Are you ready for reforms to procurement?

The government is in the process of reforming the UK’s public procurement regime under the Procurement Act.

New procurement law will focus on delivering value for money, maximising public benefit, removing and reducing barriers to SMEs sharing information about policies and decision-making, as well as acting, and being seen to act, with integrity. In addition, contracting authorities will have to comply with the government’s strategic procurement priorities such as climate change and sustainability, improving supplier diversity, and innovation.

The Cabinet Office has asked me to be a single point of contact for the social housing sector in relation to a learning and development package that it’s preparing to support the sector to get ready for the new legislation.

Trying to connect with every procurement lead in the sector has been a challenge, with evenings spent looking through LinkedIn and Google to identify relevant colleagues. With the exception of some regional groups of housing associations working together, procurement teams across the sector do not have one voice. In essence, the fundamental responsibility of my role is to monitor and encourage uptake of the Cabinet Office’s learning and development package.

Returning to the changes in legislation, current procurement law comes almost entirely from the European Union (EU), with the right for one business to trade across the EU, transparency of opportunities, and fairness between competitors being key themes. The government believes we now need a progressive, modern regime which can adapt to the fast moving environment in which business operates.

The new Act is likely to commence in late 2023 or early 2024 and despite the hopes of some that housing associations will be excluded, they have been included in its coverage schedules under the Government Procurement Agreement, and there is no clear sign yet of an intention to exclude them.

The extended number of procurement procedures will be reduced to just two, with a standard open procedure and a competitive flexible procedure. This latter procedure is seen by procurement leads as the major benefit of the new Act, allowing more commercial aspects to be included, particularly negotiation.

However, there are still questions about new requirements for transparency. We all agree that transparency is a good thing, but the level of transparency, the bureaucracy required to deliver it, and the actual benefit to both contracting authorities and bidders alike is unclear.

The most significant change in the whole Act and something that all housing associations should be aware of is the creation of a Procurement Review Unit in the Cabinet Office that will be able to audit authorities’ compliance with procurement law. The risk of a challenge has previously been via the EU Parliament or via a supplier. This new unit is much closer to home and will be able to audit compliance even if a challenge is not made by a supplier.

Executive teams and boards will need to support their procurement teams in the transition to the Act, allow them to lead the transition, take advantage of the Cabinet Office’s training programme, and support them should there be any changes in resources required.

Finally, the procurement teams have a key role to play in the future success of our sector, whether that be delivering value for money and social value, supporting innovation and sustainability, embracing SMEs, and ensuring compliance to the new regulations.

The sector is taking steps to come together to understand the new Act and the implications for their organisations. If you’d like to know more about the new procurement regime, and the Cabinet Office’s learning and development package, please do get in touch with me.