The Procurement Act 2023 is a new set of regulations that introduces major changes to the way UK businesses procure goods and services from the public sector. If your business relies on government contracts or purchases IT solutions, it’s important to understand how the new rules will affect your procurement process.
Set to come into force on 24 February 2025, the Act simplifies procurement, increases transparency, and places greater emphasis on social value. This guide explains what these changes mean for UK businesses and how to prepare for the new procurement landscape.
Key Changes in the Procurement Act 2023
1. A Simplified Procurement Framework
The Act consolidates over 350 different procurement regulations, including the Public Contracts Regulations 2015, into a single, more accessible ‘rule book’. This means fewer bureaucratic hurdles when businesses engage in procurement, making it easier to understand and participate in government contract opportunities.
2. More Flexible Procurement Procedures
Public bodies will have greater flexibility in how they procure IT and other services. The introduction of the Competitive Flexible Procedure allows them to design processes suited to their needs rather than following rigid procedures.
For businesses procuring IT solutions, this could mean:
- More opportunities to negotiate tailored contracts.
- A greater variety of suppliers to choose from.
- More competitive pricing and service models.
3. Increased Transparency in Procurement
The Act embeds transparency throughout the commercial lifecycle.
Key benefits for businesses include:
- Easier access to contract opportunities via a centralised digital procurement platform.
- More information on previous contract awards, helping businesses make informed decisions.
- Greater insight into supplier performance, ensuring higher-quality services.
4. Focus on Social Value and Ethical Procurement
Public sector buyers will be required to consider public benefit when procuring goods and services. For businesses, this means:
- Greater preference for sustainable products and services.
- Increased demand for ethical supply chains and responsible sourcing.
- Higher emphasis on cybersecurity and data protection standards in IT procurement.
5. Stronger Supplier Performance and Compliance Checks
Public bodies will have more power to exclude suppliers with a history of poor performance or unethical practices.
Businesses should be aware that:
- Suppliers failing to meet contract expectations could be blacklisted.
- Compliance with cybersecurity standards and data protection laws will be more closely monitored.
- Businesses may be required to demonstrate value for money beyond just offering the lowest price.
How the Act Affects UK Businesses Procuring IT and Other Services
1. Greater Choice and Competition
The changes promote a more competitive supplier market, which means businesses will benefit from:
- More supplier options for IT, cloud services, and software procurement.
- Competitive pricing and service offerings as suppliers adapt to the new rules.
- Greater innovation, as public sector buyers seek cutting-edge solutions that deliver public benefit.
2. Higher Standards in IT Procurement
If your business is procuring IT solutions, expect:
- Increased emphasis on cybersecurity compliance (e.g., Cyber Essentials certification).
- More scrutiny over data protection and software interoperability.
- A push toward cloud-based, scalable, and sustainable IT solutions.
3. More Sustainable and Ethical Procurement Practices
With a focus on social value, UK businesses procuring services may need to:
- Prioritise green and sustainable technology solutions.
- Work with suppliers who adhere to ethical sourcing and labour practices.
- Choose IT solutions that promote digital inclusion and accessibility.
4. More Transparency in Public Procurement
Businesses will benefit from better visibility in the procurement process, allowing them to:
- Track supplier performance and make informed procurement decisions.
- Access clearer pricing and contract information.
- Ensure greater accountability in public sector contracts.
Steps UK Businesses Should Take to Prepare
1. Stay Updated on Procurement Opportunities
- Regularly check government procurement portals for contract opportunities.
- Assess how the new transparency rules can help you compare suppliers more effectively.
2. Strengthen Supplier Due Diligence
- Ensure your suppliers meet compliance and security standards.
- Verify their social value commitments, including sustainability and ethical sourcing.
3. Prioritise Cybersecurity and Data Protection
- If procuring IT services, require Cyber Essentials or ISO 27001 certification.
- Ensure suppliers meet GDPR and government security standards.
4. Align Procurement Strategies with Social Value Goals
- Consider sustainability and ethical sourcing in procurement decisions.
- Partner with suppliers who demonstrate positive community impact.
5. Monitor the Procurement Review Unit (PRU)
- Stay informed about PRU updates and compliance guidance.
- Be aware of any changes that may affect procurement decisions.
The Procurement Act 2023 is designed to create a more efficient, transparent, and ethical procurement process for UK businesses. By understanding the new rules and aligning procurement strategies with social value and compliance standards, businesses can take full advantage of the opportunities presented by the reformed system.
By adapting to the changes, your business can benefit from better supplier choices, stronger competition, and improved service quality, ensuring your procurement decisions align with both business objectives and public benefit.