The policy statement "sets out the strategic priorities for public procurement and how contracting authorities can support their delivery". Amendments to the statement are determined and laid before Parliament by the Minister for the Cabinet Office. It is a political document. The government of the day determines the government priorities that £300bn of public sector spending might support the delivery of. This strategic approach to procurement is pivotal in shaping how public contracts are awarded and executed within the current regime. With the new public procurement framework, ensuring these priorities are met while maintaining fair competition is crucial.
The latest version of the policy statement, published in May 2024 and coming into effect on 28th October, contains broadly similar content to previous statements: value for money, social value, support for SMEs, and familiar words about commercial delivery and procurement capability.
However, the eagle-eyed will have noticed an important, barely mentioned change. The guidance that contracting authorities should consider the statement has been replaced by an instruction that they must consider the statement. This subtle shift emphasises the importance of adhering to procurement regulations.
One carefully chosen word: ‘must’. As all civil servants know, words matter.
As well as creating a new statutory obligation for contracting authorities, the change signposts a direction of travel—i.e., a clearer intention to leverage public sector spend to support political priorities. Ministers are advised to review the statement when ‘there has been a significant change in circumstances,’ which brings us to the matter of the incoming government.
There is little if anything, in the existing policy statement that the new government is likely to object to, so it will be more of a case of identifying new policies that contracting authorities must consider. A flexible procedure for adapting to these changes will be crucial.
The new government’s manifesto commitment to establishing a new, more strategic, and more interventionist ‘industry strategy’ might provide some clues. Light on detail; however, there are several discernible themes: innovation, long-term investment, R&D, Net Zero, AI, private sector partnerships (PFI, anyone?), GB Energy, and support for key sectors. These are likely to be key elements of the strategy moving forward. Larger suppliers may have a significant role to play, but it will be essential to ensure that smaller entities are not excluded from the procurement procedure.
And one notable point of absolute clarity. ‘Procurement will be aligned with our industrial strategy priorities.’
Here are three practical steps that contracting authorities should be taking:
- Update relevant policies and procedures: Many authorities will be updating policies and procedures already to prepare for the new Act, which is anticipated to receive royal assent soon. Updated procedures should be clear about the obligation to consider the NPPS, for example, by creating an audit trail of considerations made and decisions taken. Legal advice may be needed to ensure that these updates are comprehensive and compliant with the new standards.
- Equip the team: Ensure that everybody involved in a procurement process is aware of the NPPS, understands the implications, and knows how policy priorities can be addressed. Team workshops can be a good vehicle for sharing ideas and experiences about how specifications, evaluation, and the structure of commercial processes can be used. Legal advice might also be necessary to navigate any complex issues that arise during procurement activities. Additionally, enhancing the team’s procurement expertise will be vital to effectively implementing the new priorities.
- Keep abreast of developments: It is too soon to know precisely which policies the Government will seek to advance through leveraging public sector spend. Employment practices and equality are two obvious candidates, as are promoting locality and using the cooperative and mutual sectors. Reading the ‘mood music’ will be as important as reading the documents. For ongoing compliance and to ensure alignment with the evolving public procurement landscape, seeking legal advice periodically could be beneficial.
A new statutory obligation, together with a new government, new policies, and a stated intention to use procurement to deliver strategic priorities, has changed the landscape. Public sector procurement teams will be hearing much more about the National Procurement Policy Statement over the next five years. Moreover, the introduction of framework agreements and a flexible procedure in procurement processes will likely become more common as authorities adapt to the new priorities. Ensuring fair competition within this evolving framework will be crucial to achieving the desired outcomes.