Delay to the commencement of the Procurement Act 2023

The Government today (Thursday, 12 September 2024) announced the coming into force of the Procurement Act 2023 is delayed until 24 February 2025. It will shortly make new regulations to confirm that decision.

In a written ministerial statement, the Government stated that the reason for the delay was the desire to publish a new National Procurement Policy Statement (NPPS). The Government indicated that it considered the existing statement, published in May, did not "meet the challenge of applying the full potential of public procurement to deliver value for money, economic growth, and social value".

The delay proposed by the Government will allow it to produce a new NPPS that "clearly sets out this Government’s priorities for public procurement in support of our missions". It wants to ensure that the Act "goes live with a bold and ambitious Statement that drives delivery of the Government’s missions". In an accompanying announcement, the Cabinet Office noted it was appropriate for the new Government to want to put in place a NPSS that reflected its priorities. The announcement also indicated that the Government proposed to consult on the replacement NPSS, which will provide an opportunity for suppliers and contracting authorities to influence its contents.

The NPPS is published under section 13 of the Act, and sets out the "Government's strategic priorities in relation to procurement". A separate NPPS for Wales is published by the Welsh Ministers. All contracting authorities other than private utilities must have regard to the relevant NPPS and they must apply it in relation to all procurements, other than the award of contracts under frameworks or using dynamic markets.

The current NPPS, reviewed in an earlier blog, is a relatively light-touch document. The replacement is likely to be significantly more ambitious. This will place additional demands on contracting authorities, who will need to document how they have had regard to the new NPPS in any procurement to which it applies. They will also need to balance how to apply the NPPS' objective in any particular procurement and how they interact with the objective in section 12. The publication of a new NPPS will not affect the rest of the Act or any of the obligations under it.

The delay will allow greater time for the transition to the new public procurement regime and allow for a smoother and more effective implementation for both contracting authorities and suppliers. Many contracting authorities and suppliers will welcome the delay, which will give some welcome breathing space to ensure everything is in place, including any new IT systems, to fully implement the Act.

Contracting authorities with procurements planned between November 2024 and February 2025 will face a choice. If the procurement is not time critical or they can extend existing contracts, they may choose to delay until the Act comes into force – remembering, of course, to assess the procurement against the new NPPS when it is published.

For time critical procurements, or where the contracting authority decides to press ahead, they will need to review their procurement documents to ensure they are consistent with the procedures under the current regulations. This could require extensive revisions, particularly if contracting authorities have fully embraced the new flexibilities in the Act. There are even some contracts that fall outside the scope of the Act, but which would be caught by the current regulations. In those cases, the contracting authorities concerned will face a significant task.