Updates

6 January 2026 – Local Authorities in England permitted to reserve below-threshold procurements for UK or local suppliers

On 2 December 2025, the Government published the draft Local Government (Exclusion of Non-Commercial Considerations) (England) Order 2026. If implemented, this will allow local authorities in England to reserve certain below-threshold procurements for UK-based or local suppliers.

Under the PA23 (section 5(5)), “below-threshold” refers to contracts falling under specified financial limits. The draft Order means authorities can choose to restrict participation to suppliers based in the UK or within a defined local area, which may include neighbouring counties or boroughs.

Authorities opting to reserve competitions must clearly set out their approach in procurement documents, including how they define the eligible “local area”.

Accompanying guidance explains how these reservations can be applied in practice, supporting local economies and increasing opportunities for smaller businesses.

6 January 2026 – ‘New’ PA23 notices from 1 January 2026

On 1 January 2026, Sections 69 and 71 of the PA23 came into force, requiring contracting authorities to publish payments compliance notices and contract performance notices under the PA23. These notices will be published on the central digital platform (FTS).

Further detail on the provisions coming into force is contained within the Procurement Act 2023 (Commencement No. 4) Regulations 2025/1316.

Payments Compliance Notices

A payments compliance notice is a notice published by a contracting authority setting out the extent to which, over a 6 month reporting period, the contracting authority has paid its invoices in accordance with the term set out in section 68(2) of the PA23. The notice will also include other reporting information (set out in regulation 38(2)(c) of the Procurement Regulations 2024) relating to when invoices were paid. The publication of a payments compliance notice should allow scrutiny of public sector payment practices.

Contract Performance Notices  

Under section 71 of the PA23, contracting authorities are required to regularly assess suppliers’ performance against the KPIs set and to publish information relating to that assessment. That includes information in relation to breaches of contract or poor performance. The specific information that must be published in a contract performance notice is listed in regulation 39 of the Procurement Regulations 2024.  

The coming into force of the obligation to publish a contract performance notice is of interest to authorities and suppliers alike. It is a new notice not required under the previous procurement regime, and its publication should provide an increased level of transparency around the delivery of public contracts.

In addition, the publication of a contract performance notice could have serious consequences for a supplier.  Where a contracting authority has published a contract performance notice following a breach of contract or poor performance as set out in section 71 of the PA23, Schedule 7, paragraph 12(4) provides that a discretionary exclusion ground applies in respect of the relevant supplier.

If you have any queries about the publication of a contract performance notice in the context of possible poor performance or breach, or generally, then please get in touch with the CMS procurement team.

5 January 2026 – Updated thresholds from 1 January 2026 

The financial thresholds for the application of the procurement legislation across the UK changed on 1 January 2026.

The changes have been made to maintain compliance with the World Trade Organisation’s Agreement on Government Procurement.

The financial thresholds for almost all types of contract have been slightly lowered from 1 January 2026. This means that more contracts will now be caught by the procurement regime.  

The thresholds under the Procurement Act 2023

The changes to the threshold amounts set out in the Procurement Act 2023 are contained within The Procurement Act 2023 (Threshold Amounts) (Amendment) Regulations 2025.  

The new thresholds as of 1 January 2026 are:

The thresholds for light touch regime contracts (contracts for certain social, health, education and other public services) remain the same.

Wales

The threshold amounts which apply to Devolved Welsh Authorities set out in the Procurement Act 2023 have also been amended. These changes are contained within The Procurement Act 2023 (Threshold Amounts) (Amendment) (Wales) Regulations 2025. This WPPN contains further information.  

Scotland

The threshold amounts contained in the Public Contracts (Scotland) Regulations 2015, the Utilities Contracts (Scotland) Regulations 2016 and the Concession Contracts (Scotland) Regulations 2016 also changed on 1 January 2026. There is no change to the thresholds in the Procurement Reform (Scotland) Act 2014. This SPPN contains further information, including some additional guidance on the treatment of VAT. 

4 November 2025 – Scottish Government release draft secondary legislation clarifying cross-border procurement rules

The Scottish Government recently published draft secondary legislation, the Cross-Border Public Procurement (Miscellaneous Amendment) (Scotland) Regulations 2025, ahead of its enforcement date of 20 December 2025.

The Regulations will amend Scotland’s procurement regime, the Public Contracts (Scotland) Regulations 2015, the Utilities Contracts (Scotland) Regulations 2016, the Concession Contracts (Scotland) Regulations 2016 and the Procurement Reform (Scotland) Act 2014, to clarify the applicable rules for authorities when carrying out a cross-border procurement in light of the enforcement of the Procurement Act 2023 in the rest of the UK.

The Regulations address the previously uncoordinated position for Scottish cross-border procurements within the UK. It will now be clear that when devolved Scottish authorities (as defined by the PA23) carry out a procurement which is regulated by the PA23, the Scottish regime will not apply. This includes scenarios such as a devolved Scottish authority using a PA23 framework.

