The New Procurement Act 2023
The New Procurement Act 2023:
A Transformative Shift in Public Procurement
Marketing & Frameworks Director
The landscape of public procurement in the UK is set to undergo a significant transformation with the introduction of the new Procurement Act, which will come into force on 24 February 2025. This landmark legislation represents the most substantial overhaul of procurement laws in over three decades, aiming to create a more efficient, transparent, and inclusive procurement system. However, after attending a number of procurement events in 2024, most recently at ProcureX in Wales, the consensus is that, whilst the new regulations will provide greater transparency and flexibility, not that much will change in the day-to-day.
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Implementation and Transition ⏬
Background and Objectives
The new Procurement Act consolidates various existing public procurement rules into a single, cohesive regime. Historically, the UK’s procurement framework has been heavily influenced by European Union regulations. However, with the UK’s departure from the EU, there is an opportunity to tailor procurement laws to better meet national priorities and objectives. The Act seeks to address several key issues, including the barriers faced by smaller businesses in accessing public contracts, the need for greater transparency, and the desire for a more flexible procurement process.
Key Changes and Benefits
One of the primary goals of the new Procurement Act is to simplify and streamline the procurement process. The Act introduces a more flexible approach to procurement, allowing contracting authorities to tailor their processes to better suit the specific needs of their projects. This flexibility is expected to lead to more innovative solutions and better value for money for taxpayers.
The Act also places a strong emphasis on transparency. By embedding transparency throughout the commercial lifecycle, the new regime aims to ensure that the spending of taxpayers’ money can be properly scrutinised. This includes requirements for greater disclosure of procurement decisions and the rationale behind them, as well as more robust mechanisms for challenging procurement outcomes.
Another significant change is the focus on opening up public procurement to new entrants, such as small businesses and social enterprises. The Act includes provisions designed to reduce the barriers that these organisations face when competing for public contracts. This is expected to increase competition and drive better outcomes for public sector projects.
The new Act will also introduce some changes regarding the assessment of tenders. The term “most economically advantageous tender” (MEAT) has been replaced with “most advantageous tender” (MAT). This change emphasizes that tenders do not have to be awarded based on the lowest price alone. Instead, contracting authorities can consider a wider range of factors, including quality, environmental and social factors, life cycle costs, and innovation. The Act allows contracting authorities to refine the award criteria in a competitive flexible procedure, which was not directly addressed in previous legislation
Additionally, while contracting authorities are not required to ask suppliers to explain abnormally low prices, they must investigate and provide suppliers with an opportunity to demonstrate their ability to perform the contract at the proposed price before disregarding a tender on that basis.
National Variations
Scotland
The Act’s provisions extend to Scotland, but its application is limited, resulting in dual regulation of public procurements in Scotland.
The Procurement Act 2023 will not apply to devolved Scottish authorities, which will continue to be governed by the Scottish Procurement Regulations. These regulations include the Public Contracts (Scotland) Regulations 2015, the Utilities Contracts (Scotland) Regulations 2016, and the Concession Contracts (Scotland) Regulations 2016
In practice, this means that the Scottish Government, its agencies, local authorities, Scottish public authorities (including those with mixed devolved and reserved functions but no cross-border functions), universities, colleges, and registered social landlords will continue to be regulated by the Scottish Procurement Regulations. However, UK Government bodies, UK-wide public bodies with cross-border functions, and Scottish public authorities with reserved functions only will be subject to the Procurement Act 2023 for procurements in Scotland.
Wales
There are specific Welsh considerations with the new Procurement Act 2023. The Welsh Government has issued guidance documents that outline the differences and specific requirements for procurement in Wales.
The new Act, along with the Procurement (Wales) Regulations 2024, regulates how Devolved Welsh Authorities (DWAs) procure contracts. Some key differences for Wales include:
- Publication Requirements: DWAs are not required to publish public contracts or modified contracts valued over £5 million, except where a DWA awards a contract under a reserved (non-devolved) procurement arrangement, such as a framework awarded by Crown Commercial Services (CCS).
