The Cabinet Office Public Procurement Consultation – What You Need to Know

Titled ‘Growing British industry, jobs and skills’, the overarching objectives in the public procurement consultation include:

• Aligning with the government’s industrial strategy, to support British businesses and create good jobs and communities
• Enhancing economic resilience and strengthen existing and future supply chains in alignment with ongoing reforms
• Opening up more opportunities for SMEs and VCSEs which support a healthy and balanced economy.

As the vast majority of the tender writing we provide is supporting bids for public sector contracts, Executive Compass are ideally positioned for analysis, commentary and our expertise on the new consultation.

What is in the public procurement consultation?

The main areas of interest in the consultation are laid out in pp. 7–19 of the consultation, as outlined below:

Supporting small businesses and VCSEs

Proposed reforms from the Cabinet Office will require:

• Large contracting authorities (£100 million procured per annum) to publish three-year targets for direct spend with SMEs and VCSEs, reporting progress annually
• Clarifying where it is appropriate to award contracts for certain services delivered to vulnerable citizens – primarily, health and social care – without a full competitive procedure
• Excluding suppliers from bidding on major contracts (greater than £5 million per annum) if they cannot demonstrate prompt payment of invoices – defined as an average of 45 days and >95% of invoices settled within 60 days.

Evaluating national capability

Interestingly, the consultation overview also touches on national security measures in public procurement. This will not form part of the public consultation, but is an exploration of giving powers to Ministers to designate specific services, works or goods critical to national security as exempt from procurement procedures.

It is expected that this would only apply to very niche or specialist works, goods or services, and would not have a material impact on the number of public sector tenders available to most prospective suppliers.

Equally, when evaluating whether a high value (£5 million or more) contract should go through the tender process, contracting authorities would be required to conduct an assessment regarding whether it could be delivered using in-house resource. The extent or outcome of such an assessment (for instance, an impact report) is unspecified – however, it aligns with one of the government’s wider objectives of ‘ensuring best value for money’ in procurement.

Supporting good quality, local jobs and skills

Lastly, the Cabinet Office appears keen to continue integrating social value into their procurement strategy – which was the subject of some debate, following the omission of social value from the legislative text of the Procurement Act.

As such, within this section, they propose the following:

• Authorities mandate at least one award criteria for major contracts (greater than £5 million) towards contributing to jobs, opportunities or skills, to comprise at least 10% of total scores available
• Contracting authorities to standardise social value criteria, selecting these from a ‘streamlined list’ developed in conjunction with the public sector and suppliers
• Decree at least one social value KPI relating to jobs or skills for major contracts, with mandatory annual reports from suppliers demonstrating progress against commitments.

Of particular interest is the proposal to standardise social value criteria across all qualifying bid and tender opportunities. Standardised measures and templates do exist, such as the Social Value Portal TOMs calculator or the central government’s model award criteria (MAC) – however, the proposed system appears to be much more all-encompassing.

How suppliers can participate and prepare for changes

All responses to the call for consultation are submitted via online survey, and suppliers are able to submit their response using this link. The consultation closes on 5 September 2025, giving more than two months to submit a response.

Following completion of the consultation, organisations may want to consider implementing changes to your bid strategy and business activities to ensure alignment with anticipated reforms. This includes (but is not limited to):

• Reviewing existing and future social value strategies to ensure these align with changes which could be introduced following the consultation period – for instance, contracting authorities specifying the area social value is to be delivered
• Analysing invoices to ensure compliance with the government’s proposed reforms, ensuring evidence is readily available to support your bid
• Begin calculating the percentage of SMEs within your wider supply chain to demonstrate alignment with potential requirements of the authorities themselves, similar to bid strategies of aligning with authorities’ carbon reduction targets.

We will continue to monitor outcomes of the public procurement consultation following its closure in September and will provide further guidance then.

Our position on the proposed reforms

As a large proportion of our client base are SMEs, we welcome the consideration of more stringent measures to integrate smaller businesses within their supply chain. The central government first set a target in 2015 for one-third of suppliers to be small- or medium-sized businesses, which has been repeatedly missed every subsequent year.

Firmer measures for contracting authorities regarding how they integrate smaller businesses in the supply chain will encourage more organisations to become suppliers to the public sector.

Equally, a renewed commitment to social value and – in some instances – compulsory social value commitments is also a good indicator. Although our initial analysis of the absence of social value in the Procurement Act detailed that it was likely to still be present in bidding, its inclusion as part of the public procurement consultation demonstrates it is still at the forefront of the government’s priorities in the tender process.

To discuss the bid and tender services we provide for live tender opportunities or arrange for a free, no-obligation 30 minute consultation call, contact our sales and marketing team today at info@executivecompass.co.uk or 0800 612 5563.