Are you ready for the Procurement Act 2023?

When it comes into effect in February 2025, the Procurement Act will overhaul UK procurement law, simplifying processes and increasing opportunities for smaller businesses.

The Act is also set to further embed Social Value into public procurement – which made it a significant talking point during the 2024 Social Value Conference. Here are some of the top tips and insights for both businesses and authorities that we heard.

Getting ready for the Procurement Act shake-up

Despite the opportunities the Act provides, many organisations are still experiencing challenges in preparing and welcomed the delay in implementation.

For example, Tina Holland, Programme Manager at the Local Government Association, reported a split of about 50% – with half of the local councils she works with disappointed by the delay, and half relieved.

But similar challenges will affect the private sector as well – particularly SMEs that might have limited time and resources to upskill teams and prepare to comply with new requirements.

Clive Higgins, UK Chair and CEO of Leonardo, said:

The Procurement Act 2023 is the biggest change we’ve had in procurement in over 30 years. We’re now stepping away from European-derive legislation that we’ve been very used to, and moving into a different environment.

Clive Higgins, UK Chair and CEO of Leonardo

So, how can we make the most of the remaining time to prepare?

Training and education

One immediate priority is to upskill teams, ensuring all relevant personnel undergo specific training on the Act’s requirements and how it will impact Social Value requirements.

Lorraine Cox, Director of STAR Procurement and Chair of the National Social Value Taskforce, reminded participants that a variety of resources from reputable sources are already available. For example, the Cabinet Office has launched its Transforming Public Procurement Knowledge Drops to help authorities prepare for the changes ahead.

Upskilling public procurement teams

Speakers noted two challenges that authorities will need to deal with:

Transitioning to new requirements: Some authorities will need to balance new and old regulations for a period. Data quality will be important in making sure all parties have the necessary clarity and accuracy to move from the old regime to the new one.

A new digital system: The Procurement Act 2023 will update the existing ‘Find a Tender’ system with the ‘central digital platform’, which contracting authorities will publish procurement information. New training and support will likely be required to help procurement and contract management teams, as well as suppliers. This may be an opportunity to invest in e-procurement systems, which can automate routine tasks and give staff more time to focus on value-adding activities.

Early market engagement

Supplier engagement was another hot topic at the conference; in fact, many viewed it as crucial to meeting the Act’s requirements.

For example, local authorities should make clear and concise Social Value information available at the pre-tender stage, as well as offering support where needed. Getting this step right will:

Improve supplier relations

Develop a diverse supplier base

Foster open and transparent communication throughout all phases of procurement

Early market engagement has always been best practice, but has not always been the practice. I think having the opportunity to speak to suppliers really early on will help them to shape the requirements and lead to better outcomes.

Lee Jackson, Managing Director at North-West London Procurement Services

Social Value in procurement: How to stay transparent

The Procurement Act is set to raise the bar on Social Value requirements in public procurement and enhance transparency at all stages of procurement.

Darren Knowd, Chief Executive of DRKNOWD, commented:

The Social Value Act says there is a duty to consider Social Value, which is a very light, low-level responsibility. With the new National Procurement Policy Statement, procurers will need to ‘have regard to’ certain priorities set out, which is a much higher legal test than ‘consider’. It means you have to unless you have a good reason not to.

Darren Knowd, Chief Executive of DRKNOWD

But how exactly can organisations get ahead of the anticipated increase in transparency requirements?

Here are a few recommendations from the experts:

Maintain thorough records: Clearly documenting all procurement decisions, including justifications for choices made, will be key in demonstrating compliance. It will also help you spot poor performance and understand the root causes.

Embed accountability into contracts: Dr Rebecca Rees, Head of Public Procurement at Trowers & Hamlins commented:

If you are asking for anything at the procurement stage, and you are turning it into a differentiator, put it in your contract terms and make it stick through the commercial lifecycle... If the only reason someone has won a contract is on the basis of its Social Value response, then make sure that they can lose the contract for failure to deliver that, or reimburse you... When allocating marks, it is often the Social Value section that is the least thought-through, the least well-evaluated, and therefore becomes fodder for challenge.

Dr Rebecca Rees, Head of Public Procurement at Trowers & Hamlins

Stick to a consistent measurement system: Relying on a standardised method, such as the Social Value TOM System™, is the only way to ensure that all stakeholders are on the same page and that the true impact of a project can be assessed.

Publish end-of-project results: Panelist after panelist stressed that publishing project outcomes, particularly related to Social Value, can help to guarantee that commitments are upheld, and that what was promised at the bid stage is actually delivered.