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Briefing |

Preparing for the new Procurement Act 2023

Authors and contributors: Socitm, OneAdvanced, Crown Commercial Service (CSS)

Preparing for the new Procurement Act 2023

The UK government’s new Procurement Act 2023 is set to go live on 24 February 2025. The new Act brings significant changes for buyers and suppliers.

In anticipation of the new rules coming into force, Socitm partnered with OneAdvanced to deliver a webinar on 11 December 2024 offering guidance to our members on how to be prepared for the changes. This briefing builds on the webinar to provide additional information and advice to equip organisations with the knowledge and tools they need to comply with the Procurement Act 2023.

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Introduction

Following Royal Assent in October 2023, the provisions of the Procurement Act 2023 were due to go live in late 2024. Slightly delayed, they are now set to come into force on 24 February 2025 and will apply immediately from that date.

The new Act brings significant changes for buyers and suppliers. These changes aim to simplify procurement processes, increase transparency and promote fair competition.

In anticipation of the new rules coming into force, Socitm partnered with OneAdvanced to deliver a webinar on 11 December 2024 offering guidance to our members on how to prepare for the changes.

This briefing builds on the webinar and OneAdvanced’s ‘Navigating Change’ whitepaper to provide additional information and advice to equip organisations with the knowledge and tools they need to comply with the Procurement Act 2023.

OneAdvanced whitepaper: The UK Procurement Act: Navigating Change
OneAdvanced’s ‘Navigating Change’ whitepaper

Key changes and implications

The new Procurement Act was introduced in part due to Brexit. For context, the UK had always adhered to the EU procurement regime. Following Brexit, the UK took the opportunity to review public procurement arrangements to address perceived problems that had become apparent in the application of the EU regulations.

When the new Act comes into force in February 2025, these new rules will concern new procurement only. Anything started under the old regulations, will continue under the old regulations. The new Act also excludes Scotland and covers England, Welsh and Northern Irish devolved administrations only.

The new changes brought by the Procurement Act 2023 and the implications of these changes are detailed in table below:

ChangeImplication
Changes to existing procurement methods will merge four public procurement laws into a single, simplified framework.

New Competitive Flexible Procedure will grant contracting authorities with more autonomy with the ‘competitive flexible procedure’, allowing extensive supplier negotiations, pre-market engagement, and presentations.		The new Act is less prescriptive than the current Act. It is a simpler and more flexible, commercial system that aims to better meet the UK’s needs while remaining compliant with international obligations.

By providing a clearer framework for decision making in procurement process the aim is that it is more accessible, efficient, and beneficial for both councils and suppliers.
Opening up public procurement to new entrants such as small businesses and social enterprises (SMEs) so that they can compete for and win more public contracts.

Relax restrictions on considering factors such as supplier location.		The new Act seeks to bring in new innovators, boost the economy and encourage competition.
Shift away from Most Economically Advantageous Tender (MEAT) to Most Advantageous Tender (MAT) to accommodate non-financial benefits, enabling contracting authorities to give more weight to contracts with social and environmental value where needed and appropriate.The new Act gives the public sector more flexibility to support local businesses and achieve wider community benefits.
Transparency requirements: mandatory publication of various notices such as Pipeline Notice, Planned Procurement Notice, and Contract Award Notice.The new Act aims to prevent unethical practices, ensure cost-efficiency, and make all aspects of the procurement process transparent to the public.
The new Act means that far more information on public authority procurement will be put into the public domain, with authorities required to publish detailed supplier information at all stages of the procurement and contract management process. This data will be publicly available on a government central digital platform and includes the following:

Every public contracting authority spending over £100m annually on procurement will need to publish a pipeline notice with details of contracts over £2m spanning the following 18 months.
 
For all contracts above £5m, at least three KPIs will need to form part of the contract. These KPIs will have to be declared publicly and published annually and at the end of the contract in a notice.
 
Public contracting authorities with smaller contracts will be under no obligation to publish supplier KPIs.
 
Contracting authorities will need to publish a Below-Threshold tender notice prior to openly advertising for a contract. This applies to contracts above £30,000 (incl. VAT) for goods and services, and £214,904 for works contracts. This does not apply to schools and academies, or if the contract is not openly advertised.		Contracts will no longer be kept private, and detailed supplier information will be put under public scrutiny. This should lead to greater levels of accountability, better services, and savings for the taxpayer.

Different departments within contracting authorities will need to collaborate – if highways and planning departments, for example, have contracts for work covering the same area, strategic planning will be needed in order to carry out the works effectively and ensure details are listed.

For suppliers, there is this flip side of transparency that means they get to see the procurements that are coming way in advance of when they have done previously.

However, by publishing KPIs, contracting authorities will be carrying out best practice – the setting of supplier performance goals is likely to lead to an uplift in quality of service, while providing transparency for public stakeholders.

If KPIs are not met, or the supplier does not perform to the satisfaction of the council, the relevant notices will be forwarded to a cabinet office department who will investigate the case with the potential for disbarment. This is of relevance to public contracting authorities planning for digital transition, a cost typically exceeding £5m.

