The Procurement Act 2023 – implications for NHS procurement

The Procurement Act 2023 is poised to transform the NHS’s procurement landscape.

Implemented on 24 February 2025 – after a four month delay – the new legislation has some noble goals, including streamline processes, enhancing transparency, and foster greater inclusivity in public sector contracting.

But what, exactly, will change? And how?

1. Simplified Procurement Procedures.
   The Act consolidates existing competitive procurement pathways into two:

• Open Procedure: A single-stage process suitable for straightforward procurements.
• Competitive Flexible Procedure: A more adaptable, multi-stage approach allowing contracting authorities to design procurement processes tailored to meet specific needs.

For the NHS, the flexibility offered by the competitive flexible procedure encourages a lot more market engagement and enables procurement teams to engage more actively with stakeholders, including suppliers, patients and service users, encouraging innovative solutions that align with healthcare objectives.

2. A Central Digital Platform. From 24 February, a new digital platform will be established for suppliers to register and access procurement opportunities across the public sector. The central digital platform is an enhancement of the existing “Find A Tender” service, which suppliers are already familiar with, and aims to reduce duplication and errors, making it easier for suppliers to participate in tenders. Registering on the central digital platform will be mandatory for suppliers seeking to tender for NHS (and wider public sector) contracts. Suppliers will have to use the central digital platform to register, input and then share their commonly-used information as part of the procurement.
3. Emphasis on Social Value. The Act places greater importance on “social value” in procurement decisions, encouraging buyers to consider factors such as community benefits, environmental impact, sustainability, and support for small and medium-sized enterprises (SMEs) when awarding contracts.
4. Enhanced Transparency and Accountability. The Act aims to create a more transparent and inclusive procurement process. This not only includes publishing pipeline and tender notices for opportunities over certain thresholds on the central digital platform; it also requires buyers to publish notices when a contract is modified or terminated. Three Key Performance Indicators (KPIs) will need to be published for all contracts over £5 million; performance against these KPIs will monitored and reported at least annually through the new transparency notice requirements.
5. Support for SMEs and Social Enterprises. By simplifying processes and reducing barriers, the Act includes measures to encourage participation from a more diverse range of suppliers, including SMEs and social enterprises, making it easier for them to compete for contracts and thus encouraging innovation and economic growth.

Implications for NHS Procurement

The introduction of the Procurement Act 2023 represents a significant shift in how the NHS will approach procurement:

• Preparation and Training: NHS procurement professionals will need to familiarise themselves with the new procedures and central digital platform. Engaging in training and development will be crucial to ensure compliance and to leverage the benefits of the reformed system.All NHS SBS procurement colleagues have completed both the relevant e-learning from the Cabinet Office and had additional external legal training, enabling them not only to navigate the new Act confidently, but also to provide advice and guidance to our customers. This will be supported by ongoing learning and development.
• Supplier and User Engagement: With an emphasis on social value and inclusivity, the NHS will be encouraged to collaborate with a broader range of suppliers and users. This can lead to more diverse and innovative solutions that better meet the needs of patients and communities.
• Policy Alignment: The NHS will need to align its procurement strategies with the broader objectives of the Act, such as promoting sustainability and supporting economic growth within local communities. This alignment will not only ensure compliance but also enhance the overall impact of NHS procurement activities.
• Drive Innovation: The Act aims to foster innovation by allowing for more flexible and creative approaches to procurement.

The Act is accompanied by a new National Procurement Policy Statement, which sets out the strategic priorities for public procurement and what contracting authorities need to do to support these. No less than sixteen new Procurement Police Notes (PPN) have also been published within the past month, aimed at procurements commenced on or after 24 February 2025. These PPNs cover topics like SME/VCSE spending targets, social value, below-threshold procurement reservations, modern slavery and AI in procurement, and are available on GOV.UK.

Most PPNs simply update existing guidance with the new terminology from the 2023 Act and 2024 Regulations. However, PPN 001 (SME and VCSE spending targets) and PPN 002 (Social value in contract awards) introduce new policy elements aligned with the National Procurement Policy Statement and government priorities.

Conclusion

The Procurement Act 2023 sets a blueprint for procurement within the NHS for at least the next decade. It is not without risks – the interpretation of various parts of the Act varies, which is likely to lead to precedent being set by legal challenges, and some of the changes within the Act are significant. The Act will open up new opportunities for SMEs/VCSEs with a more flexible approach to procurement processes together with a much greater emphasis on contract management. Whilst the Act will be biggest shake up for procurement laws for some time, it does not apply retrospectively, meaning that you can continue to call-off from framework agreements established under the previous Public Contract Regulations. In short, it is a real opportunity for transformation of NHS procurement.

If you’re ready to jump right in, you can register for the Central Digital Platform immediately.  If you need some more information to help you navigate the new Procurement Act, please visit the Procurement Regulations area of our website.

Alternatively, our team of experts can work with you to deliver training sessions tailored to your organisation’s needs, including:

• An introduction to the Procurement Act 2023 and key changes
• A walk through and explanation of the transparency notices
• A focus on key issues that may occur