The Procurement Act 2023 came into effect on 24 February 2025 and introduces new procurement rules for public bodies in England, Wales, and Northern Ireland. Emphasizing social value as a central component of procurement processes, the Act now requires public sector clients to consider social value in all their procurement decisions to ensure that projects contribute to community development and sustainability targets. It aims to make procurement simpler for both Contracting Authorities and suppliers of all sizes, but most especially small businesses, start ups and social enterprises.
Although 10% is the minimum, contracting authorities may apply a higher weighting depending on the specific procurement and its social impact potential.
The Act changes how the public sector assesses bids from ‘most economically advantageous tender’ (MEAT) to ‘most advantageous tender’ (MAT), meaning tenders are not solely considered on their price, but also their social value and public benefit. The legislation also introduces mandatory 30-day payment terms for all contracts and subcontracts.
Find guidance, support, learning and development resources here: Transforming Public Procurement - GOV.UK
This change in procurement priorities presents a significant advantage for small and medium-sized enterprises (SMEs) and voluntary, community, and social enterprises (VCSEs). These organizations are often more agile and able to focus on community-based outcomes, which can be a strong competitive advantage in the procurement process. By placing a greater emphasis on social value, the Procurement Act 2023 opens up opportunities for SMEs and VCSEs to compete more effectively with larger firms, which may have historically dominated the sector. The focus on social value over purely financial considerations can level the playing field, allowing smaller organizations that are embedded in local communities to win contracts by demonstrating their ability to generate positive social and environmental impacts. However, this shift also requires a change in procurement culture and behaviors, demanding that decision-makers adopt a more holistic view of value and move away from traditional, cost-based assessments.
