A professional’s guide to the Procurement Act 2023. We explore the new legislation and offer a FREE COPY of our 50-page Procurement Act Handbook (published 2025). Expert guidance and checklists!

In this extract of the ESG Pro Procurement Act Handbook, we consider how the Procurement Act 2023 represents a major overhaul of the UK’s public procurement regulations, introducing a simplified and more transparent framework for awarding public sector contracts. Designed to replace legacy EU-derived procurement laws, the Act aims to improve efficiency, encourage fair competition, and embed Social Value as a core consideration in procurement decisions.

Key Objectives of the Procurement Act

The Act is underpinned by several key objectives:

1. Simplification and Standardisation – Streamlining procurement processes to make them more accessible for suppliers, especially SMEs and social enterprises.
2. Increased Transparency– Enhancing data sharing and public accountability to prevent unfair or opaque procurement practices.
3. Social Value Integration– Embedding sustainability, ethical sourcing, and community benefits into procurement decisions.
4. Improved Supplier Engagement– Encouraging a more competitive and diverse supply chain that supports innovation and economic resilience.
5. Alignment with Government Priorities– Supporting policies such as net-zero commitments, local economic development, and ethical business practices.

Why the Procurement Act Matters

The Procurement Act (2023) is a critical piece of legislation that affects businesses of all sizes bidding for public sector contracts. It sets out new expectations for suppliers to demonstrate not just cost-effectiveness but also social and environmental contributions. Compliance is now essential for securing public contracts, making it vital for organisations to understand and integrate these new requirements into their procurement strategies.

Procurement Act 2023 Readiness Checklist: Initial Steps

To prepare for compliance with the Procurement Act (2023), businesses should take the following steps:

	Familiarise themselves with the key changes in procurement regulations.
	Review existing procurement policies and align them with the new requirements.
	Identify areas where Social Value can be demonstrated and measured.
	Develop internal reporting systems to track compliance and performance.
	Engage with procurement professionals and stakeholders to understand the impact of the new law.

The Legal and Regulatory Landscape

Background and Rationale for the Procurement Act (2023)

The introduction of the Procurement Act (2023) represents one of the most significant reforms in UK public sector procurement in decades. Historically, the UK’s procurement laws were shaped by European Union directives, ensuring competition and fairness in the awarding of public contracts. While these regulations served their purpose, they were often criticised for being overly complex, bureaucratic, and inflexible.

Following Brexit, the UK government identified an opportunity to tailor procurement laws to better reflect national priorities. This included fostering a more competitive and diverse supplier market, integrating Social Value considerations, and reducing the administrative burdens that had historically discouraged smaller businesses from engaging in public tenders. By replacing the fragmented system of procurement regulations with a single, cohesive framework, the Procurement Act (2023) seeks to create a more accessible and strategic approach to public contracting.

Furthermore, high-profile procurement failures during the COVID-19 pandemic highlighted the inefficiencies of the existing system. Issues such as limited supplier diversity, lack of transparency in contract awards, and concerns about accountability underscored the need for reform. The government responded with a framework that aims to increase public confidence in procurement processes, ensure better value for taxpayers, and encourage innovation and sustainability in public contracts.

Alignment with UK Public Procurement Regulations

The Procurement Act (2023) replaces multiple existing regulations, consolidating them into a streamlined and more efficient framework. The legislation absorbs and refines elements from the following:

1. The Public Contracts Regulations 2015
2. The Utilities Contracts Regulations 2016
3. The Concessions Contracts Regulations 2016
4. The Defence and Security Public Contracts Regulations 2011

One of the most significant changes is the replacement of the Most Economically Advantageous Tender (M.E.A.T.) evaluation principle with the Most Advantageous Tender (M.A.T.) framework. This shift ensures that procurement decisions are not solely based on cost considerations but also take into account broader economic, social, and environmental benefits. The move towards M.A.T. aligns UK procurement policy with modern best practices in sustainable and responsible business.

Another notable alignment within the Act is the integration of Social Value requirements, mirroring initiatives such as the NHS Evergreen Supplier Assessment. Public sector buyers are now mandated to consider factors such as job creation, skills development, carbon reduction, and supplier diversity in procurement decisions. This codifies the Social Value policies outlined in Procurement Policy Note (PPN) 06/20, making these considerations a legal requirement rather than a voluntary best practice.

Key Legal Principles and Compliance Requirements

To ensure fairness, efficiency, and strategic outcomes, the Procurement Act (2023) is built upon key legal principles that apply to all public sector procurement processes:

1. Transparency: All procurement opportunities and awarded contracts must be made publicly available to prevent opacity in decision-making.
2. Non-discrimination: Suppliers, regardless of their size, location, or ownership, must be given fair and equal opportunities to bid for public contracts.
3. Value for Money: Procurement decisions must go beyond cost efficiency and take into account broader economic, environmental, and social benefits.
4. Proportionality: Procurement requirements should not place undue burdens on suppliers, particularly SMEs and social enterprises.
5. Integrity and Anti-CorruptionMeasures: Strengthened controls and oversight mechanisms must be in place to prevent fraud and ensure ethical procurement practices.

By embedding these principles within the Procurement Act (2023), the government aims to create a fairer, more accountable, and results-driven procurement system.

Transition from EU Procurement Rules

Under previous EU regulations, procurement processes were rigid and often hindered by excessive red tape. The Procurement Act (2023) introduces several fundamental changes to improve flexibility and responsiveness:

• A single regulatory framework replacing multiple overlapping directives.
• Greater supplier engagement, including pre-market engagement with SMEs and social enterprises.
• Improved data transparency, with open-access contract registers to enhance public accountability.
• More flexible contract award procedures, allowing authorities to better consider innovation and sustainability

This transition is expected to create more dynamic procurement practices, making it easier for businesses to engage with public sector opportunities while maintaining high standards of governance and accountability.

Role of Government and Regulatory Bodies

Several government bodies oversee the enforcement and implementation of the Procurement Act (2023):

• The Cabinet Office: Leads on procurement policy and regulatory compliance.
• The Competition and Markets Authority(CMA): Monitors anti-competitive behaviour and investigates procurement fraud.
• Sector-Specific Regulators: Ensures compliance across NHSprocurement, local government, and defence contracting.

The presence of these regulatory bodies ensures that the new framework is properly implemented, and that non-compliance is addressed promptly.

Summary

The Procurement Act 2023 introduces sweeping reforms that seek to create a procurement system that is fairer, more transparent, and more aligned with national strategic priorities. By simplifying regulations, embedding Social Value principles, and enhancing supplier engagement, the Act provides a more accessible and effective procurement environment for businesses of all sizes.

Understanding the legal and regulatory landscape is essential for businesses looking to secure public sector contracts under the new framework. In the next section, we will explore how businesses can effectively navigate the competitive procurement process and position themselves for success.