New Act and New Thresholds - Procurement Update

By Katherine Calder, and Holly Eastwood

Published 08 November 2023

Overview

The Procurement Act 2023 (formerly the Procurement Bill) (the "Procurement Act") received Royal Assent on the 26 October 2023. However, contracting authorities should note that the Procurement Act is not expected to come into force until October 2024 and the Government has advised that a six-month notice period will be provided prior to commencement. If this is the case, and assuming the predicted timeline is correct, contracting authorities can expect notice towards the end of April 2024.

26 October 2023 also marked the publication of The Public Procurement (Agreement on Government Procurement) (Thresholds) (Amendment) Regulations 2023 (the "Regulations"), following a scheduled review of the current thresholds. Unlike the Procurement Act, the Regulations will come into force relatively soon, on the 1 January 2024. The Regulations will update and slightly increase the financial thresholds set out in the Public Contracts Regulations 2015, the Concession Contracts Regulations 2016, and the Utilities Contracts Regulations 2016.

Contracting authorities should note that the Regulations will not affect any procurement that has commenced prior to 1 January 2024, due to the Regulations' transitionary provisions. Nevertheless, contracting authorities should be aware of the threshold changes to ensure they are able to correctly identify which contracts will be subject to certain procurement rules once the Regulations come into force.

Current financial thresholds vs the new financial thresholds

Public Contracts Regulations 2015:

#BBD0E0 »

*Central Government bodies:**
Contract type	Threshold until 31 December 2023 (inclusive of VAT)	Threshold from 1 January 2024 (inclusive of VAT)
Supply Contracts	£138,760	£139,688
Services Contracts	£138,760	£139,688