The Cabinet Office has published new public procurement rules to drive growth, opportunities for small businesses and exclude suppliers that fail to deliver.

The new public procurement regime under the Procurement Act 2023 came into effect on 24 February 2025 and is now in force.

The new laws putting growth, small businesses and transparency at the heart of public contract awards are part of a transformation of the government’s commercial landscape that delivers on the Plan for Change.

A more open public procurement regime driving value for money is now in place through the Procurement Act 2023, which sets rules that all public bodies must follow when they buy goods and services.

The Cabinet Office said the Act will boost growth by cuttiing red tape for small and medium sized businesses applying for government contracts - combining multiple regulations into one simple set, and publishing procurement data in a standard, open format on a Central Digital Platform.

The Act is bolstered by a new National Procurement Policy Statement (NPPS) that sets out the government’s Mission-led priorities which the public sector must have regard to in its procurement activity.

The changes open up opportunities for small businesses to bid for public sector contracts. It also ends late payments that put small businesses at risk, introducing a mandate of 30-day payment terms for all public sector contracts.

Costs for both business and the public sector will be reduced through simple new processes that drive innovation, offering greater flexibility for buyers to tailor procurement to their exact needs.

For example, providing public bodies more opportunities to negotiate with suppliers, and using built-in stages to procurement cycles such as demonstrations and testing prototypes.

Cabinet Office Minister Georgia Gould said:

“Public sector procurement can now fully deliver on the Plan for Change - unleashing local growth, opening up opportunities and embedding transparency and accountability.

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, added:

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

A Central Digital Platform is now in operation which will streamline processes and cut red tape, allowing suppliers to register their details and see all bidding opportunities in one place.

Citizens can also scrutinise public procurement data published on this platform, as part of the Act’s rules for greater transparency.

The Government will also use tough new powers to investigate supplier misconduct, including underperforming suppliers and those that pose security risks to supply chains, with the ability to debar or exclude them from contracts.

The Procurement Review Unit (PRU) and National Security Unit for Procurement (NSUP), now operational as dedicated resources in the Cabinet Office, will carry out this work. The NSUP will take robust action against any organisation, actor or entity which presents a national security threat.