UPDATE 12.09.24 

The government has today announced a brief delay to the launch of the Procurement Act in order to ensure a seamless a transition as possible and it will  now come into effect on the 24th February 2025. If you would like to understand more about the delay – you can find the government announcement here.  

The Procurement Act 2023 is a new law that was due to come into effect on October 28th 2024, but has now been delayed until February 2025.  It is set to bring about significant reform and changes to the rules and processes that govern UK procurement and how the public sector spends money.

In simple terms, it is aimed at creating a more open and transparent public procurement process.

Alex Moore, Product Director at Equity Energies discusses what the changes mean, as well as  the opportunities afforded to local government and councils to innovate, transform how they buy services and deliver better value for money whilst improving outcomes for their local communities.

What is happening and why?

The Procurement Act 2023 is a new approach to the current EU-based Public Contract Regulations 2015 which have remained in place since the UK’s exit from the EU. The outdated system is being improved to introduce a more efficient, effective and streamlined set of governance, processes and systems for public contracting authorities and suppliers in England, Wales and Northern Ireland.

Each year the public sector spends around £300bn on public procurement across key facets of daily life such as transportation, planning, social housing, healthcare and infrastructure maintenance, among others.

This improved set of regulations are designed to make sure that any money spent goes further towards benefiting the UK’s communities and public services.

All public procurement regimes will be consolidated into one piece of legislation which will help realise better value for money, identify cost savings and efficiencies, and be more transparent to the public about how much is being spent. In short, the Act will:

  • Simplify the public procurement lifecycle.
  • Increase transparency on how money is being spent, and with whom.
  • Open the process up to new entrants to compete for more public contracts – supporting competition and fostering innovation.
  • Strengthen the ability to hold suppliers accountable for service standards.

What are the benefits of the Procurement Act 2023 to local authorities and the public sector?

These new rules will create opportunities for local government and councils to innovate, transform how they buy services and deliver better value for money whilst improving outcomes for their local communities. There are six objectives of the new Act which authorities should consider:

  • Encouraging innovation in how goods and services are purchased: The new ‘Open Framework’ will simplify the process of working with the public sector, creating faster processes for buying, reducing red tape and allowing authorities to better meet urgent needs in their communities, quickly and efficiently.
  • Increasing flexibility in procurement: The introduction of a new, competitive and flexible process will allow councils to design the procurement process that best fits their needs.
  • Ensuring more transparency: A Central Digital Platform will collect information on how public money is being spent and report on outcomes, supporting improved contract management and allowing authorities to demonstrate responsible decision-making in maximising services for public benefit. This includes award Notices becoming mandatory.
  • Increasing social value: Current regulations mean up to now, authorities have awarded contracts based on Most Economically Advantageous Tender (MEAT). The new rules will shift to Most Advantageous Tender (MAT), with a greater emphasis on outcomes and added value, ensuring the public procurement process supports wider societal benefits.
  • Supporting greater supplier diversity: The centralised system and reduction of administration will remove barriers for suppliers to bid for contracts, meaning more competition and choice for authorities.
  • Maintaining standards and accountability: Central oversight means the safeguarding of standards, raising the bar on sourcing and contract management for compliant suppliers and allowing KPIs to be tracked to monitor outcomes.

Free and extensive government training, guides and webinars are available for procurement professionals and contracting authorities who may wish to ensure they fully understand the new law.

Local authorities should consider reviewing their current contract management governance, processes and procedures to make sure they are equipped to fully capitalise on the positive benefits of these changes.

Equity Energies is already underway in integrating these forthcoming changes into all our public procurement services, and existing authority clients will see very little by way of change beyond a renaming of our Dynamic Purchasing System (DPS) to Dynamic Market.

Article written by Alex Moore, Product Director.

Alex Moore