The Impact of the Procurement Act 2023 on Schools

The Procurement Act 2023 represents a significant shift in how public sector contracts, including those in the education sector, are awarded. The act aims to simplify the procurement process, improve transparency, and encourage small and medium-sized enterprises (SMEs) to compete for contracts. For schools, this could mean easier access to high-quality, cost-effective services and solutions that better support their needs.

Summary of Key Sections

What is the Procurement Act 2023? – An overview of the act and how it addresses past procurement challenges.

When does the Procurement Act 2023 come into force? – Key dates schools need to be aware of.

Who does the Procurement Act 2023 apply to? – Understanding which institutions and suppliers are covered.

Which public authorities are excluded from the Procurement Act 2023? – Clarifying the scope of the new rules.

Social Value and the Procurement Act 2023 – How the act prioritises contracts that benefit communities, sustainability, and education.

How Schools Will Benefit – The impact on school infrastructure, budgets, and procurement efficiency.

Key Changes Introduced by the Procurement Act 2023 – Practical implications for school leaders and trust administrators.

What Schools Need to Do Next – Steps to take advantage of the new procurement system.

Conclusion – How the act can help schools improve procurement strategies and make better use of their budgets.

What is the Procurement Act 2023?

The Procurement Act 2023 is a major reform aimed at improving how public sector organisations, including schools, procure goods and services. The act replaces the previous EU-derived procurement rules with a new framework that focuses on transparency, competition, and value for money.

Prior to the act, schools and other public bodies faced three major procurement challenges:

Lack of transparency: The process of awarding contracts was often unclear, making it difficult for new suppliers to compete fairly.
Limited competition: Large, established companies dominated the market, leaving little room for SMEs to bid for work.
High costs: Schools often paid higher-than-necessary prices for services because they were locked into contracts with approved providers.

The act seeks to address these issues by opening the market to a wider range of businesses, ensuring value for money, and making the bidding process more accessible. This is particularly crucial for schools, where budget constraints require careful financial planning.

When Does the Procurement Act 2023 Come into Force?

The Procurement Act 2023 officially came into force on February 24^th 2025. Schools and other public sector bodies are now required to adhere to the new rules when awarding contracts. It is essential for school leaders and procurement teams to familiarise themselves with these changes to ensure compliance and take full advantage of the benefits.

For up-to-date procurement announcements, check the Find a Tender Service.

Who Does the Procurement Act 2023 Apply To?

The act applies to all public sector bodies, including schools, local authorities, NHS organisations, and government departments. This means that Multi-Academy Trusts (MATs), maintained schools, and further education institutions must align their procurement processes with the new legislation.

Which Public Authorities Are Excluded from the Procurement Act 2023?

While the act applies broadly, some public authorities are excluded. These primarily include intelligence and security services, as well as certain defence-related contracts. Schools and educational bodies, however, fall under its remit and must follow the updated procurement guidelines.

Social Value and the Procurement Act 2023

A core element of the new legislation is the emphasis on ‘Social Value’—ensuring that contracts deliver additional benefits to society. This could include:

Creating local job opportunities.
Supporting SMEs and new suppliers.
Enhancing environmental sustainability.
Promoting diversity and equal opportunities.

For schools, this means that when selecting suppliers, they can prioritise businesses that contribute to the local community, support education initiatives, or help schools meet their sustainability goals.

How Schools Will Benefit from the Procurement Act 2023

Addressing Urgent Infrastructure Needs

Many UK school buildings are outdated and in need of urgent repairs. The National Audit Office has highlighted concerns about deteriorating infrastructure and safety risks in school estates. The Procurement Act 2023 could help address these challenges by:

Enabling schools to engage with a broader range of suppliers, leading to more competitive pricing for renovation and construction projects.
Reducing red tape, allowing schools to complete essential upgrades faster and more efficiently.
Ensuring funding is used effectively by selecting providers based on quality and cost-effectiveness, rather than being restricted to a small pool of approved contractors.

Impact of Tax and Budget Changes

Recent tax policy changes, including VAT charges on private schools and increased employer National Insurance contributions, are placing additional financial strain on the education sector. While the government has allocated £2.3 billion in additional school funding, much of this will go toward hiring teachers rather than addressing infrastructure needs.

The Procurement Act 2023 will help schools manage these budgetary pressures by reducing procurement costs and making it easier to find cost-effective solutions for essential services.

Key Changes Introduced by the Procurement Act 2023

With the act now live, schools and education trusts should be aware of the following changes:

Simplified bidding process: More suppliers can now compete for school contracts, increasing competition and driving down costs.

Faster payments: Smaller suppliers will be paid more promptly, making it easier for schools to work with local businesses.

Pre-qualified suppliers: Once a supplier has bid for work, their details are retained, streamlining future tendering processes.

Regulatory oversight: The new Public Procurement Review Unit (PRU) will ensure that contracts are awarded fairly and efficiently, reducing waste and improving value for money.

What Schools Need to Do Next

To take advantage of the opportunities presented by the Procurement Act 2023, school leaders and trust administrators should:

Review their current procurement practices: Identify areas where new suppliers could help reduce costs or improve service quality.
Stay informed: The Department for Education provides resources to help public bodies navigate the new procurement framework.
Engage with new suppliers: Schools should explore working with SMEs and local businesses that may now be able to offer competitive services.

Conclusion

The Procurement Act 2023 offers schools a valuable opportunity to improve their procurement strategies, enhance transparency, and ensure they receive the best possible value for money. By leveraging these changes, schools can address pressing infrastructure issues, stretch their budgets further, and support their local communities. With the right approach, the new legislation could mark a turning point in how schools secure the goods and services they need to provide the best possible education for their students.