Procurement is often seen as a technical issue concerned with process rather than policy. Put bluntly it's boring - only worthy of attention when public money is poorly managed.
But £300 billion of public money is spent annually on commissioned services. This money often goes directly to paying the wages of thousands of workers. For those of us pushing for a more equal society, procurement is definitely worthy of our attention.
Why should we care about procurement?
Public procurement is the process by which public authorities, including local authorities, purchase work, goods or services from companies. Given the huge sums of money spent on commissioned services, and the number of people employed by procured organisations, procurement provides an opportunity to address inequalities – by promoting good work and a Real Living Wage not just as nice-to-haves, but a condition of contract.
Labour shortages within the everyday economy, increasing ill health within our local communities and the adverse effects of "bad" work within our wider communities all suggest that the economy is not working as a whole, underlining the importance of this issue.
The new Procurement Act – an opportunity for change
In February 2025, the new Procurement Act 2023 came into force. The question is whether the Procurement Act 2023 will be a game changer and make a difference to local communities – or a name changer with the new law making little difference to our daily lives.
It is worth remembering that procurement is a devolved responsibility within the UK. Countries like Scotland and Wales have used their legal frameworks to create procurement systems that have the opportunity to deliver public value and be market-shaping. England, on the whole, has lagged behind the rest of the UK (including Northern Ireland).
Will the Procurement Act 2023 provide the opportunity to catch up? The National Procurement Policy Statement published last week is ambitious for the UK and sets us on the right track. It posits that public procurement is a key lever in delivering goods and services that drive sustainable economic growth and raise living standards.
Maximising public benefit
Maximising public benefit is a core principle of the new act – but critics argue that it’s sufficiently vague to be meaningless. In contrast, others would say that the definition has been kept deliberately vague to take account of local democratic policy objectives in decision-making within the procurement process.
Being optimistic, we consider that maximising public benefit is vital. Its inclusion places procurement policy within the wider policy objectives of local councils, housing associations, health authorities, and others providing public services at a time of rising inequality and poverty. Setting procurement into this broader context helps make it market-shaping - taking a traditional service to deliver wider policy social, economic, and/or environmental objectives.
The Act requires all contracting authorities to have regard to the importance of maximising public benefit. In addition, the act provides authorities with wide powers to reserve contracts for organisations addressing disability and/or disadvantage in the labour market. For example, a commissioning authority has recently published a grounds maintenance contract with the aim of ensuring that this service is provided by an organisation that will provide training, employment opportunities, and a supportive work environment for people with mental health issues. This is market shaping. The authority described this as unique. We need to make such contracts commonplace.
A new public interest test
A new public interest test will be introduced (at least for central government) for contracting authorities to assess at the outset of a process whether work should be outsourced or if it could be done more effectively and drive better value for money in-house.
This is welcome news. It could help to focus minds on the importance of commissioning and analysing the public value of what is to be commissioned and why, rather than simply repeating procurements without analysis of their public benefits.
What can we do?
If change is going to happen closed doors need to be opened, new conversations begun and new approaches adopted – not only within commissioning authorities but between commissioning authorities, civil society, social enterprises and the private sector.
We cannot leave it to central government, nor commissioning authorities alone, we have to be part of that change. We need more imagination and greater engagement from the Voluntary, Community and Social Enterprise (VCSE) sector. All of us who believe that public procurement should be delivered for public good need to take active steps to deliver it, however small.
So if we want procurement to deliver for local communities, now is the time when the hard work begins. Let’s join together to build a procurement system fit for purpose that works for the public benefit not against it. Procurement for public good. We’ll be knocking on doors and see if they open. We will keep knocking until they do.