-of-discount-mou/
- Hansard written answer, "Crown Commercial Service: Microsoft", 23 April 2026. https://www.theyworkforyou.com/wrans/?id=2026-04-13.126600.h
- Microsoft Licensing, "Microsoft 365 Pricing and Packaging Updates". https://www.microsoft.com/en-us/licensing/news/2026-M365-Packaging-Pricing-Updates
- Microsoft Licensing, "Microsoft Online Services: Pricing Consistency Update", 12 August 2025. https://www.microsoft.com/en-us/licensing/news/online-services-pricing-consistency-update
- ENow Software, "Microsoft EA Pricing Changes 2025: Removal of Volume Licensing Discounts for Online Services". https://www.enowsoftware.com/solutions-engine/m365-license-optimization-center/microsoft-ea-pricing-changes-2025-removal-of-volume-licensing-discounts-for-online-services
- Microsoft, "Introducing the First Frontier Suite built on Intelligence + Trust", 9 March 2026. https://blogs.microsoft.com/blog/2026/03/09/introducing-the-first-frontier-suite-built-on-intelligence-trust/
- Crown Commercial Service, "A route to market for your Microsoft requirements" (fact sheet). https://assets.crowncommercial.gov.uk/wp-content/uploads/RM6068-Microsoft-route-to-market-guidance-3.pdf
Prices quoted are Microsoft US dollar list prices per user per month as published by Microsoft; UK pricing, SPA24 discounts and reseller terms will vary. Livingstone Verified status reflects Livingstone's assessment of the BoM shared at the time of review.