- Policy Statements: DWAs must have regard to the Wales Procurement Policy Statement (WPPS) rather than the National Procurement Policy Statement (NPPS). In cases of cross-border collaboration, the applicable policy statement depends on the lead authority or centralised procurement authority.
- Contract Award Notices: DWAs are not required to publish the names of unsuccessful suppliers in Contract Award Notices for contracts valued above £5 million, unless the contract was awarded under a reserved (non-devolved) procurement arrangement
These considerations ensure that procurement processes in Wales align with local policies and regulations, promoting transparency and efficiency while accommodating specific regional needs.
Northern Ireland
Finally, there are specific considerations for Northern Ireland within the new Procurement Act 2023. The Act includes exemptions and differences tailored to Northern Ireland’s procurement processes. For instance, the requirement to publish pipeline notices does not apply to a transferred Northern Ireland authority.
Additionally, the requirement to publish a copy of the contract along with the contract details notice does not apply to contracts awarded by a transferred Northern Ireland authority unless it is under a reserved procurement arrangement.
Similarly, the requirement to publish details of contract payments over £30,000 does not apply to public contracts awarded by a transferred Northern Ireland authority unless it is under a reserved procurement arrangement.
These considerations ensure that procurement processes in Northern Ireland align with local policies and regulations, promoting transparency and efficiency while accommodating specific regional needs.
Implementation and Transition
The implementation of the new Procurement Act has been carefully planned to ensure a smooth transition from the existing regime. The Act received Royal Assent in October 2023, and the accompanying Procurement Regulations 2024 have been debated and approved in both Houses of Parliament.
The new regime was initially scheduled to go live on 28 October 2024, but a short delay was announced to allow for the development of a new National Procurement Policy Statement (NPPS) aligned with the government’s strategic priorities.
The NPPS will play a crucial role in guiding the implementation of the new regime, setting out the government’s mission-led procurement strategy. This strategy aims to leverage the full potential of public procurement to deliver value for money, economic growth, and social value.
Frameworks
Frameworks will continue largely as before, but there will be some innovations to increase the flexibility of framework options. The Act refers to ‘frameworks’ rather than ‘framework agreements’, as in the previous legislation, but otherwise they are generally similar.
It also includes open frameworks, which did not previously exist, and which are more flexible than framework agreements under the previous legislation. Open frameworks provide an opportunity for new suppliers to join the framework at least twice during its term, which was not possible under the previous regulations. These changes aim to increase the flexibility and inclusivity of frameworks, making it easier for new suppliers to participate and for contracting authorities to manage their procurement processes more efficiently.
The Act will require contracting authorities to publish a contract award notice following the award of a call-off contract, which was not required under the previous legislation.
Looking Ahead
As the new Procurement Act comes into force, it is essential for both contracting authorities and suppliers to familiarise themselves with the changes and prepare for the new regime. The government has published extensive guidance and resources to support this transition, including factsheets, videos, and training programmes – see links below.
I see the introduction of the new Procurement Act as marking a significant milestone in the evolution of public procurement in the UK. By creating a simpler, more flexible, and transparent system, the Act aims to deliver better outcomes for public sector projects and ensure that taxpayers’ money is spent effectively and efficiently.
Procuring Leisure Developments
If you are looking at procurement routes for your next leisure development then it would be remiss of me not to highlight the UK Leisure Framework (UKLF). As the appointed development partner to the UKLF, Alliance Leisure have delivered more than 100 projects through the Framework, ranging from new build £30m+ projects and large refurbishments, through to minor remodelling works and outdoor pitches. The UKLF is available until 2028 and enables Alliance Leisure to be appointed directly for the scoping, design, refurbishment, construction and development of leisure centres, theatres, play facilities, recreation facilities and sports facilities across the UK public sector.
Resources
LGA Procurement Hub https://www.local.gov.uk/our-support/procurement-hub/transforming-public-procurement
Full Details from legislation.gov.uk https://www.legislation.gov.uk/ukpga/2023/54/contents
Government Guidance Documents https://www.gov.uk/government/collections/procurement-act-2023-guidance-documents
Procurement (Wales) Regulations 2024 Explainer https://senedd.wales/media/023ei5ko/sub-ld16524-em-e.pdf
