This week, the UK will enact the most significant update to its procurement regulations in 30 years. Confirmed in September 2024, the Procurement Act 2023 (PA23) is a sweeping series of regulatory changes aiming to condense and simplify complex government procurement procedures, with the end goal of making it easier for small and medium sized businesses in the UK to compete with large scale enterprises for the £400 billion spent by the government each year on essential goods and services.
UK business leaders are hailing the legislation as a victory for small businesses, transparency in government procurement, and a more equitable UK economy.
Steve Haskew, Group Director of Sustainability and Growth at Circular Computing, called PA23 a “win for Davids over the Goliaths of the business world.” He added that: “This long-awaited legislation should make the procurement process more transparent, slam the door on ‘chumocracy’ and clear the way for smaller companies to partner with the public sector.”
PA23: Big for (small) business
In essence the PA23 has four main objectives: making the public purchasing system simpler and more flexible; allowing for small businesses and social enterprises to more easily compete for public procurement contracts; preventing underperforming suppliers from keeping contracts unfairly; and making the government’s entire commercial lifecycle more transparent.
According to the Government, the PA23 will help thousands of small businesses across the country get the chance to win valuable contracts with public sector organisations.
“Greater flexibility around tendering and faster payments for suppliers will be a huge fillip to the UK’s SMEs and help level the playing field when it comes to contract pitching. Allowing more businesses to throw their hat into the ring for public sector projects will also improve the quality of winning bids, ensure better value for money and allow more specialists to shine,” added Haskew.
Doing so could be a major help towards kickstarting local economic growth and innovation and creating jobs for local communities in the UK, where communities (especially those outside London) face stagnant wages, rising rents, and an increasingly untenable cost of living.
“Businesses tell me that the current system isn’t working. It is slow, complicated and too often means small businesses in this country are shut out of public sector contracts,” said Georgia Gould, Parliamentary Secretary at the Cabinet Office. “These measures will change that, 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.”
