How SMEs can Unlock Greater Access with Procurement Act

A recent industry forum has shed light on the significant changes introduced by the Procurement Act 2023, particularly how it may reshape opportunities for small and medium enterprises (SMEs) seeking to work with social housing providers.

The collaborative event, organised by Procure Plus and legal specialists Devonshires Solicitors, brought together a diverse group of procurement specialists and housing sector representatives to examine the implications of below-threshold contracts under the new legislation.

Supporting local business growth

The session highlighted how SMEs—which represent an overwhelming 99.8% of British businesses and employ approximately three-fifths of private sector workers—often struggle to compete for public contracts despite their potential value to the housing sector.

"There's a real appetite across the sector to get this right - but also a great deal of confusion. We saw firsthand just how many people are still unsure about the rules around below-threshold procurement," says Clare Tetlow, Procurement Lead at Procure Plus.

"These contracts are a huge opportunity to support local suppliers and deliver real social value, and they're particularly important in the social housing sector, where every pound spent has to work harder for communities.

"We want to help organisations feel confident in opening up their processes without falling foul of the law."

During the forum, Becky Pearson MCIPS from Procure Plus emphasised how smaller businesses frequently encounter obstacles when attempting to secure public sector work. These challenges range from unnecessarily complex tendering processes and strict qualification requirements to limited information about forthcoming opportunities.

Even when possessing the necessary skills and capabilities, many smaller organisations simply lack adequate resources or documented track records to compete effectively against larger, more established companies.

The discussion explored several practical approaches social housing providers might adopt to create more equitable procurement landscapes. These included streamlining procurement documentation, implementing more accessible engagement approaches, and actively seeking connections with local supply chains.

Particular emphasis was placed on effective market engagement, transparent advertising (with special focus on contracts exceeding £30,000), and reducing administrative hurdles that disproportionately affect smaller organisations.

Legal clarity provided

Kris Kelliher, Partner at Devonshires, offered participants a comprehensive overview of the Act's legal framework, explaining procedural requirements for 'regulated below threshold contracts' while emphasising crucial elements like transparency, accessibility and prompt payment provisions.

His presentation also addressed how housing associations and councils can maintain compliance while adapting procurement strategies to suit their specific operational requirements.

Kris says: "The questions and observations raised by the attendees during the session provided a really good insight into how the social housing sector approaches the procurement of below threshold contracts in practice.

"It was really interesting to get the attendees' thoughts on the challenges and opportunities the new Procurement Act will present them with in this regard." 

Ongoing uncertainties

The event revealed that considerable confusion persists regarding various aspects of the legislation. Participants raised numerous questions about appropriate thresholds, advertising regulations and contract procedures.

Common areas of uncertainty included distinguishing between services and works—a classification with significant implications for applicable thresholds—and whether larger contracts could legitimately be divided into smaller packages to fall beneath threshold limits.

Clarification was provided that related contracts must generally be combined unless valid justification exists for separation, with warnings that deliberately splitting contracts to circumvent regulations could result in compliance issues.

The forum ultimately demonstrated that while the Procurement Act offers promising opportunities to diversify supplier bases and increase SME participation in social housing contracts, organisations will need continued guidance to implement these changes effectively.

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