Procurement in a Nutshell: Procurement Act 2023 – National Procurement Policy Statement
13th June, 2024
This Nutshell will detail the impact and scope of the National Procurement Policy Statement which contracting authorities ought to be aware of.
On 26th October 2023 the Procurement Bill received Royal Assent and is now expected to come into force on 28th October 2024.
The Act will, in particular, revoke the following:
- Public Contracts Regulations 2015 (PCR)
- Concession Contracts Regulations 2016
- Utilities Contracts Regulations 2016
Key points
The National Procurement Policy Statement sets out the strategic priorities for public procurement and how contracting authorities can support their delivery.
The statement will come into effect on 28th October 2024 alongside the introduction of the new Procurement Act 2023. All contracting authorities must have regard to this statement as mandated by Section 13 of the Procurement Act.
While a breach of this duty will not be actionable under the PA 2023 (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.
The national priorities are as follows:
- Value for Money
- Social Value
- Small and Medium-Sized Enterprises
- Commercial and Procurement Delivery
- Skills and Capability for Procurement
Value for Money
The NPPS stresses that contracting authorities must place value for money at the forefront of all procurement activities. This requires contracting authorities to optimise the use of public funds by balancing effectiveness and efficiency throughout the provision of the product, service or works to achieve the intended outcomes of the procurement.
Social Value
For social value, the NPPS states that all contracting authorities should have regard to the following outcomes in their procurement activities, alongside any additional local priorities, where it is relevant to the subject matter of the contract and proportionate to do so:
- Creating resilient businesses and opportunities for quality employment and skills development.
- Improving innovation, supply chain resilience and security of supply.
- Tackling climate change and reducing waste.
However, the statement does make clear that contracting authorities should not place onerous requirements on suppliers.
SMEs
The NPPS stresses the importance of expanding procurement opportunities to SMEs to secure economic growth and the innovative delivery of services.
Commercial Delivery
With regards to commercial and procurement delivery, the statement makes clear that contracting authorities should consider whether they have the right operational policies and processes in place to manage the key stages of commercial delivery.
Skills and Capability
Under skills and capability, contracting authorities should consider their organisational capability and workforce plans, as well as the resources required to deliver value for money
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.
It should also be noted that the national priorities in the NPPS are separate to the objectives set out in Section 12 of the Act. For a detailed review of the objectives under the Act, please see our Nutshell.
For further information please contact Melanie Pears or Tim Care in our Public Sector Team
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
This page may contain links that direct you to third party websites. We have no control over and are not responsible for the content, use by you or availability of those third party websites, for any products or services you buy through those sites or for the treatment of any personal information you provide to the third party.