Challenges

The changes brought about by the new Procurement Act will significantly affect public sector buyers. The new Act comes into effect at a time when public bodies are expected to operate with reduced budgets and fewer staff. This is compounded by a general shortage of skills, particularly as new and emerging digital technologies continue to develop, and people leave the sector.

In OneAdvanced’s ‘Navigating Change’ whitepaper they note that the biggest challenge for public sector organisations is that, while the advantages of the new Act are evident, implementing the appropriate processes for its delivery will be difficult.

For example, while from the outset publishing of contract and supplier details may not appear overly complicated, data will need to be accessible, accurate and easy to manage. Councils or other public bodies may not have the right skills or capabilities to do this, nor generally have the capacity to keep up with the demands of the Act in this way.

The new Act will also require a cultural shift, and procurement managers will need to be at the forefront of decision making and given the scope and authority to perform their jobs effectively.

Practical preparation steps and tips for organisations

The Government Commercial Function have launched the Transforming Public Procurement programme (TPPP) which is the UK government’s main source of information about the new procurement regime. The TPPP provides guidance and learning resources for both contracting authorities and suppliers. These include:

  • Transforming Public Procurement Knowledge Drops designed to provide a high-level overview of the changes to the procurement regulations aimed at those who have regular interactions with procurement, as well as suppliers including SMEs (Small and Medium-sized Enterprises) and VCSEs (Voluntary, Community and Social Enterprises).
  • E-learning modules to support practitioners in implementing the new regime.

As well as following TPPP guidance, OneAdvanced and Socitm propose several practical steps that public sector organisations can take to prepare for the new Procurement Act 2023:

  • Prioritise procurement at the top level: treat procurement as a strategic function alongside allocating a percentage of your organisation’s budget to innovation.
  • Create a dedicated procurement team or champion to foster new ideas and innovation.
  • Internal training: ensure staff are trained on the new procedures and transparency requirements.
  • Update policies and documents: revise procurement policies, contract templates, and standing orders to align with the new Act.
  • Technology and systems: implement or update procurement software (to a cloud-based model) to comply with new reporting and transparency requirements.
  • Engage with suppliers: develop strategies for effective pre-market engagement and maintaining good supplier relationships.
  • Compliance and monitoring: set up internal controls to ensure ongoing compliance with the Act.
  • Work collaboratively and share case studies of success stories and lessons learned from organisations already preparing.

How can Socitm help?

Webinars

Socitm is partnering with the Crown Commercial Service (CCS) to offer three online roundtables on social value in procurement. See more information below on dates, times and how to sign up.

Illustration of people interacting during a webinar on various handheld devices

Maximising Social Value for the Public Sector (Supplier Perspective)

22 January, 09:30 – 10:30

This session will focus on the supplier perspective, providing a platform to explore:

  • Navigating the complexities of procurement processes
  • Addressing challenges around understanding and meeting social value expectations
  • Reducing barriers caused by perceptions of onerous procedures

Increasing Social Value in Procurement Practice (Local Authority Perspective)

29 January, 09:30 – 10:30

This session is designed for local authority officers and will address:

  • The evolving landscape of procurement under the Procurement Act 2023 (PA23)
  • Overcoming challenges in embedding meaningful social value requirements
  • Streamlining procurement practices to deliver better outcomes

Social Value Procurement Solutions and Shared Experiences

5 February, 09:30 – 10:30

This session will bring together suppliers and local authorities to:

  • Share key takeaways and insights from the first two roundtables
  • Explore emerging best practices in delivering social value
  • Co-create solutions to address procurement challenges and foster greater alignment

Coming soon: Procurement and social value workstream

The Socitm Institute is launching a new workstream, ‘Procurement and social value’ to bring together resources and best practise for our members to support you in navigating the new Procurement Act 2023. More information including launch date is TBC.

Conclusion

Socitm has produced this briefing, drawing from guidance published by the Government Commercial Function and OneAdvanced, to give readers an introduction to the new Procurement Act 2023 which is due to go live on 24 February 2025. Key changes include:

  • New Competitive Flexible Procedure and changes to existing procurement methods.
  • Allowing small businesses and social enterprises (SMEs) to compete for more public contracts.
  • Transition from Most Economically Advantageous Tender (MEAT) to Most Advantageous Tender (MAT) to include social and environmental benefits.
  • Transparency requirements: mandatory publication of various notices such as Pipeline Notice, Planned Procurement Notice, and Contract Award Notice.

In summary, organisations should focus on several key areas to ensure compliance and optimise their procurement processes:

  • Appoint a procurement champion or team
  • Consider procurement at the top strategic level
  • Understand the legal framework
  • Update internal processes and procedures, set up guidelines
  • Invest in training and development of teams
  • Leverage digital tools to support governance and streamline processes
  • Engage with internal and external stakeholders
  • Focus on value for money and public benefit
  • Prepare for increased transparency requirements – KPIs
  • Plan for transition from old to new regulations
Call for case studies
If you would like to share any thoughts or feedback, or any case studies of your own that you would be happy for us to use to inform our procurement and social value workstream, please get in touch with us at hello@socitm.net.