Procurement Act 2023: what you need to know

We take a look at what the delayed Act will mean for procurement.

There have been big developments in the world of procurement this year, namely the delay of the Procurement Act 2023.

The guidance was meant to be implemented in October this year, but has instead been pushed back by four months to 24 February 2025. It applies only to England, Wales and Northern Ireland.   

The announcement came from Georgia Gould, parliamentary secretary for the Cabinet Office, to Parliament where she noted that the previous government’s National Procurement Policy Statement (NPPS) was not fit for purpose and needed to be replaced with a new NPPS that is properly aligned to the new government’s priorities.

The delay also follows recent and increasing concerns among observers that the new central digital platform, which contracting authorities will have to use for various parts of the procurement process, was not on schedule to be up and running by the 28 October commencement date.

Existing legislation will apply until the new regime goes live, and will also continue to apply to procurements started under the old rules.

The new government has said that it is important the new regime commences with a statutory NPPS aligned to the government’s strategic priorities – creating a mission-led procurement regime which builds on the transformative powers within the Act, and which meets the challenge of applying the full potential of public procurement to deliver value for money, economic growth and social value.

Georgia Gould said: “The Procurement Act 2023 aims to create a simpler and more transparent regime for public sector procurement that will deliver better value for money, and reduce costs for business and the public sector.

“This government will use this legal framework to deliver greater value for money and improved social value, which will help raise standards, drive economic growth and open up public procurement to new entrants such as small businesses and social enterprises.

“Under the Act, the previous administration published a National Procurement Policy Statement to which contracting authorities will have to have regard.”

She said the NPPS does not meet the challenge of “applying the full potential of public procurement to deliver value for money, economic growth, and social value.”

Gould added: “It is crucial that the new regime in the Procurement Act goes live with a bold and ambitious Statement that drives delivery of the government’s missions, and therefore, I am proposing a short delay to the commencement of the Act to February 2025 so this work can be completed.

“I am confident that the extra time to prepare will allow for a more seamless transition, ensuring a smoother and more effective implementation process for both contracting authorities and suppliers.”

Procurement rules for the public sector have changed drastically in the last few years. After Brexit and a change in government, there have been some major changes prompting the government to take more time to roll out the Act.

The new Act will be released with the hope of being more flexible and light touch for suppliers.

Supplier KPIs

The Cabinet Office updated their list of Key Performance Indicators for the government’s most important contracts. It shows up to four relevant KPIs for those contracts, and the performance of the vendor against those KPIs. You can read the full list here.

SMEs

In July this year, there was also a boost from Crown Commercial Service (CCS), the UK’s biggest procurement organisation, to support small and medium sized businesses (SMEs).

In their annual report, the organisation found that about £3.52 billion of central government spend went directly to 1,525 small and medium-sized businesses (SMEs) over the last year.

Chair of the CCS Board, Peter George said: “I’m delighted that 2023/24 has seen continued success for CCS in achieving even more commercial benefits for our customers. Our core purpose is putting customers first and we will continue to do this by strengthening our value offering over the next few years.”

They added that CCS has helped customers with procurements worth a total annual contract value of over £2.7 billion, and £30.3 billion of direct spend was channeled through their commercial agreements.

CEO of CCS, Simon Tse said: “2023/24 has seen a focus for CCS on how best we can offer excellent value for our customers. Almost £5 billion in commercial benefits is a significant increase from last year and one that I am proud to announce.

“It isn’t just about saving our customers time and money. It’s about securing a better future for us all. Improving health care, public services, transport, local communities, the environment and so much more.”