Procurement in a Nutshell – Procurement Act 2023: National Procurement Policy Statement

The previous NPPS was withdrawn by the Labour Government in September 2024. The revised NPPS comes into effect on 24th February 2025, when the Procurement Act 2023 (the Act) substantively commences.

What this Nutshell covers

This Nutshell will review the revised NPPS, detailing its impact and scope which contracting authorities ought to be aware of.

Obligations on contracting authorities

The NPPS sets out the strategic priorities for public procurement and how contracting authorities can support their delivery.

All contracting authorities must have regard to the NPPS as mandated by Section 13 of the Act.

While a breach of section 13 will not be actionable under the Act (as outlined in section 100(5)), a contracting authority may be held accountable for a breach through judicial review proceedings and, if it commits systemic breaches, could create grounds for an investigation under Part 10.

National priorities

The new NPPS emphasises the importance of delivering value for money, and focuses on the following priorities:

• Driving economic growth by maximising procurement spend with small and medium-sized enterprises (SMEs);
• Delivering social and economic value; and
• Building commercial capability to deliver value for money.

Economic Growth

Contracting authorities should drive economic growth by affording SMEs a fair chance at public contracts, which according to the NPPS, will create high quality jobs and champion innovation

Social and Economic Value

Contracting authorities must have regard to the importance of maximising public benefit by applying social and economic value requirements throughout the commercial lifecycle of a procurement.

The NPPS states that the ‘Government expects the highest standards of integrity, ethical conduct and environmental sustainability in business practices from suppliers delivering public contracts’.

Contracting authorities should ensure their suppliers are actively working to tackle (among others) corruption, modern slavery and environmental issues.

Commercial Capability

Contracting authorities should ensure they maintain efficient and effective policies and processes to manage commercial delivery. Further, the individuals undertaking the procurement and managing the contract should have the right level of capability, skills and expertise to make informed decisions.

The NPPS also emphasises the importance of partnership and collaboration across organisations and sectors.

What does this mean?

The statutory duty “to have regard to” the NPPS means that contracting authorities must consider, when undertaking a procurement, whether they can achieve one or more of the ‘national priorities’ in a manner that is proportionate and relevant, and work to implement this where possible. It is not an absolute obligation to incorporate such national priorities into a procurement, however it is advised that contracting authorities document their rationale if they are to be excluded.

For further information please contact Melanie Pears or Tim Care in our Public Sector Team.