The new Procurement Act 2023, coming into force 24th February 2025, is set to revolutionise the way public procurement operates in the UK. With a clear mission to reform procurement, the Act aims to make the process more accessible, efficient, transparent, and flexible for both contracting authorities and suppliers.
This is a much-needed breath of fresh air, as Lindsay Maguire, Deputy Director for Procurement Reform at the Cabinet Office, pointed out the current state of procurement as “slow, bureaucratic, and full of red tape” (Civil Service World).
But how valuable is the new Procurement Act 2023?
Operational Value
The Procurement Act 2023 intends to improve the efficiency of the process that delivers public services. It proposes a framework that simplifies decision-making and introduces a more adaptable commercial system. The goal is to ensure the system can efficiently meet our nation's needs while still adhering to international obligations.
This means that the entire journey, from procurement to service delivery, will be more coherent and less cumbersome. For contracting authorities and suppliers, this translates to a smoother transition from planning to execution, making the operational aspect of procurement more straightforward and effective.
The operational value that comes hand in hand with the new Act could also be a benefit to councils and government departments facing tight budgets or potential bankruptcy as they are able to procure services that are efficient and therefore cost-effective.
Monetary Value
Monetary value might conjure images of price tags and budgets, but in the context of public procurement, it's all about getting the most out of public funds. The Government already utilise a Value for Money framework which emphasises that the “costs of a service is justified by its expected benefits to the UK public as a whole.”
With the Procurement Act 2023, there is a strong focus on making sure that taxpayer money is spent wisely and transparently. By embedding transparency in each stage of the commercial lifecycle, the Act ensures that the public as well as government bodies can scrutinise how money is being spent.
Social Value
According to the Local Government Association, social value is about looking beyond the financial cost of a contract to consider how the service can improve the economic, social and environmental wellbeing of an area. It's about using funds to generate widespread benefits and contribute to the greater good.
The Procurement Act 2023 recognises the importance of social value by allowing more flexibility in selecting suppliers, especially those who can provide a meaningful impact on society.
The Act paves the way for smaller organisations and social enterprises to compete for public contracts, driving market diversity, competition, and innovation. Smaller suppliers and social enterprises often bring unique and innovative solutions to the table, and due to their lower overheads and benefits of localised networks, they can offer both operational and monetary value too.
By relaxing restrictions on factors like supplier location, the Act also enables contracting authorities to support local suppliers and foster social value within the communities they operate.
Andrew Neighbour, Bid Director at We Are Group explains how we have been leading the way in supplying services with social value, something we've been doing for over a decade:
"We are well placed as a social impact organisation to take advantage of changes to procurement as result of the Act. We generate social value on everything we do and measure this using Social Return on Investment. We are excited to help others realise the benefits of promoting social value in the communities we serve."
The Procurement Act 2023 marks a transformative phase for public procurement, creating a procurement process that’s value-driven and works better for everyone. As an SME and social enterprise, we can’t wait to see how the new procurement regime will generate more value.
