What are the anticipated changes to public procurement?

In December 2020, the Cabinet Office set out proposals for shaping the future of public procurement legislation with the publication of a Green Paper, Transforming Public Procurement. The Government’s (Govt) response to consultation on the Green Paper has just been published here.

Most respondents to the consultation agreed with the proposals to simplify the current legislation as far as possible into a single, uniform regulatory framework. The respondents considered that simplification of the current legislation should make things easier for public sector contractors.

The Public Contracts Regulations 2015 requires the public sector to include 30-day payment terms in public sector contracts. The Green Paper has gone further with proposals on prompt payment and effective contract management. The respondents to the Green Paper supported the proposals on prompt payment and effective contract management with recognition of the need for compliance monitoring within the new procurement regime. Under the new procurement legislation the Govt intend to introduce a duty for contracting authorities to address non-compliance with procurement legislation and build on the existing powers of investigation by the Minister for the Cabinet Office. However, some respondents raised concerns about a proposed new public unit that would oversee the integrity of public procurement, notably the interaction of the new public unit with existing local government governance.

A series of changes are proposed in the Green Paper to strengthen the approach to the exclusion of suppliers from procurements for misconduct such as fraud, corruption or poor performance. The consultations on these Green Paper proposals were positive and the Govt intend to take most of them forward. It was however clear from the responses that there is a desire from stakeholders for further consultation together with a wider refresh of the legal framework for exclusion of suppliers. Recognising these concerns, the Govt says it intends to introduce a new exclusions framework which will be simpler, clearer and more focused on suppliers who pose an unacceptable risk to effective competition for contracts. This includes the reliable delivery, and the protection of the public, the environment, public funds, the rights of employees.

The Green Paper proposed capping the level of damages available to bidders that successfully challenge a contract award decision. This proposal will not be taken forward, but the Govt are considering other measures aimed at resolving disputes faster which would reduce the need to pay compensatory damages to losing bidders after contracts have been signed.

Overall, the consultation to the Green Paper gave broad support for increasing transparency in public procurement. It is most important that all public procurements fairly treat all bidders within a transparent procurement regime. The Govt intend to ensure the transparency requirements are proportionate to the procurements being carried out and are simple to implement. It is proposed that detailed guidance is published for contracting authorities to implement transparency requirements.

There were some other themes from the consultation on the Green Paper with concerns with companies operating under the Utilities Contracts Regulation 2016 and the current Light Touch Regime. The Light Touch Regime is proposed to be removed by the Green Paper.

In May 2021, the Queen’s Speech announced that legislation to give effect to Government plans to reform public procurement would be brought forward when Parliamentary time allows. Once the Bill becomes an Act, there will need to be secondary legislation (regulations) to implement specific aspects of the new public procurement regime. The Govt has yet to confirm the parliamentary programme to conclude the new public procurement legislation, but it intends to give six months’ notice for the implementation of the new legislation. It is therefore considered unlikely that new public procurement legislation will come into force before 2023 at the earliest. The new legislation will apply to all public bodies in England and Wales, with the Northern Ireland Executive yet to decide whether the Act will apply. Scotland will be making its’ own new public procurement legislation.

The new public procurement legislation should come into force to allow contracting authorities to procure services and works to deliver the requirements of Consistent Collections, Extended Producer Responsibility and Deposit Return Scheme secondary legislation. We can therefore expect new legislation to simplify the Public Contracts Regulations 2015 (as amended) from 2023.

Frith Resource Management provide technical procurement advice on waste management contracts (see Procurement Technical Advice), for a bespoke service to meet your needs email bob@frithrm.com or call 01746 552423.