Stop press! Two procurement updates in one

It’s been an exciting week in the procurement world – with not one but two significant updates to how the public sector procures goods and services.

Firstly, the long-awaited Procurement Act 2023 is now on the statute books after receiving Royal Assent last Thursday. Secondly, we have some new financial thresholds for procurement, which will apply from 1 January 2024.

Procurement Act 2023

We now say goodbye to our old friend Procurement Bill after almost 18 months of Parliamentary debate and scrutiny and hello to the Procurement Act 2023. This is now the primary legislation which the Cabinet Office tells us will come into force in October 2024, with the commencement date to be confirmed.

To access a full copy of the Procurement Act 2023 in its current form, click here.

The Procurement Act 2023 leaves much detail to secondary legislation in the form of Regulations, of which we currently only have drafts. You can access the drafts here, and we expect that these will be laid before Parliament in early 2024.

Look out for our series of Procurement Act e-updates coming soon, alongside dates for our Procurement Act seminars. We also offer bespoke training for your organisation on how the new regime will impact you. Please get in touch if you wish to discuss.

New financial thresholds

The Public Procurement (Agreement on Government Procurement) (Thresholds) (Amendment) Regulations 2023 will apply from 1 January 2024 and give us new financial thresholds, which have changed only slightly from the existing thresholds which have been in place for the last two years.

Fans of the procurement regime will recall that at the start of 2022, we were provided with financial thresholds, which were inclusive of VAT for the first time. This was to bring the regime in line with the World Trade Organisation’s Government Procurement Agreement (WTO GPA) following Brexit.

The values are again inclusive of VAT, but we have included a column in the table below with a ready-reckoner providing an indicative net value on the assumption that VAT applies to the contract in question at a rate of 20%. Some contracts will not, of course, attract VAT.

Public sector

Supplies & Services

Supplies & Services (Central Government)

Works

Light Touch/Social and other Specific Services*

Utilities

Supplies & Services

Works

Utilities & Public Sector

Concessions

*Light touch /SOS threshold remains unamended

For more information, please get in touch with Alison Walton at 0191 211 7850, or [email protected], or your usual Muckle contact.