How the UK's Procurement Act 2023 will reshape Procurement

The UK's Procurement Act 2023 marks a significant shift in the public procurement landscape, and the Cabinet Office has informally announced that it is "working towards a go-live date" of Monday 28 October 2024 for the Act to come into force.

According to the UK government, the new bill will aim to “reform the UK’s public procurement regime, making it quicker, simpler, more transparent and better able to meet the UK’s needs while remaining compliant with our international obligations”.

With a substantial annual budget of £300 billion at stake, the Act aims to modernise, simplify and bring transparency to the procurement process. This transformation presents both opportunities and challenges for procurement departments across the UK.

Consolidation and simplification

The Act’s consolidation of over 350 procurement regulations into a single framework promises a more streamlined process. Procurement departments must adapt to this unified system, requiring a comprehensive understanding of the new rules and procedures. This change will reduce the administrative burden and allow for a more focused approach to procurement.

Leveraging a central digital platform

Utilising a central digital platform for supplier registration and bid management is going to be a game-changer. Procurement teams must become proficient in utilising such platforms to maximise efficiency and tap into a broader supplier base. This digital shift necessitates upskilling and potential restructuring within departments to handle the digital-first approach.

New principles and objectives

The Act emphasises value for money, public benefit and integrity. Procurement departments must revise their criteria and processes to align with these principles. This entails a more holistic evaluation of bids, considering not just cost, but also the broader impact and ethical standards of suppliers. This is where supplier management and qualification is key.

Navigating the competitive flexible procedure

The introduction of the competitive flexible procedure offers more flexibility but also demands a higher level of strategic thinking. Procurement professionals need to design tailored tendering processes that best suit their specific needs. This change will require enhanced market analysis skills and creative procurement strategies.

Managing supplier relationships and risks

With stricter criteria for supplier exclusion and a focus on national security risks, Procurement departments must intensify their due diligence. Implementing robust supplier assessment frameworks and staying vigilant about potential risks becomes paramount. This shift will likely necessitate closer collaboration with legal and compliance teams.

Enhancing post-award contract management

The Act extends procurement responsibilities beyond the awarding of contracts. Ensuring timely payments and monitoring supplier performance will require more rigorous contract management practices. Procurement teams should invest in contract management tools and training to meet these new requirements effectively.

Utilising eInvoicing

It’s widely recognised that a joined-up approach to strategic procurement is the smart thing to do, with Finance and Procurement working closely together at a strategic level, leading to more efficiencies, deeper insights and better processes. The importance of this collaboration is clear throughout the Procurement Act which highlights the use of electronic invoicing as a key element to strategic procurement; covering topics such as the amount of information required, accuracy of data, validity of invoice, speed of payment and electronic invoicing compliance.

Using eInvoicing can reduce human errors in aspects such as data entry and improve supplier relationships by enabling suppliers to track their invoices, all the way through to payment authorisation. Manual processing is a thing of the past as the use of technology can turn a wide range of paper and electronic formats into system-ready electronic data automatically, contributing towards the Government's requirement to move towards a more sustainable future.

Are you prepared?

To prepare for these changes, there are a number of steps that Procurement departments should consider:

Train staff: Specialised training sessions will familiarise staff with the new procurement framework and digital tools are essential.
Revise policies and procedures: Updating internal procurement policies to align with the Act’s requirements will be crucial.
Enhance supplier engagement: Building stronger relationships with suppliers, especially SMEs, will be beneficial for all involved.
Invest in technology: Leveraging technology for better procurement process management and data analysis will be key.
Collaborate: Working closely with other departments like legal, finance, and IT will help to navigate the new procurement landscape successfully.

Conclusion

The UK’s Procurement Act is a landmark reform that requires a strategic and proactive response from Procurement departments. By embracing these changes and preparing adequately, both Procurement and Finance teams can not only comply with the new regulations, but also drive greater value and efficiency in their operations. This is a unique opportunity to redefine public procurement in the UK, making it more transparent, efficient and inclusive.

Proactis has supported the practice of strategic procurement for over 25 years and is perfectly positioned to enable organisations to satisfy the requirements of the Act and help them transform as necessary according to the changes. Our Sourcing, SRM, Contract Management and eInvoicing expertise means we are the ideal partner, and we are in regular communication with the Cabinet Office, with whom we have a long-standing relationship, to ensure alignment to the Act.

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On Friday 7 June, our CEO, Stephen Line, and UK Public Sector Sales Director, Debs Jones, visited London for a meeting with key members of the Cabinet office, including:

Gareth Rhys Williams - the Government's Chief Commercial Officer
John Coyne - Director Commercial & Procurement at the Welsh Government
David Nicholson - Head of Commercial & Procurement at the Welsh Government
Ivana Gordon - Director, GCG Services, overseeing the Procurement Act project from a digital point of view

The aim of the meeting was to discuss how together we drive UK Economic Growth, Grow Skills and Embrace Innovation. As you would expect, the delivery of the Procurement Act 2023 was a key element of the conversation.

As Stephen Line explains:

"As a UK headquartered leading Source-to-Pay provider with a large and growing customer base in the Public Sector, it was great to have the opportunity to sit down with Gareth, John, Ivana and David. Understanding the future vision of UK Government allows us to plan our development in a thoughtful way that continues to meet the needs of the UK Public Sector. The Procurement Act was one of a number of themes discussed, with the meeting also enabling us to provide feedback on what we hear from our customers and outline how we believe we could accelerate elements of the vision and deliver incremental value to our customers. Our next technical meeting is scheduled for 13 June as we collaborate even more closely to support realising the exciting potential of what's ahead."

Look out for further updates on our communications with the Cabinet Office.

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