05 August 2025
The UK government recently introduced significant changes to the public sector procurement process through the Procurement Act 2023. These changes aim to streamline procurement, enhance transparency, and provide greater opportunities for small and medium-sized enterprises (SMEs). Here’s everything you need to know about the new regulations, and what they might mean for your own business.
What is the Procurement Act 2023?
The Procurement Act 2023 represents a comprehensive overhaul of the public procurement rules in the UK. It consolidates multiple regulations into a single, simplified framework designed to make the procurement process more efficient and accessible. The Act came into force on 24 February 2025 and introduces several key changes aimed at driving growth, ensuring value for money, and increasing transparency.
1. Simplified Procurement Process
The Act replaces the previous complex procedures with two main types: Open and Competitive Flexible. This simplification aims to make it easier for businesses to understand and participate in the procurement process, which has historically been time-intensive and easy to get wrong.
2. Greater Opportunities for SMEs
One of the primary goals of the new Act is to open up public contracts to SMEs and social enterprises. The Act mandates that public bodies consider the barriers faced by these smaller entities and take steps to overcome them. This includes simplifying the bidding process and ensuring fair access to opportunities – which in short, means that SMEs could find it much easier to compete with larger organisations, and secure contracts from a wider array of customers.
3. Enhanced Transparency
The Act introduces a Central Digital Platform where all procurement data will be published in a standard, open format. This platform allows the public to scrutinize procurement decisions, ensuring greater accountability and transparency throughout the procurement lifecycle.
4. Stronger Exclusion Powers
Public bodies now have stronger powers to exclude and debar suppliers on grounds of national security or poor performance. This ensures that only reliable and trustworthy suppliers are awarded public contracts.
5. Faster Payment Terms
To support SMEs, the Act mandates 30-day payment terms for all public sector contracts. This change aims to improve cash flow for smaller businesses and reduce the risk of late payments.
Focus on Energy
The Procurement Act 2023 places a strong emphasis on sustainable energy practices. Public sector clients are now required to consider the environmental impact of their procurement decisions, including energy efficiency and renewable energy adoption. This shift aims to promote sustainability and reduce carbon emissions across public sector projects.
Energy Efficiency Requirements
Public sector contracts now include specific criteria for energy efficiency. Suppliers must demonstrate how their solutions will reduce energy consumption and improve efficiency. This includes the use of energy-efficient technologies and practices that align with the government's sustainability goals.
Renewable Energy Adoption
The Act encourages the adoption of renewable energy sources in public sector projects. Suppliers are incentivised to propose solutions that incorporate solar, wind, and other renewable energy technologies. This not only supports the transition to a low-carbon economy but also helps public sector clients meet their sustainability targets.
Focus on Social Value
The Procurement Act 2023 significantly strengthens the role of social value in procurement decisions. Social value refers to the additional benefits that a project brings to society, beyond its primary purpose. This includes community development, environmental sustainability, and economic growth.
Social Value Requirements
All public contracts in England and Wales are now required to have a minimum of 10% weighting for social value. This means that tenders are evaluated not only on their price but also on their social impact. Contracting authorities may apply a higher weighting depending on the specific procurement and its potential social impact.
Most Advantageous Tender (MAT)
The Act changes the assessment of bids from 'most economically advantageous tender' (MEAT) to 'most advantageous tender' (MAT). This approach ensures that tenders are considered based on their overall value to society, including social and environmental benefits.
At SEFE Energy, we understand the complexities of navigating new regulations and the importance of staying compliant. Here’s how we can support your business in adapting to the changes brought by the Procurement Act 2023:
Specialist Guidance and Support
Our team of specialists can provide guidance on the new procurement procedures and help you understand how these changes impact your business.
Energy Solutions
We offer comprehensive energy solutions that can help you address the sustainability criteria often required in public sector contracts. From guidance on energy audits to implementing energy-efficiency practices, we can support your efforts to reduce your carbon footprint and enhance your competitive edge.
Carbon Offsetting
SEFE Energy provides carbon offsetting solutions that allow businesses to compensate for their emissions as part of a wider decarbonisation strategy – but not all carbon offsets are created equal. By purchasing carbon credits from accredited projects, such as those offered by SEFE Energy, you can demonstrate your commitment to meeting environmental standards set by public sector contracts.
The Procurement Act 2023 represents a significant shift in the UK’s public procurement landscape, offering new opportunities and challenges for businesses. By understanding these changes, your business can successfully navigate the new regulations and thrive in the public sector market - and with over 10 years of experience, the SEFE Energy team are on hand to support.
If you would like to discuss in more detail how SEFE Energy can support your business, get in touch now.