Preparing for the UK Procurement Bill – what to expect

The UK Government’s new Procurement Bill deals with ground rules for how public sector organisations deliver hundreds of millions of pounds of investment through their supply chains. It covers everything from major infrastructure programmes through to day-to-day services for government departments or local authorities. In many ways public procurement sets the standards which filter through the rest of the economy.

The power of procurement

From initial assessments of its draft content, it is clear that the bill will help to harness the power of procurement to drive real and positive change – aiming to simplify a complex regime and deliver improvements in social value and sustainability.

Procuring bodies will need to understand the proposed changes and prepare for this significant shift.

In the run-up to the bill’s final publication, and it coming into force in October 2024, we will be helping clients get ready for the new procurement era, with expert insight and roundtables, and analyses of the topics that will define the future of procurement, from artificial intelligence (AI) to net zero.

It’s never too early to start getting ready – and these are the key themes to understand as we head back into parliamentary session in the autumn.

Simplification and centralisation

The Procurement Bill has had a long gestation, and it’s easy to forget it emerged from the Brexit deal. The government’s original focus for the bill was to cut ‘red tape’ and simplify the procurement regime, and this is still a key feature of the detailed draft legislation.

Hundreds of regulations will be removed or simplified, and separate procurement rules by discipline will be centralised in a single, uniform set of regulations. The bill will also group procedures and framework agreements into fewer, common, consistent types that are easier to understand and plan around.

Alongside the centralisation programme in the bill, a new, single ‘debarment list’ has been proposed, naming ‘excluded suppliers’ and applicable across all procurement disciplines.

This will introduce, for the first time, the ability to exclude bidders based on past ‘poor’ delivery experience.

The new regime aims to make planning and tendering simpler for both clients and suppliers, but also raises the stakes for delivery, and the possibility of a project-specific issue growing to a major procurement-wide problem.

Redefining value and setting higher standards

As these initial changes show clearly, the ambition behind the bill is to 'raise the bar’. There will be a much greater emphasis on achieving value for money from government programmes, and the more stringent measurements and reporting this will entail from sector firms. But it might also be said to be ‘broadening the bar’ – expanding the very definition of value the government is seeking to achieve through investment.

The proposals in the draft bill will set the stage for a significant emphasis on driving social value benefits, with future secondary legislation likely to specify more stringent rules over how social value is promoted, measured and monitored.

This is an exciting development, and one which brings legislation in line with the vanguard of our sector – those already looking to use major projects to change lives and leave a positive legacy on communities across the UK.

For example, the bill proposes to introduce a duty on contracting authorities to prioritise small- and medium-sized enterprises (SME) and take account of the barriers to entry in the market they might face.

Preparing for social value reporting

Many firms are already well down the road of social value reporting, which will become even more important to prepare for over the next year. To line up with the guidance coming forward, clients should be engaging with their supply chains to ensure they are set up and ready for robust tracking of everything, from supplier diversity and local job creation to training and apprenticeship provision, and much more.

These internal processes to capture a wider understanding of value will need refining over time, so getting started early is vital.

In some cases, it will be a huge task to delve deep through supply chains and delivery impact – getting a forensic look at where labour and materials are coming from and where benefits are being felt – so that contracting authorities can assess the relevant information.

A regime fit for a radically different future

The final overarching objective of the bill is to establish a procurement landscape that is prepared for the rapidly evolving world we find ourselves in. Digitalisation and technological innovations such as AI are set to completely redefine our world, while the climate crisis continues to grow in scale.

Procurement must adapt especially as it is uniquely placed to deal with these existential challenges – offering as it does a clarity of national vision and mass investment to lead changes throughout the economy.

As with social value, the bill will be significantly more rigorous in its demands for reporting and targets on net zero, and firms will need to prepare for this step change. On technological innovation and AI, the potential legislative response is, as yet, less clear.

There will be a duty for the Cabinet Office to provide a centralised, modern digital platform that contracting bodies can utilise for procurement – indicating a clear awareness of the digitalisation challenges ahead.

However, it may be a reason for the bill’s further delay this year that AI development has reached a crux point, and this bill would ideally set guidance in this area for authorities and suppliers.

Setting the stage for world-class procurement

With the Cabinet Office due to publish its latest update on the bill this month, we’ll hopefully get further clarity on the priority areas for final amendments to the legislation. Our teams will continue to closely follow the bill’s progress as it becomes an Act of parliament, and we look forward to helping clients prepare over the next 14 months.

Although it has barely hit the headlines, few bills in recent memory have been expected to have such a significant and wide-ranging impact. This is a chance to institute a world-class procurement regime that embraces social value, sustainability and innovation, thus helping our economy get set for the future.