Procurement Act: what it is and how it will impact schools and trusts

The way in which the education sector purchases goods, works and services will be transformed from Monday 24 February, the date when the Procurement Act 2023 finally comes into force, 16 months after it received royal assent.

Ahead of the Act’s implementation date, the government last week published its revised National Procurement Policy Statement (NPPS).

Outlining the strategic priorities for public procurement, it aims to support the government’s missions and deliver value for money. It’s therefore crucial that schools and trusts get up to speed with the new procurement regime as soon as possible.

What’s in the Procurement Act?

Marking a significant departure from previous EU-derived regulations, the Procurement Act brings substantial changes to make public sector procurement across England, Wales and Northern Ireland more efficient, transparent and flexible.

It unifies various procurement regimes under a single framework, encompassing public contracts, utilities, concessions, and defence and security procurement.

The overarching principle of the Act is to ensure contracting authorities deliver value for money, maximise public benefit, act with integrity throughout a procurement exercise and continue to ensure equal treatment of bidders.

This change reflects a more UK-centric approach, with contracting authorities required to consider national policy objectives in their decision-making. These missions have now been published in the NPPS.

What is the National Procurement Policy Statement?

In the revised NPPS, the government aims to align the procurement regime with broader policy missions by better positioning UK firms in public contract competitions, supporting sustainable growth and driving up living standards.

These missions are named as kickstarting economic growth, becoming a clean energy superpower, taking back our streets, breaking down barriers to opportunity and building an NHS fit for the future.

To achieve these missions and deliver value for money, there are several strategic priorities for contracting authorities to consider in public procurement. These are:

• Driving economic growth and strengthening supply chains by giving small- and medium-sized enterprises (SMEs), and voluntary, community, and social enterprises (VCSEs) a fair chance, creating high-quality jobs and championing innovation
• Delivering social and economic value that supports the government’s missions, including by working in partnership across organisational boundaries where appropriate
• Building commercial capability by ensuring the relevant skills and standards are in place to procure and manage contracts effectively, and to collaborate with other contracting authorities to deliver the best value.

Additionally, an update to the Sourcing Playbook introduces a new public interest test for whether work should be outsourced or done in-house.

This is designed to ensure procurement processes are more effective and offer better value for money, reflecting a more strategic and measured approach.

Procurement tips for schools and academy trusts

While the new legislation will require practical updates to governance procedures, template documents and skills, the biggest transformation for contracting authorities such as schools and trusts lies in organisational culture.

One of the Act’s biggest changes is that the full contracting lifecycle, from procurement through to contract management and expiry, is now covered. For example, there is a new obligation, in most cases, to publish at least three key performance indicators (KPIs) for contracts exceeding £5 million, as well as a copy of the contract itself.

For these high-value contracts, supplier performance must be assessed annually against these metrics. This will mark a step change in the relationship between trusts and their supply chain.

Pre-market engagement with potential suppliers, in which sufficient supporting information should be shared, will ensure realistic KPIs are set and help reduce the risk of derailing the procurement at a later stage.

As suppliers that repeatedly fail to hit KPIs could be excluded from future procurements and even put on a central debarment list, bringing negative reputational and commercial consequences, it’s crucial to work together in identifying problems before they materialise.

Finally, with disagreements over performance-related issues potentially more likely, schools and trusts should also mitigate against this by keeping adequate records throughout a procurement process and during the term of the resulting contract.

Bradley Martin is a partner specialising in public procurement at UK and Ireland law firm Browne Jacobson

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