UK Procurement Act Plot Twist: Part 2 Is Here – and It’s Focused on Growing British Industry, Jobs and Skills

Just when you thought the Procurement Act 2023 had wrapped its final scene with its commencement on 24 February 2025, the UK Government has released a surprise sequel: Part 2.

Titled “Public Procurement: Growing British Industry, Jobs and Skills – Consultation on Further Reforms”, the consultation sets out proposals aimed at strengthening economic resilience and better leveraging the UK’s £385 billion annual public procurement spend.

The timing is notable. The Procurement Act took years to develop, so a new legislative package so soon after implementation may seem unexpected. But it reflects the continued policy focus on using procurement to deliver broader economic, social, and industrial objectives.

Whether you're a contracting authority navigating implementation or an international business assessing the UK market, Part 2 is not something to scroll past. The consultation remains open until 5 September 2025, and now is the time to understand the proposals and consider whether to contribute. Bird & Bird’s team is supporting clients to analyse the reforms and prepare formal responses.

A Quick Recap – The Procurement Act 2023 and the National Procurement Policy Statement

Introduced through the 2020 Green Paper Transforming Public Procurement, the Procurement Act 2023 moved the UK away from EU-derived rules to a simplified, flexible regime.

It also shifted procurement into a tool for achieving broader public policy goals. Contracting authorities are now required to “have regard” to the National Procurement Policy Statement (NPPS), a policy document that sets the UK Government’s strategic priorities.

The latest NPPS (February 2025) highlights priorities including economic growth, energy transition, and improved access to opportunity, and this new consultation is intended to help embed those priorities in practice.

The Proposals: Overview

The consultation includes a range of reforms aimed at strengthening support for:

1. Small businesses and social enterprises

• Spend targets: “Large” contracting authorities with annual spend over £100m would be required to publish three-year SME/VCSE spend targets and report against them annually. While undefined at this stage, “large” contracting authorities may include certain councils and NHS trusts. 
• Prompt payment: Extending current central government policy, which requires suppliers to pay invoices within 60 days 95% of the time for major contracts (£5m+), beyond central government (i.e. sub-central authorities. Prompt payment could become a condition to bidding if a supplier cannot demonstrate payment of invoices within an average of 60 days, and contracting authorities will be required to provide an explanation if a supplier (who cannot demonstrate prompt payment) is not excluded.
• People-focused services: Clarification in legislation to allow certain contracts for vulnerable citizens to be awarded without a full competitive procedure to allow for decisions to be driven by the needs of vulnerable groups.

2. National capability and security

• Insourcing test: Before procuring a major service contract (£5m+), authorities would need to carry out and publish a public interest test to assess whether services could be delivered in-house to help improve in-house capability, achieve costs savings or service quality improvements, and enhance control or accountability over delivered services. Secondary legislation under the Procurement Act 2023 would require contracting authorities to publish the results of the public interest test in the tender notice.
• Ministerial powers: Powers are proposed (but not open to consultation) to designate certain goods, works or services as critical to national security, allowing use of exemptions to contract directly with trusted suppliers.

3. Local jobs, skills and social value

• Mandatory criteria: Contracting authorities would be required to include at least one award criterion related to jobs, skills, or opportunities (weighted at 10%) in all major procurements. 
• KPI reporting: At least one KPI on social value would be required in major contracts, with reporting via the contract performance notice. Where contracting authorities deem in unreasonable to set social value award criteria and KPIs, they would need to explain why in the tender notice. 
• Standardised metrics: Contracting authorities would need to use social value criteria from a streamlined national list (co-designed with the public sector and suppliers), while maintaining flexibility to define delivery locations.

Jurisdictional Scope

Currently, the proposals are intended to apply only to contracting authorities performing “reserved functions”. Devolved functions (e.g. health) are not in scope, but discussions are ongoing with the devolved governments and the position may change during the legislative process.

A Move to a More “Buy British” Regime?

At first glance, the framing of the consultation raises natural questions among international suppliers about whether the UK is moving towards a more protectionist approach.

The reality is more nuanced.

While some measures are aimed at strengthening the position of UK-based businesses when competing for government contracts (whether as lead contractor or within supply chains) the proposals are intended to operate within the UK’s existing international trade commitments (including the WTO Government Procurement Agreement and UK FTAs, which ensure equal treatment for qualifying foreign suppliers). 

Consequently, contracting authorities will remain required to provide equal access to domestic and qualifying foreign suppliers, and the lawful bases for exclusion (such as national security) remain unchanged.

Rather than limiting international access, the proposals are designed to strengthen the competitiveness of UK-based businesses and suppliers-through improved visibility, payment practices, and strategic alignment with local priorities-within the context of an open procurement regime.

Looking Ahead – Contribute to the Consultation

The consultation is open until 5 September 2025, and represents a significant opportunity for businesses, both UK and international, to help shape the next phase of UK procurement reform.

At Bird & Bird, we are supporting clients across sectors to analyse the proposed changes, assess commercial implications, and prepare consultation responses. Please get in touch if you would like to discuss how these proposals may affect your organisation or supply chain.