Understanding the Birth of the 2023 Procurement Act

The UK has taken a significant step forward in how it spends public funds with the introduction of the Procurement Act 2023. The procurement reform is not just about changing rules and regulations, it is about creating a system that works better for everyone. It replaces the EU-based procurement system with a simpler and more transparent structure. This aims to improve how billions of pounds of public money are spent each year and deliver better outcomes for public bodies, suppliers, and taxpayers alike.

However, to understand why the Procurement Act matters so much, we need to examine its historical context, the drivers behind the reform, and the subsequent changes it introduces. This blog post breaks down the history, reasons for reform, and key features of the new Act in plain English. It is the first of a series of posts to come on the new procurement act. So, whether you are a small business owner, an NHS or public sector employee, a procurement and supply chain student, or a curious citizen, you may need to sit down, grab a cup of coffee and enjoy this ride.

 

Historical Context: European Union and Brexit's Impact

 

For a long time, the UK's public procurement laws were deeply rooted in European Union (EU) directives. These rules were designed to harmonise procurement processes across EU member states, ensuring fairness, competition, and transparency. However, the EU framework also came with its challenges as many found it overly complex, rigid, and slow to adapt to the specific needs of UK contracting authorities. Before Brexit, UK procurement was governed by four main regulations derived from EU directives. They are:

 

1. Public Contracts Regulations 2015
2. Utilities Contracts Regulations 2016 
3. Defence and Security Public Contracts Regulations 2011
4. Concession Contracts Regulations 2016 

 

The EU created different rules for different sectors. This made the system complicated and hard to follow. Many people said the rules were too detailed and resulted in excessive paperwork. Businesses often complained that the rules made it harder to grow or invest. For example, Business Europe said that "regulatory burdens are one of the two top problems named by businesses." A blog from the London School of Economics explained that people often see the EU as a "giant bureaucracy." A think tank called ECIPE said that too many rules are hurting Europe's economy. The European Parliament has also called for fewer and simpler rules. These examples demonstrate that many people found the system too complex and challenging to use, despite its effectiveness under the EU framework.

 

Following Brexit, the UK gained the freedom to redesign its public procurement system in a manner that addresses its peculiar needs. This fresh start allowed policymakers to create a system tailored to the UK's specific needs, one that supports innovation, improves access for smaller suppliers, and delivers better value for taxpayers. The result is the Procurement Act 2023: a modern, streamlined framework that makes it easier for public bodies to buy goods, services, and works in a fair and transparent way. It replaces the old regulations with a single, unified approach, setting the stage for a more wholesome buying process.

 

Key Drivers for the 2023 Procurement Reform

 

The push for procurement reform wasn't just about cutting ties with the EU, it was even more about transparency, improving efficiency and delivering better social value. There were three key drivers behind the changes introduced by the Procurement Act. They include:

 

1. Speed

 

Many people often criticise procurement processes for being too slow. The Public Procurement Review Service reported ongoing supplier complaints about delays in payments and poor procurement practices, highlighting how slow processes can harm supplier relationships and service delivery. Delays in awarding contracts can result in missed opportunities, wasted resources, and frustration for both contracting authorities and suppliers. Hence, the Procurement Act aims to expedite the process by reducing unnecessary bureaucracy and granting contracting authorities greater flexibility to design procedures that meet their specific needs.

 

2. Simplicity

 

Under the old system, contracting authorities had to navigate four separate sets of regulations, each with its own rules and requirements. By combining these rules into one, the Procurement Act 2023 creates a single, clear rulebook for public procurement, which helps contracting authorities follow consistent guidance and makes it easier for suppliers to understand how to take part. It also reduces duplication and confusion across different sectors, just as it emphasises inclusion of SMEs and strategically disadvantaged businesses. For example, a small charity bidding for a local government contract could've previously struggled with complex legal language and multiple regulations. Now, the process is simpler, more transparent, and easier to access.

 

3. Transparency

 

The Procurement Act 2023 makes public spending much clearer by requiring all contract opportunities to be posted on a single central platform and by making procurement decisions easy to find and understand. The Act helps businesses find and bid for contracts more efficiently, and it enables citizens to better see how public money is spent. It provides authorities with stronger oversight, allowing them to identify waste, poor performance, and signs of misconduct more quickly. That makes it easier to investigate problems and hold people or organisations to account. By increasing openness and accountability, the law builds public trust and reduces opportunities for corruption. It also encourages better value and performance from suppliers.

