The Procurement Act is an opportunity for government to reap the benefits of transparency

Government spends around £380bn each year on buying goods, works and services from suppliers each year. Today, the law that regulates this spending is changing, and changing for the better. 

The Procurement Act was passed in 2023 under Rishi Sunak’s premiership, and Keir Starmer’s government should be grateful for a piece of legislation which should increase transparency and improve accountability for poor performance. However, making this a reality will require concerted effort across the public sector.

More transparency has long been needed in public procurement

Oversight of public procurement is frequently limited by poor quality data, which is often missing or published late. When available, it can be of variable quality and located on different, unconnected platforms. This makes it difficult for government to understand the procurement landscape, and spot problems or opportunities early. Suppliers face similar difficulties. The patchwork of clunky portals they may need to navigate to secure a contract presents a barrier to doing business with government, particularly for small businesses and charities. 

The Public Accounts Committee found that the poor quality – and lack of availability of – procurement data may be limiting competition, and reducing value for money from procurement spend. Key causes of this have been complex internal controls and processes, outdated IT systems and a lack of contracting capacity to navigate them. But more broadly, transparency has not been seen as a sufficiently high priority in public procurement.

The new rules could be a win-win for both suppliers and government

The Procurement Act will require greater transparency across the contract lifecycle, with a broader range of notices published from pre-market engagement through to contract termination. A new Central Digital Platform will aim to streamline the existing patchwork of portals – and reduce the administrative burden – by bringing this information together in one place and giving each public sector organisation and supplier a unique identifier.

There will inevitably be upfront costs to getting the Central Digital Platform up and running, and previous IfG research has recognised that governments might be wary of transparency due to the costs involved in bringing together and publishing information. But in this case, the procurement professionals putting the effort into providing contract information will reap the rewards. Better public procurement data should lead to lower prices due to increased competition, improve accountability, create new markets and business opportunities, and make it easier to spot corruption.

The government must get implementation of the Procurement Act right 

Alongside the implementation of the Act, departments are in the throes of a spending review in which they have been asked to review spending – including procurement – line by line. Indeed, defence secretary  John Healey told an IfG event that procurement has been a focus of the Ministry of Defence’s own review. This search for efficiencies should have shone a spotlight on the poor quality of procurement data in many parts of government. 

But transparency requirements under previous legislation were frequently not met, in part because – by the government’s own admission – it has no clear mechanism for enforcing compliance.  ⁴ Davies N, Chan O, Cheung A and others, Government procurement: the scale and nature of contracting in the UK, Institute for Government, 2018, www.instituteforgovernment.org.uk/publication/government-procurement p37-38  So as the new Act comes into force, the Government Commercial Function – led by new chief commercial officer Andrew Forzani – should monitor whether public organisations are meeting the Act’s transparency requirements, and put in place incentives for doing so. In addition, the Treasury should consider updating Managing Public Money – the government’s guide to how departments should handle public funds – to make accounting officers responsible for their organisation maintaining and publishing high-quality procurement data.

Getting implementation right will also be about the capacity of public sector organisations to meet the Act’s requirements – when resources are stretched, data quality can fall by the wayside. The newly updated National Procurement Policy Statement – which has a statutory basis under the act – demonstrates a welcome focus from government on having appropriate “capacity necessary to deliver value for money”. Contracting authorities will need to carefully consider their commercial capacity as part of workforce planning, recognising how this could lead to savings down the line. 

The Procurement Act is an opportunity – and one which should increase transparency and bring efficiencies. As it comes into force, central government must collaborate with suppliers and organisations across the public sector to understand what is working well, and not so well, and be responsive in learning from mistakes to make it a success.