A Quick Guide to the New Procurement Act for Local Government

What are the key aims?

The Procurement Act 2023 brings about significant changes to how public contracting authorities carry out their procurement practices, due to come into full effect in October 2024.

The Act is meant to simplify the procurement process, merging the previous four sets of legislation into a single framework. A key aim of the Act is to bring greater levels of transparency to the procurement process, with far more information put into the public domain. The public will be able to see exactly where their money is going, with visibility on contracts and suppliers. This information will be available on a government central digital platform.

The Act hopes to bring more SMEs, micro companies, and innovators into the procurement process, boosting British business and encouraging competition. It aims to eliminate cronyism and corruption, providing a fairer platform for competing tenders.

What are the new regulations?

For all contracts above £5m, three supplier KPIs will need to form part of the contract. These KPIs will need to be declared publicly and published both annually and at the end of the contract notice. If not met, or the supplier does not perform to the satisfaction of the contracting authority, the relevant notices will be sent to a cabinet office department to investigate the case with the potential for disbarment.

Contracting authorities with smaller contracts will be under no obligation to publish supplier KPIs. However, by doing so, they 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 the public.

Local government bodies spending over £100m annually on procurement will need to publish a pipeline notice with details of contracts over £2m spanning the following 18 months. In some cases, this will require cross-department strategy; if highways and planning departments, for example, have work planned for the same area, they will need to collaborate on producing accurate details and notices.

Another change requires local authorities 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 if the contract is not openly advertised.

A further change comes in the form of the standstill period between contract award and implementation. This ‘pause’ period will be set at 8 working days (currently 10), and is designed to give competing bodies the opportunity to challenge the tender if deemed unfair.

How can my department prepare?

The government suggests that procurement professionals should look at their procurement pipeline for the next 18 months in order to fulfil current obligations and foster a smooth transition period. Key suppliers should be notified of the forthcoming changes.

Local authorities should ensure their current information is up to date and easily accessible – where does this data currently sit in your e-procurement platform, and can this data be accessed by different employees in case of absence?

Keeping up with the demands of the Act will require a cultural shift. Procurement managers will need to be given the scope and authority to perform their jobs effectively. At the OneAdvanced Finance and Procurement Summit 2023, guest speaker Mohamed Hans of CIPFA noted: “A key recommendation is that every contracting authority has a procurement champion, someone who sits at the top table.”

Where can I learn more about the Act?

In order to keep up with any changes throughout 2024, any employee connected to procurement will need to keep an eye on the government’s Knowledge Drops service, where they’ll find an overview of the Act and practical information on how to prepare for the new rules.

Our white paper, The Procurement Act: Navigating Change will give you a good amount of detail on preparing for the new Act. You can also find the OneAdvanced Government team on stand B18 at DigiGov Expo 2024, where we’ll be happy to answer any questions you may have and discuss how our digital solutions can help prepare you for the changes that lie ahead.