How the UK Government is Modernising Public Procurement

The UK Government strategy will shift how £400bn of annual public procurement is managed, moving away from outsourcing towards a "Britain-first" approach.

In an article penned by Chris Ward, MP for Brighton Kemptown and Peacehaven and Parliamentary Secretary in the Cabinet Office, the government outlines a major pivot in procurement policy. The administration is redirecting £400bn in annual spending away from automatic outsourcing and toward domestic industry.

Ward states that, each year, billions are spent on government contracts – and he believes that using this capital to invest in British businesses and support British workers should be a "no-brainer".

However, this has not historically been the case. The MP suggests that the doors for smaller businesses, start-ups and charities have effectively been closed. Ward notes: “Too many workers and communities have lost out. And too often, British businesses felt that the government didn’t have their back.

“Today, we are making changes to protect the industries that matter most to our national security – steel, shipbuilding, energy infrastructure and AI. We will bring more delivery in-house and cut red tape for small businesses trying to win government contracts.”

Prioritising national interest and domestic industry

To implement these changes, the government states it will instruct departments to use powers available in the Procurement Act to put Britain's national interest first and back British industry.

It mandates that departments must now state, for the first time, whether prime contractors are using UK steel – or explain why not. Furthermore, a new shipbuilding framework is being developed to keep government contracts with British firms where necessary and where security interests demand it.

The MP adds: “So, whether you make steel in Port Talbot, build ships on the Clyde or run a tech startup in Brighton, this government is on your side.”

Strengthening the public interest test

Ward says that, for too long, the default has been to hollow out public services and sell them off to the lowest bidder. He adds that this era of indifference is over, as the government introduces a mandatory Public Interest Test for all service contracts exceeding £1m, covering 95% of central government spending.

Before any service is outsourced, departments must now prove it could not be run more effectively in-house. To make this "insourcing wave" a reality, every department is required to publish a clear strategy for bringing services back under public control.

Streamlining processes for SMEs and charities

Ward outlines the government’s belief that, if organisations are investing in British jobs and their local community, they should be rewarded. Consequently, the government is highlighting the importance of positive community impact and the role it plays in procurement decisions with a new definition of social value.

“We know the importance of trade unions in creating good work, so we’re going to work closely with them and the business community to get that definition right,” Ward adds. “Small businesses and charities have told me time and time again that the bureaucratic burden of bidding for contracts has all but blocked them from even trying.

“So, we’ve cut this process right down to the basics, bringing in a ‘tell us once principle’ so they only have to submit their information once, rather than starting from scratch each time. We’ll also introduce AI tools to save bidders hours of time and cut back unnecessary duplication.

“With these changes, we’ve taken a big step forward towards a procurement system that genuinely works in Britain’s national interest."