Procurement Act 2023: A Bold Reform Delayed for Greater Impact
The Procurement Act 2023 is set to bring about a significant overhaul of public sector procurement in the UK, creating a simpler, more transparent system that promises to deliver better value for money, promote economic growth, and open up opportunities for small businesses and social enterprises. This landmark piece of legislation aims to raise standards across the board, aligning procurement with the Government's wider missions of fostering social value and improving the efficiency of public spending.
However, as recent developments have shown, this much-anticipated reform will not go live until 2025. The delay, while frustrating for some, is intended to ensure that the implementation of the Act is as seamless and effective as possible.
A New Era of Public Procurement
The core vision of the Procurement Act 2023 is to streamline the public procurement process, making it easier for contracting authorities to navigate and for businesses, especially small enterprises to participate. The previous complex frameworks often deterred smaller entities from bidding for public contracts, limiting competition and driving up costs for the public sector.
The Act also prioritises "social value," meaning that the Government will not only seek to get the best price for goods and services but also aim to generate positive societal impacts through its procurement decisions. This includes supporting economic growth, improving sustainability, and fostering innovation.
Why the Delay to 2025?
While the original goal was to commence the Procurement Act in 2023, the Government has now announced a postponement until February 24, 2025. This delay, as noted by Government officials, stems from the need to ensure the right policy framework is in place to maximise the benefits of the Act. Specifically, the new administration has highlighted that the previous National Procurement Policy Statement does not sufficiently address the full potential of public procurement to deliver on its ambitious goals.
A key part of the delay is tied to the development of a revised National Procurement Policy Statement. This new statement will set out the Government's clear priorities for public procurement, with a stronger focus on delivering value for money and economic growth. Importantly, it will also better align procurement practices with the Government’s broader missions, including fostering innovation, increasing the role of small businesses, and improving sustainability.
Preparing for a Smoother Transition
By taking this additional time, the Government intends to ensure that when the Act does go live in 2025, both contracting authorities and suppliers will be fully prepared. This preparation period will allow for:- Stronger Policy Foundations: The new National Procurement Policy Statement will give clear direction to contracting authorities, ensuring they are aligned with the broader goals of the Government's missions.
- Better Support for Small Businesses and Social Enterprises: The delay provides more time to develop support systems that will help smaller entities navigate the new procurement processes, opening up public contracts to more new entrants.
- Training and Capacity Building: Public sector bodies will have more time to train staff, familiarise themselves with the new requirements, and adjust their processes to ensure compliance when the Act finally comes into force.
- Seamless Regulatory Transition: By taking the extra time, the Government hopes to avoid the potential pitfalls that can arise from rushed implementations. The goal is a smooth regulatory shift that will minimise disruptions for both the public and private sectors.
Collaboration Across the UK
In addition to setting a new commencement date, the UK Government is engaging with devolved administrations in Wales and Northern Ireland. Letters have been sent to the Welsh Government and Northern Irish Executive, seeking their agreement on the new timeline and ensuring that there is a coordinated approach across the United Kingdom. The intention is to work collaboratively in implementing the Act, ensuring that its benefits are felt nationwide.
Conclusion: Building for Long-Term Success
While the delay of the Procurement Act 2023 to 2025 may come as a disappointment to some, the rationale behind it is clear. The Government is committed to ensuring that when the new regime goes live, it will do so with the full backing of a robust and ambitious policy framework that reflects its wider missions. This extra time will enable the preparation necessary to ensure a smoother, more efficient transition that will ultimately benefit the public sector, businesses, and society at large.
In the long run, this approach could deliver a procurement system that not only cuts costs but also drives innovation, strengthens the economy, and supports a more inclusive, sustainable public sector.
