New Bill will shape public sector purchasing for a generation

Amidst a flurry of new legislation announced in the Queen’s Speech in May 2022, the Procurement Bill may have slipped under the radar of many UK businesses. Yet this 122-page piece of legislation – that sets out rules for how government buys goods and services from businesses – is a once in a generation piece of regulation.

Whether an SME or an international conglomerate, if your business has contracts with the public sector – or would like to – understanding this Bill is vital.

The CBI has been involved since the outset in the creation of this Bill, including a response to the Green Paper consultation in 2021, and will continue to be a valued partner to the Cabinet Office going forward.

The highlights for the business community

Various efforts to simplify public procurement outlined in the Bill, including the reduction in the number of procedures and an emphasis on user friendly language, will help businesses of all sizes to bid for government contracts.

Many businesses have found the current process confusing and unnecessarily burdensome, with the result that new market entrants often refrain from bidding. Supporting SME’s and new entrants has been a key ambition for this government, and the Bill will help encourage these firms to get involved.

Similarly, the introduction of a new ‘flexible’ procedure has the potential to support greater dialogue between suppliers and public bodies. One of the largest issues with the current interpretation of procurement rules is that many public bodies are afraid to discuss with suppliers for fear of legal challenges later on during the procurement process. This can lead to prescriptive procurements which fail to tap into the most appropriate or latest innovations in goods and services.

A new digital platform proposed will deliver a significant reduction in the paperwork required for suppliers – a tell-us-once approach for basic company information will mean suppliers will no longer have to repeatedly fill out the same information for every tender, whilst also increasing the transparency of public contract opportunities.

Where business would welcome further changes

Government has issued a lot of documents explaining how public bodies should work with business. Yet the Bill fails to link the big rule changes to these guidance and best practice pieces. For instance, the Construction Playbook is a key component of public procurement but the relationship with the regulatory reforms is still unclear.

There’s also uncertainty about how key barriers to innovation like intellectual property and risk management will be addressed by the changes. Innovative products and solutions can often provide significant benefits to public bodies but often take much longer to be pulled-through to the frontline compared to business-to-business contracts – focusing on innovation can deliver improved outcomes, but the Bill feels light on how innovation could be supported and encouraged.

Finally, the perspective of the Procurement Bill is still very much focused on transactions rather than partnerships, and the language of the Bill treats businesses and public bodies as adversaries rather than collaborators.

Next steps and timeframes

The CBI will continue to update members on the Bill at key intervals, including through events, but for all the latest updates, visit the cabinet office’s Transforming Public Procurement page.

We would invite members to reach out with any thoughts, suggestions, and feedback on the Bill to ensure we can feed it into policy makers.

You can share your business insight, thoughts or any feedback on the Bill by speaking to Joshua.