The General Election and its impact on public sector procurement
16 July 2024
As the general election loomed, many bidders will have noticed a shift in the procurement process, including delays in contract awards, which has driven concerns about what this means for public sector procurement contracts / bids.
This article will help you to understand these changes, the reasons behind them, and give you some reassurance about your position as a bidder in public sector procurement.
Uncertainty for current public sector contracts
During a general election, new governments will review and possibly reassess ongoing contracts to align them with their policies. This process causes delays and interruptions to the procurement timetable as new officials take office and familiarise themselves with existing projects.
What this means for you
This will likely result in policy and contract changes, budget adjustments that will impact funding, and new legal and compliance requirements.
- Prepare to adapt your planning and resource allocation
- Establish communication and coordination with incoming Contracting Authority staff
- Document key information about the contract, progress made, delays, and resource allocation so you can share information with new Contracting Authority staff to prevent delays
- Review your contract for safeguarding clauses that cover government changes such as early termination, compensation mechanisms, and renegotiation terms triggered by policy shifts post-election
- Be aware that independent bodies like the National Audit Office (NAO) and the Crown Commercial Service (CCS) oversee public procurement, investigating and reporting on practices to maintain fairness throughout electoral cycles.
The new Labour government will likely share transition plans that include continuity of essential services and projects, aiming to review ongoing contracts minimally and offer clear guidance for suppliers moving forward, in the coming months you should ask for information about this.
Delays in contract award
Since the general election, there have been delays in public sector contract award. Within the General Election Guidance 2024document issued by the government large, and/or contentious contract awards have been postponed until after the election.
General Election Guidance 2024
Section G.2 – Decisions on matters of policy, and other issues such as large and/or contentious commercial contracts, on which a new government might be expected to want the opportunity to take a different view from the present government, should be postponed until after the election, provided that such postponement would not be detrimental to the national interest or wasteful of public money.
What this means for you
Whilst it allows a new government to make informed decisions, this guidance created a challenging environment for public sector bidders, marked by uncertainty and potential delays in procurement processes. It slowed down procurement activities, affecting how businesses that rely on public sector contracts plan and project their finances. As a public sector bidder, you should:
- Revisit your strategic decision-making and resource allocation to accommodate any uncertainty about the future direction of government spending and priorities.
- Raise a clarification question with the Contracting Authorities to seek guidance on any delays or disruptions to the procurement.
- Research to find out if the procurement you have submitted a bid for depends on the previous government’s policies. If it does, you can plan for potential funding changes that could impact the contract value upon award.
Upcoming public sector procurement
Following a general election in the UK, upcoming public sector contract notices often go ahead in line with the established procurement rules and regulations. However, there can be a period of adjustment as the newly elected government settles in and may review or reassess priorities. Contract notices that are already in the pipeline generally continue as planned, with some delays as government formulates and outs in place new policies.
What this means for you
- Keep up to date through official channels to understand any shifts in procurement strategies or priorities that may arise from the election results. This can include amended PIN notices, adjustments to the scope of frameworks / contracts, and changes in timeline. We recommend you do this via Find a Tender, (https://www.gov.uk/find-tender) your local council’s website, and by keeping in touch with the Contracting Authority you are planning to bid through
- Make sure a contract opportunity is still suitable for your business before putting resources into writing bids that may have changed beyond your needs.
Labour amendments to the Procurement Act 2023
The Labour party included some amendments they will make to the Procurement Act 2023 within their manifesto:
Procurement Act 2023
Labour announced plans to review and potentially revise the new Procurement Act, set for introduction this October. The party aims to explicitly add principles that prioritise social value and sustainability in public procurement. They plan to favour local and socially responsible organisations within the Act and improve transparency in public sector procurement.
Green Procurement
Labour’s manifesto commits to sustainable procurement practices by prioritising green and ethical sourcing. They will introduce regulations requiring greater transparency in supply chains, compelling businesses to demonstrate that their sourcing practices do not contribute to environmental or human rights abuses. Their plans include setting targets for the public sector to purchase 50% of food from local or higher environmental standards sources.
Circular Economy
Labour has pledged to ban single-use plastics and extend producer responsibility schemes, making manufacturers accountable for the entire lifecycle of their products. They will introduce regulations setting minimum standards for product design and repairability. Their manifesto supports the circular economy model, focusing on reducing waste, increasing recycling, and encouraging the reuse of materials. They pledge to create a supportive environment for circular businesses, helping them scale and compete.
What this means for you
The Labour party has criticised the new Procurement Act. During a March 2024 House of Commons debate on the ‘Public procurement (British Goods and Services) Bill’, Dame Nia Griffith, the Shadow Minister in the Cabinet Office at that time, argued that the Procurement Act “will allow the same wasteful approach to emergency contracting rules that we saw during the pandemic, with friends and donors of the Tory party given the first bite of the cherry”.
With the Procurement Act 2023 coming into effect at the end of October, as the new government is likely to put in place changes within the Act and new procurement regulations.
Expect to see a lot of focus on social value in new, and a change in the number of tenders published in your industry, depending on Labour’s spending priorities.
Conclusion
The outcomes of a general election can significantly influence public sector procurement processes. Following election results, changes in government policies may trigger contract renegotiations, early terminations, or compensation claims under contractual provisions designed to protect you.
- Be prepared to navigate shifts in procurement priorities and regulations as new administrations set their agendas.
- Monitor developments closely and adapt strategies to align with evolving governmental objectives, so that you are compliant with updated requirements and maintain a competitive advantage in the public sector marketplace.
- Stay up to date on any amendments or reinterpretations of the upcoming Procurement Act transition and remain compliant with public sector procurement regulations.