How your London business can benefit from the new Procurement Act
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Posted: Thu 13th Mar 2025
The Procurement Act 2023 – which became law on 24 February 2025 – aims to help small and medium-sized enterprises (SMEs) access public sector contracts.
The UK's public sector spent more than £400 billion on goods and services in 2023/2024. On top of that, the Greater London Authority Group spends around £9.5 billion a year.
With these numbers, you can see how winning public sector contracts can drive growth for your London business.
But despite this huge spending, smaller companies often find it hard to bid for contracts (known as "tenders").
In some cases, it's because they simply don't know which contracts are available to them. In others, it's due to the complex procedures associated with the bidding process.
The Procurement Act 2023 was passed with these issues in mind. This new law aims to greatly improve access to public sector contracts for SMEs and voluntary, community and social enterprises (VCSEs).
Benefits of the Procurement Act for small London businesses
More spending with SMEs
At the heart of the new Act is a drive to help smaller businesses win public sector contracts.
The government's National Procurement Policy Statement – which authorities must follow when awarding tenders – says SMEs and VCSEs should have a fair chance at bidding for public contracts.
The hope is that this will both grow the economy and make the UK's supply chains much stronger.
All government departments and their arm's-length bodies must set three-year targets for spending directly with SMEs (from 1 April 2025) and VCSEs (from 1 April 2026). They must also publish details on their progress every year.
The government said it's working to make changes that allow local authorities to reserve competitions for low-value contracts for small local businesses and social enterprises.
One online platform for all opportunities
A key challenge for small businesses that want to bid for these contracts is knowing where to look.
Under the Procurement Act reforms, the government has launched an online platform where all procurement opportunities will be advertised.
Previously, large-value contracts over £139,688 were published on the Find a Tender service, while contracts over £12,000 were made available through Contracts Finder.
The new platform is an improved version of Find a Tender and is available at www.find-tender.service.gov.uk. It publishes all regulated public procurement notices, which cover:
What goods, services or works the public sector is going to buy.
Opportunities for suppliers to bid for contracts.
Information about how a decision to enter into a public contract is made.
Information about the awarded contract throughout its life.
If your business wants to deliver work for major organisations in the capital – such as Greater London Authority, London Fire Brigade, Metropolitan Police, NHS London and Transport for London – you can use Find a Tender to refine your search by selecting 'London' in the location filter.
You can get more advice on winning public sector contracts in London from the London Anchor Institutions' Network (LAIN), which brings together some of the capital's biggest organisations.
LAIN is using its experience in procurement, recruitment and estate management to create a fairer, greener and more prosperous city.
"Tell us once" registration process for suppliers
Another challenge for small businesses under the old procurement system was how long it took to submit information every time they went in for a contract.
The new approach works as a "tell us once" system. This means you upload the main details about your business only once, rather than every time you apply for a contract. The information is stored for you to use again later.
Simpler procedures
Under previous procurement regulations, there were six procedures contracting authorities could choose to follow when awarding contracts.
The Procurement Act 2023 simplifies the process with just two procedures:
Open procedure: this is for straightforward procurements and is described as "a single stage tendering procedure without a restriction on who can submit tenders".
Competitive flexible procedure: this gives contracting authorities the flexibility to design a tendering process that's tailored to their needs.
"Most advantageous tender"
When deciding which suppliers should be awarded a contract, public sector organisations will now use an approach called "most advantageous tender" (MAT), rather than the "most economically advantageous tender" (MEAT) one they used before.
This means they no longer need to award contracts based on which bid has the lowest cost. Now, they can consider other factors, such as social value, sustainability and the overall benefit to the community.
The idea is that this will open up more contracts to small businesses in London that offer these benefits but can't compete on price with their larger competitors.
Faster payments
The Procurement Act 2023 strengthens the requirement that suppliers are paid promptly for their work.
In line with new government guidance, all public procurement contracts should include a term that says authorities must pay suppliers within 30 days of receiving an invoice. (This also extends to any subcontracts a supplier sets up to fulfil their contract.)
There will be regular spot checks of government departments (and their arm's-length bodies) to make sure smaller suppliers are paid within the 30-day timeframe.
Procurement Act checklist for London small businesses
Read government guidance on benefiting from the Procurement Act.
Watch government videos on how to benefit from the Procurement Act.
Sign up for procurement updates from the government.
Register for the new Find a Tender service.
Search within Find a Tender for London-specific public sector opportunities.
Visit the London Anchor Institutions' Network (LAIN) website for information on how major London public sector organisations approach procurement.
Discuss the changes with your existing public sector customers and ask if they're planning to offer any contracts using the new approaches.
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