The UK Government has now introduced the Procurement Act 2023, in a bid to deliver growth, drive value for money, build transparency, strengthen modern slavery measures, up tech support, simplify procurement for sellers and give small businesses greater access to nearly £400 billion of the UK’s annual central government spend.
The Act – which has been called a “once-in-a-generation change” to public procurement laws – also delivers strong powers to exclude and debar suppliers from contracts on grounds of national security or poor performance, while allowing the general public to scrutinise procurement decisions via the new Central Digital Platform.
The Platform will allow suppliers to register their details and view all bidding opportunities in one place, which the Government claims will encourage more suppliers to bid for government work thus increasing competition and supporting economic growth.
Delivering on the Government’s ‘Plan for Change’, the Act – which is backed up by a new National Procurement Policy Statement (NPPS) – sets rules that all public bodies must follow when they buy goods and services.
It also seeks to slash red tape that makes the contract application process hard for small and medium-sized enterprises (SMEs), while introducing a mandate of 30-day payment terms for all public sector contracts to put an end to late payments.
Additionally, costs for both business and the public sector will be reduced through new processes, providing greater flexibility for buyers who can tailor procurement to suit their exact needs. This could look like providing public bodies with more opportunities to negotiate with suppliers, using built-in stages to procurement cycles such as demonstrations and testing prototypes.
Cabinet Office Minister Georgia Gould said public sector procurement can now fully deliver on the Plan for Change, unleashing local growth, opening up opportunities and embedding transparency and accountability.
“The Procurement Act, supported by our new National Procurement Policy Statement, will tear down barriers that stop small businesses from winning government work, giving them greater opportunity to access the £400 billion spent on public procurement every year, investing in home-grown talent and driving innovation and growth,” she said.
Emma Jones CBE, Founder of Enterprise Nation, said accessing public sector work can act like a growth accelerator for SMEs.
“Government contracts are solid and reliable and pay within 30 days. They help SMEs develop and invest in new processes, products and efficiencies, as well as take on more staff in their local community,” she said.
“By seeing government procurement through this lens, opening up contracts to more diverse and community-based businesses will be a powerful way to deliver economic growth.
“My organisation has already been busy readying SMEs for this moment. This legislation is the beginning of the next step in the journey to increasing government spend with SMEs and boosting the economy.”
Terry Corby, founder and CEO of Good Business Pays, said the public sector represents a huge opportunity to drive growth in the UK.
“Buying more from SMEs, making it easier for them to tender for work and get paid faster will help drive growth in our communities across the UK,” he said.
“The commitment to pay all suppliers through the supply chain in under 30 days is important. If implemented well, the new Procurement Act will represent the biggest step-change towards best practice payment culture.”