 

Overview of the Procurement Act 2023

 

In plain terms, the Procurement Act 2023 became law in October 2023 and came into force in February 2025. It sets out the rules public bodies must follow when buying goods, services, and construction work across England, Wales, Northern Ireland, and for some reserved functions in Scotland. Scottish devolved authorities may retain their own procurement laws, just as Welsh and Northern Irish authorities may be exempt from some requirements of the new Act. Some other excluded authorities include the security service, secret service, intelligence agencies, the Advanced Research Projects Agency, and the Government Communications Headquarters.

 

Joint procurement is allowed, even across different regimes, but it is first important to understand the specific regulations that apply to that particular procurement. For example, you need to understand which contracting authority is leading the procurement, which part of the UK they are located in and whether their functions are reserved or devolved or a mix of both. The Act applies to contracts above certain financial thresholds (e.g., large purchases of goods, services, or construction). These are called covered procurements. Some rules also apply to smaller contracts, particularly when the UK is required to fulfil an international treaty.

 

A wide range of organisations must follow the Act if they meet the definition of a contracting authority. This includes central government departments, NHS trusts, local councils, and public utilities. Private firms can also be subject to the rules if they operate under public control or provide services on behalf of the public sector. A typical illustration of where the Act may apply to a private company is when it runs public transport services under public oversight.

 

It is also important to note that not every contract is subject to the same rules under the Procurement Act 2023. Some types of contracts are exempt or fall under special rules. Distinctively, concession contracts, defence and security procurements, certain utility deals, and light touch contracts use tailored regimes. Similarly, healthcare procurements covered by the Provider Selection Regime 2023 are treated differently and are not processed under the standard parts of this Act.

 

Taken together, the Act aims to create clearer, more consistent rules for large public purchases, while still allowing flexibility where special cases or other laws apply. This helps public bodies buy more transparently and makes it easier for suppliers to understand when and how the rules will affect them.

 

Why Does the Procurement Act Matter?

 

The Procurement Act 2023 brings practical changes that make public buying easier and fairer for everyone. Firstly, it simplifies the rules so public bodies follow similar basic approach, which reduces confusion and speeds up decision making. This shared framework enables staff to apply the rules consistently and helps suppliers understand what to expect when bidding for contracts. Moreover, the Act lets authorities choose processes that match the task at hand. For instance, a council can run a quick call-off competition for a simple bin installation project, whereas for specialist purchases, such as medical equipment, a hospital can use a more detailed procedure.

 

Additionally, the provision of a central digital platform and clearer rules enhances access to market data and existing frameworks. As a result, contracting bodies can make more informed choices, and suppliers gain better visibility of opportunities, which, over time, delivers better value for public money. The Act also lowers barriers for small businesses and voluntary organisations. For example, a local cleaning firm can now follow a more straightforward, less rigorous route to bid for NHS or local council contract work without needing a sophisticated legal or bidding team. Consequently, the supplier base broadens and competition becomes fairer.

 

Finally, the law grants authorities enhanced powers to exclude suppliers who pose genuine risks, such as repeated poor performance, corruption, or serious environmental violations. This aspect of the Act is interesting as it provides contracting bodies with clear legal grounds to cease doing business with firms that jeopardise public funds, service quality, or community welfare. It also encourages suppliers to meet higher standards, as failing to do so can result in exclusion from future contracts. Therefore, public funds, national interests, and workers' rights receive better protection, and responsible behaviour among suppliers is encouraged.

 

Conclusion

The reforms to the Procurement Act 2023 may not make headlines, but they will significantly influence how public services are delivered across the UK. It represents a bold step towards addressing the complexities of the old regime's shortcomings and laying the foundation for a more effective and equitable approach to public procurement. By simplifying processes, improving transparency, and supporting SMEs and VCSEs, the Act ensures that public procurement works better for everyone as it shifts power back toward accountability, value and local opportunity. As we move on to the implementation (and if we do get it right as intended), taxpayers will see more quality services, businesses will find fairer routes into public markets, and public institutions will be better positioned to spot and stop malpractice.