The position for UK contracting authorities (as defined by the PA23) is also clarified. The Regulations specify that the Scottish regime will apply to UK contracting authorities when they carry out a procurement within Scotland under a devolved arrangement, e.g. a UK contracting authority using a PC(S)R framework. However, the Regulations cannot disapply the requirements of the PA23 for UK contracting authorities in those circumstances, so technically there will be a dual requirement on such procurements: conformity with both the Scottish regime and the PA23.

While the Regulations will be a welcome clarification for devolved Scottish authorities, there is still some uncertainty for UK contracting authorities using Scottish devolved procedures. We are not aware of similar amendments coming to the PA23, and so this dual requirement will subsist for UK Contracting Authorities unless the UK Parliament legislates for an amendment.

The draft Regulations can be accessed here: The Cross-Border Public Procurement (Miscellaneous Amendment) (Scotland) Regulations 2025. 

23 October 2025 - “A new plan for Europe’s sustainable prosperity and competitiveness”

The new Public Procurement Act is scheduled for Q2 2026

The European Commission has published its 2026 plan for legislative reform, and confirmed that the new Public Procurement Act will come forward in the first half of next year. The Public Procurement Act is presented as a simplification initiative which “must result in significant net cost savings”.  

This announcement on the timing of the reforms comes just after the European Commission published its formal evaluation of the EU Public Procurement Directives (2014). The EC’s conclusions include that the 2014 EU Directives lacked clarity and flexibility, and that sector-specific rules added complexity. Lack of transparency and data were other issues highlighted.

While the revision of the 2014 EU Directives will not change the UK procurement legislation, it could impact cross-border procurement activity and will be of interest to UK businesses bidding into procedures in the EU.

The CMS Global Public Procurement Group has over 170 public procurement specialists in over 50 cities worldwide. Our public procurement specialists in the EU are closely tracking the reforms and are on hand to support our EU based clients to unpack and prepare for future changes. 

8 October 2025 - Updated Guidance on Payment Spot Checks in Public Sub-Contracts

The Procurement Act 2023 (PA23) implies a 30-day payment term into public contracts and public sub-contracts. This means that both contracting authorities (paying suppliers) and suppliers (paying sub-contractors) have to pay sums due within 30 days of receipt of a valid, undisputed invoice (sections 68 and 73).

From the beginning of October, PPN 021 takes this a step further for central government bodies and for suppliers with relevant sub-contracts. Now, these contracting authorities are advised to build in terms to a contract which require the supplier to, on demand, provide the authority with evidence of its compliance with the obligation to pay sub-contractors on time. These “spot checks” should be carried out “at random” but “at least once every six months from the award date of the contract”.

Updated guidance from this week:

• provides example contractual terms to include in all relevant contracts where the procurement commenced on or after 1 October 2025;
• requires that in-scope authorities publish the outcomes of these “spot checks” within 3 months; and 
• suggests that authorities may choose to directly inform sub-contractors of their rights under the PA23 where the 30-day payment term is not being met.

While this PPN doesn’t provide sub-contractors with any additional contractual rights, it does add a layer of transparency and accountability which is designed to incentivise suppliers to pay up on time. Sub-contractors will not benefit directly from payments compliance notices (under section 69 of the PA23), but this PPN may have a similar effect on suppliers as those notices are designed to have on contracting authorities. However, payment spot checks also add another layer of bureaucracy to the management of public contracts, for in-scope contracting authorities and suppliers alike.

PPN 021 and the updated guidance can be found here.

1 October 2025 – Further procurement reforms: good news for British business?

During the 2025 Labour Party Annual Conference, Chancellor Rachel Reeves announced: ‘We are putting Britain first, empowering us to prioritise British-built ships and British-forged steel. Strengthening our national economic security and creating manufacturing jobs here in Britain. Because where things are made, and who makes them, does matter’.

Is this announcement, framed as part of the the Chancellor’s ‘securonomics’ policy agenda, a reference to planned reforms to the UK procurement rules to enable contracts to be awarded to British businesses? Could it open the door for British shipbuilding contracts to be awarded to British shipbuilders, for example?

In the UK Government’s recent Consultation on Further Reforms to Public Procurement (June 2025), the Government consulted on ‘Giving Ministers powers to designate specific services, works or goods as critical to our national security and direct contracting authorities to take this into account when considering whether the national security exemption applies to a particular procurement to protect the UK’s national interests.’

We await the publication of the consultation outcome and sight of any proposals to amend UK procurement legislation or to introduce new policy.

The Chancellor’s speech is being interpreted as confirmation that reforms will be introduced to empower contracting authorities to prioritise bids from British businesses. However, it remains to be seen how new legislation and/or policy to better support British businesses could be introduced in a way which ensures compliance with the UK’s international trade obligations.  

The Chancellor’s address can be read in full here.

20 February 2024 - Court of Appeal confirms position on damages for breach of public procurement rules

The much anticipated judgment in the Braceurself appeal has been handed down by the Court of Appeal. The Court of Appeal (led by LJ Coulson) has reaffirmed the position established by the High Court that despite a breach of the public procurement rules changing the outcome of a procurement, that is not of itself automatically ‘sufficiently serious’ to justify an award of damages.