The Procurement Act 2023

On 26 October 2023, the Procurement Act 2023 (the “Act”) was granted Royal Assent, becoming an Act of Parliament. The Act came into force on 24 February 2025. 

Statutory Instruments / Secondary Legislation

While the Act is the primary legislation governing public procurement in the UK (except in Scotland, where the Scottish Government has opted to retain its own regime), it is supplemented by statutory instruments and secondary legislation. There are currently four instruments to be aware of:

• Procurement Act 2023 (Commencement No. 1 and Saving Provision) Regulations 2024;
• Procurement Regulations 2024;
• Procurement Act 2023 (Commencement No. 3 and Transitional and Saving Provisions) Regulations 2024; and
• Social Partnership and Public Procurement (Wales) Act 2023 (Commencement No. 2) Order 2024.

Government Commercial Function / Cabinet Office Guidance

In addition, the Act has been supplemented by guidance issued by the Cabinet Office, under four headings: Plan, Define, Procure and Manage. The latest versions of the published documents can be accessed via the UK Government’s website.

Plan

• Transitional and Saving Arrangements
• Contracting Authority definition
• Covered Procurement definition
• Exempted Contracts
• Devolved Contracting Authorities
• Covered Procurement Objectives
• National Procurement Policy Statement
• Utilities Contracts
• Defence and Security Contracts
• Concession Contracts
• Light Touch Contracts
• Reserving Contracts for Supported Employment Providers
• Pipeline Notice

Define

• Valuation of Contracts
• Thresholds
• Below-Threshold Contracts
• Mixed Procurement
• Planned Procurement Notice
• Preliminary Market Engagement
• Technical Specifications
• Treaty State Suppliers
• Competitive Tendering Procedures
• Direct Award
• Dynamic Markets
• Frameworks
• Lots
• Conflicts of Interest

Procure

• Central Digital Platform and Publication of Information
• Time Periods
• Conditions of Participation
• Exclusions
• Exclusions Annex 2: National Security Grounds
• Debarment
• Assessing Competitive Tenders
• Electronic Communications
• Modifying a Competitive Procurement
• Procurement Termination Notices
• Assessment Summaries
• Contract Award Notices and Standstill
• Contract Details Notices
• Procurement Oversight
• Remedies

Manage

• Electronic Invoicing and Payment
• Payments Compliance Notices
• Contract Performance Notices
• Contract Modifications
• Contract Termination
• Key Performance Indicators

The Procurement Act 2023 (the “Act”) "consolidates the current four sets of procurement regulations, which transpose EU Directives into UK law, into a single regime", affecting the following:

• “Public contracts, awarded by most central government departments, their arms-length bodies and the wider public sector including local government, health authorities and schools" awarded in accordance with The Public Contract Regulations 2015;

• "Utilities contracts by utilities operating in the water, energy and transport sectors" that previously fell within the scope of The Utilities Contracts Regulations 2016;

• "Concession contracts for the supply of works or services where public authorities give a supplier the right to exploit works or services" awarded in accordance with The Concession Contracts Regulation 2016; and

• "Defence and security contracts" awarded under The Defence and Security Regulations 2011.

Cabinet Office Guidance: Over the years, the Cabinet Office have published guidance relating to these pre-Act regulations. Below is a list of all relevant guidance.

• Guidance on Completion of Forms and Notices pre-SIMAP
• Guidance on Amendments to Contracts
• Guidance on Awarding Contracts
• Guidance on Changes to Procedures
• Guidance on Transparency Requirements for Contracts Finder
• Guidance on Dynamic Purchasing System
• Guidance on E-Procurement and E-Communications
• Guidance on Frameworks
• Guidance on Invoice Payment
• Guidance on Provisions that Support Access for Small Businesses
• Guidance on Public-to-Public Procurement
• Guidance on Standstill
• Guidance on Subcontracting
• Handbook for the Concession Contracts Regulations
• LTR Guidance v28
• FAQs on Selection Questionnaire
• Social and Environmental Guidance
• Procurement Policy Note: Standard Selection Questionnaire
• Bid Evaluation Guidance Note

Overview of the procurement regime in Scotland

Public procurement is not a matter expressly reserved under the Scotland Act 1998 and is generally regarded as being a devolved matter within the legislative competence of the Scottish Parliament.

Like the pre-Procurement Act 2023 regime in England and Wales, the existing public procurement regime in Scotland is largely derived from EU public procurement Directives.  These have been transposed into Scots law through four Scottish Statutory Instruments, namely:

• the Procurement Reform (Scotland) Act 2024;
• the Public Contracts (Scotland) Regulations 2015;
• the Utilities Contracts (Scotland) Regulations 2016; and
• the Concession Contracts (Scotland) Regulations 2016,

(together, the “Scottish Procurement Regulations").

The Scottish Procurement Regulations apply (on a territorial basis) to contracting authorities (regardless of whether they are regarded as a devolved or reserved body) in respect of the procurement of public contracts in Scotland.

Following Brexit, the Public Contracts (Scotland) Regulations 2015 were amended by the Public Procurement etc. (EU Exit) (Scotland) (Amendment) Regulations 2020. However, these amendments are mainly technical in nature and do not substantially alter the substance of the 2015 Regulations.

Application of the Procurement Act 2023 in Scotland

Generally, the full provisions of the Procurement Act 2023 extends to Scotland (as provided at section 126) and therefore forms part of Scots law.

