New public procurement rules take effect

New changes to make public procurement processes more efficient, transparent and competitive have taken effect from 24th February 2025.

The changes come following the Procurement Act 2023 gained Royal Assent in October 2023.

Among the updates to public procurement rules coming into effect include the shift from awarding contracts based on the Most Economically Advantageous Tender (MEAT) to the Most Advantageous Tender (MAT). This change allows Public Sector contracting authorities to consider broader factors such as social value and environmental performance when making award decisions, rather than focusing solely on cost.

Additionally, the new rules mandate 30-day payment terms for Public Sector contracts, ensuring quicker payments to suppliers. This is expected to enhance cash flow for businesses working with the government and encourage greater participation from small and medium-sized enterprises (SMEs).

Overall, the updates under The Procurement Act 2023 aim to create a more balanced and flexible approach to public procurement, promoting sustainability and social impact while maintaining competitive and fair practices.

Cabinet Office Minister Georgia Gould said:

“The Procurement Act, supported by our new National Procurement Policy Statement, will tear down barriers that stop small businesses from winning government work, giving them greater opportunity to access the £400 billion spent on public procurement every year, investing in home-grown talent and driving innovation and growth.“

Shirley Cooper, Crown Representative for Small Businesses, said:

“This once–in-a-generation change to public procurement laws will provide enormous opportunities for small businesses to take a greater share of contracts.

The Act, which goes live alongside our bold new National Procurement Policy Statement, will drive economic growth and deliver on the Government’s Missions and the Plan for Change.

“I thank the public sector for the considerable amount of work done to prepare for and understand these new rules, and how they can fully benefit both businesses and the taxpayer.“