Procurement professionals are at varying stages of readiness for the Procurement Act 2023 (PA23), which is set to come into force on 24th February. The Act introduces a considerable number of changes and requirements affecting public sector procurement processes.
Our recent survey of procurement professionals (Finance & Procurement Trends Report 2025) reveals that fewer than one in five (19%) believe their organisation is well prepared for PA23 implementation. Concerningly, 14% said they were either poorly prepared, or not at all.
PA23 will affect procurement professionals working in public sector organisations directly. The private sector will also be impacted on the supply side. Any organisations that supply or seek to supply a public sector organisation with goods and services will need to be ready. Getting ready will require understanding and preparing to mee the Act’s new requirements. The Act covers “bodies governed by public law” which includes organisations like National Highways and Network Rail. It also covers local authorities and councils, schools, the NHS, universities, blue light organisations, social housing organisations, and utilities.
Public sector spending ammounted to £407 billion gross in 2023/24. Therefore, any non-compliance or dragging of feet with the changes will have a significant potential fiscal impact on supplier businesses.
PA23 for suppliers
For private companies that are already supplying the public sector, or wish to explore new business opportunities with this valuable customer-base, PA23 will bring potential opportunities for increased participation in public contracts. The Act encourages a more open, transparent, and competitive bidding environment, which should benefit these organisations. It’s an unprecedented level of insight into bidding opportunities and decision-making criteria. In theory, it will enable businesses to better tailor their proposals to meet specific public sector needs. Those that take advantage will dramatically enhance their chances of success.
PA23 introduces simplified procedures, which can lead to quicker decision-making and reduced lead times for contract awards. This agility is beneficial for private companies seeking to engage with public sector contracts, as it allows for more efficient allocation of resources and faster project initiation.
The Act will also help the private sector by strengthening provision for prompt payments. Even the largest enterprises benefit from being paid on time. It allows them to manage their cash flow and resource allocations to optimum effect. At the same time, however, late payments can make or break a business. Smaller firms have even smaller margins for error.
According to data shared by the UK government, 52% of SMEs (around 2.8m businesses) suffer from late payments. This costs them £22,000 each year, resulting in around 50,000 business closures every year.
Benefits for small businesses and social enterprises
The Act is designed to improve and streamline the way the public sector procures goods and services. Therefore, it contains specific benefits to businesses not currently engaged in supplier contracts with this sector. Crucially, it provides them with a clear framework when bidding for contracts. With a focus on levelling the playing field, the Act will help small businesses, start-ups, and social enterprises gain an important foot in the door. This will in turn enable local public sector bodies to achieve their own supplier and sustainability targets related to adding social and economic value within the local economy.
As a private sector organisation, it’s crucial to understand how these changes will impact your operations. It will be critical to prepare for the opportunities and challenges that may lie ahead. It will require investment in time and other resources to adequately prepare in order to unlock potential new revenue streams. The government is providing lots of help for organisations that already trade with, or are seeking to trade with the bodies that fall under PA23, to help them ensure compliance.
PA23 for the public sector
Public sector procurement teams have been working hard to get up to speed with the changes required by PA23. Understanding and implementing these has undoubtedly placed a significant burden on organisations, requiring them to invest in additional resources with redirected focus. We found 57% of the procurement professionals who contributed to our survey expect to be managing an increased administrative burden because of PA23.
It might be easy therefore to lose sight of the potential benefits the Act will bring to local authorities and other public sector bodies. PA23 will help them achieve more transparency and accountability from their suppliers, to ensure better value for the public purse and higher quality service delivery, thus helping them achieve their own core objectives.
The compliance challenge
Procurement professionals recognise there will be specific challenges as they start to work within the requirements of the Act, and 50% of those in our survey said the biggest obstacle would be ensuring ongoing compliance monitoring. This was followed by ensuring supplier compliance (44%), adjusting current processes and systems (41%), and understanding the new requirements (37%).
In response to the new requirements, 60% have already begun implementing new compliance measures and 59% have been revising procurement policies and procedures. Half (49%) are training staff on new regulations, while 37% are investing in technology to help improve processes and ensure they conform with the requirements of PA23.
To make this less of a headache for already stretched public sector organisations, the Government has published some useful guidance. As a provider of sector-specific and PA23 compliant procurement solutions, OneAdvanced has created an online Procurement Act hub, providing more information including a video, white paper, and other resources, as well as specific information for charitable organisations.
We would urge any supplier or public sector procurement leaders to consider using appropriate digital solutions that are already PA23 compliant to do much of the heavy lifting for them. 37% of respondents in our survey are already investing in new technology to ensure they are ready, selecting solutions that provide assurance that every step of the procurement journey is compliant with the requirements of the Act.
Winning with PA23 in 2025
There are bound to be some teething problems as organisations get to grips with the changes coming this year. But the benefits should make the trouble worthwhile.
For suppliers, PA23 opens up the procurement process, with greater transparency around opportunities with new and existing customers.
For local authorities, meeting the requirements of PA23 will have a number of benefits. It should encourage greater collaboration between departments, eliminating duplication and achieving better value for money. The Act also embraces an important shift away from the Most Economically Advantageous Tender (MEAT). Instead, it promotes procurement that focuses on the Most Advantageous Tender (MAT). This distinction will provide greater flexibility for procurement to consider suppliers and contracts on the basis of criteria beyond price. Particularly, buyers can pursue suppliers based on things like social value which may be better for their local economies.
The increased transparency will eradicate cronyism, and accusations – founded or unfounded, of unfair contract decisions that can plague leaders. It will also improve the experience and quality of service delivered to the citizens that rely on them.
The most important thing to remember is that there is still time to make preparations before the Act goes live. There are multiple resources available out there to help organisations in both public and private sector. These will enable them to focus any financial investment on implementing the most effective, compliant digital tools that will earn their keep from day one of PA23.
This new legislation has the potential to improve procurement and supplier relationships, ensuring your public sector organisation, or your business as a public sector supplier, can achieve its organisational and financial goals.