However, the Act expressly excludes the application of its provisions to a "devolved Scottish authority," which is defined as an authority which has functions which are "exercisable only in or as regards to Scotland and (a) none of its functions relate to reserved matters; or (b) some of its functions relate to reserved matters and some do not."

This means that the Act does not apply to devolved Scottish authorities that are governed, in relation to the procurement of public contracts, by the Scottish Procurement Regulations.

In practice, this means that the Scottish Government and its agencies, local authorities, Scottish public authorities (including those with mixed (both devolved and reserved functions) but with no cross border functions), universities and colleges and registered social landlords all continue to be regulated by the Scottish Procurement Regulations.

On the other hand, the UK Government, UK-wide or public bodies with cross-border functions and Scottish public authorities with reserved functions only are subject to the Procurement Act 2023 in relation to procurements in Scotland.

Considering that there will effectively be two public procurement regimes operating in Scotland, and the regime relating to devolved Scottish authorities is different to that applying in England and Wales, this could give rise to difficulties in cross-border procurements or where there is more than one awarding body (which are subject to the different regimes).

Section 115 of the Act therefore enables both the UK and Scottish governments to make regulations amending the application of those regimes to enable the use of such framework agreements or other arrangements in relation to cross-border procurements and draft Regulations have already been prepared by the UK Government.

The Act allows UK Government Ministers to regulate Scottish devolved authorities' access to procurement arrangements and joint procurements. It also permits Scottish Ministers to amend procurement laws for these authorities. Section 115A (added by the 2024 Regulations) specifies how the Act applies when Scottish devolved authorities engage in joint or centralised procurement with non-devolved authorities.

Scope for change to the procurement regime in Scotland

The Economy and Fair Work Committee of the Scottish Parliament recently carried out a post-legislative review of the Procurement Reform (Scotland) Act 2014 (the “Reform Act”), which was introduced ten years ago to establish a national legislative framework for sustainable public procurement that can contribute to Scotland's economic growth by improving procurement practices.

The Reform Act imposes general duties on contracting authorities concerning their procurement activities, including specific measures to promote transparency, consistency, and good practice in procurement processes, which sit alongside the Scottish Procurement Regulations.

The Economy and Fair Work Committee's review concluded with the publishing of a report on 21 June 2024 titled “Post-legislative scrutiny of the Procurement Reform (Scotland) Act 2014”.

In summary, despite advancements in transparency brought about by the Reform Act, small businesses and third sector organisations still face significant challenges in public procurement. The Committee highlighted that while the Reform Act has made some positive changes, there is still a need for further improvements to make the procurement process more accessible and business-friendly for all, especially for smaller entities looking to engage with public contracts.

Therefore, we may see further changes to the Scottish procurement regime in future.

Guidance

• Similar to the UK Government, the Scottish Government publishes Scottish Procurement Policy Notes (SPPNs) on an ad-hoc basis to provide guidance and advice on current policy issues.
• The Scottish Government has also drafted and published the Scottish Procurement Policy Handbook, which provides guidance on the rules and policies that apply to the procurement activities of public bodies in Scotland (including highlights of key legal obligations).
• The final piece of guidance from the Scottish Government is their Public Procurement Strategy (2023 – 2028).

The term "contracting authorities" refers to entities subject to the Procurement Act 2023 (the "Act"). 

Section 2 of the Act sets out the criteria to determine whether an entity falls within the definition of "contracting authority". This includes "public authorities", meaning those persons "wholly or mainly funded out of public funds", or "subject to public authority oversight" and are not operating on a commercial basis. Central government departments, local authorities and other public sector bodies fall within this definition and will therefore be subject to the Act.

A list of "excluded authorities" (i.e. those falling outside the scope of the Act) is contained at section 2(5). 

The Act does not change the scope of entities that are covered by the procurement legislation, and those entities captured by the previous procurement legislation will remain within the scope of the Act (unless circumstances mean the status of those entities has changed, such as, for example, due to a change from being publicly funded to privately funded).

Central Government:

• Ministerial departments (24)
• Non-Ministerial Departments (20) 
• Executive Agencies (424)
• High profile groups (114) 
• Public corporations (19)
• Devolved administrations (3) 
• Police authorities
• Health authorities

Local Government:

• County councils (21)
• District councils (164)
• Unitary authorities (62)
• Isles of Scilly 
• Metropolitan districts (36)
• London Boroughs (32) 
• City of London 
• Combined authorities (11)

Procurement Policy Notes ("PPNs") set out information and guidance for contracting authorities to consider when procuring good, works or services. They provide best practice guidance covering a variety of topics and can therefore help contracting authorities make sure their procurements are carried out in a cost-effective, ethically sourced and legally compliant manner whilst maintaining good supplier management.

There are three types of PPNs available:

• PPNs that apply to procurements conducted under the Public Contracts Regulations 2015 (“PCR PPNs”);
• PPNs that apply to procurements conducted under the Procurement Act 2023 (“Procurement Act PPNs”); and
• out of date PPNs.

The Procurement Act PPNs are generally similar to the PCR PPNs, but have been updated to align with the specific requirements of the Procurement Act 2023.

PPNs are produced by the Cabinet Office and Crown Commercial Services and are available under one openly accessible website. 

The Scottish Government also publishes Scottish Procurement Policy Notes and the Welsh Government produces Welsh Procurement Policy Notes. Each PPN should be checked to determine their specific scope and application.