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Comment & Opinion

Procurement update: January 2026

“Late 2025/early 2026 has seen a number of procurement developments. In this article, we highlight some of the key issues on the procurement horizon.”

Kathryn Vickers, Director, Dispute Resolution

It’s still too early for any substantive case law on the Procurement Act, but late 2025/early 2026 has seen a number of other procurement developments:

  • New Thresholds: PPN 023 confirms the ever so slight reductions to the procurement thresholds for goods, services and works contracts which came into effect on 1 January 2026, under The Procurement Act 2023 (Threshold Amounts) (Amendment) Regulations 2025.
  • Keeping it local: The Local Government (Exclusion of Non-commercial Considerations) (England) Order 2026 came into force on 3 December 2025. This allows local authorities to reserve competitions for below threshold contracts to local and UK businesses, or to SMES or voluntary and community enterprises, provided they comply with the Order. The intention is to allow authorities to boost local business. Guidance has been published (applicable in England) to help authorities who want to do this comply with the requirements of the Order. This makes it clear that the Order is not intended to discourage competition where that would deliver better value for money. Authorities are still expected to act transparently and must still comply with their obligations under the Act in relation to below threshold contracts (for example in relation to notices and record keeping). The Order shouldn’t therefore be seen or used as a means for authorities to direct award to preferred suppliers.
  • Payment compliance: From 1 January 2026 contracting authorities are required to publish 6 monthly notices regarding their compliance with 30 day payment terms (section 69 of the Procurement Act), with the first notices due for publication in respect of the period 1 January 2026 to 31 March 2026 within 30 days of the end of that period (except Wales where the starting date is 1 April 2026). Guidance: Payments Compliance Notices (HTML) – GOV.UK includes detailed guidance on how compliance is calculated and reported under The Procurement Regulations 2024.
  • Contract Performance: From 1 January 2026, where KPIs have been set under section 52(1) of the Act, authorities are required to undertake assessments of performance against those KPIs annually and upon termination, and to publish details of that assessment (section 71). The requirement to publish details of a supplier’s breach of a public contract is also now in force. See Guidance: Contract Performance Notices (HTML) – GOV.UK. This is an important development as poor performance of public sector contracts will shortly become public knowledge. The risk of bad publicity could be used as a negotiating tool by authorities to leverage better performance or contract terms. Suppliers and authorities who are concerned about this should contact Kathryn Vickers or Lynsey Oakdene, Walker Morris’ procurement and dispute resolution specialists, for advice on how these notices might impact them.
  • Significant payments: From 1 April 2026 English authorities must issue quarterly notices in respect of any payment made under a public contract which exceeds £30,000. The Procurement Regulations don’t currently specify what detail needs to be included in such notices, but amendments and guidance on the topic are expected prior to 1 April 2026. Eyebrows might be raised and questions asked if authorities are making large payments which are more than would typically be expected.
  • Scottish procurement: On 20 December 2025, the Cross-Border Public Procurement (Miscellaneous Amendment) (Scotland) Regulations 2025 came into force. The regulations clarify that, for Scottish devolved authorities wanting to use a UK procurement arrangement under the Act, the Scottish procurement legislation which would otherwise apply is largely disapplied, and they must comply with the Act instead. Unfortunately, the same cannot be said for UK authorities wanting to use a Scottish procurement arrangement, who, for now, must comply with both the Act and the applicable Scottish legislation.

How we can support you

If you need support preparing for the Procurement Act or have any questions, please contact Kathryn Vickers.

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