The Government publishes the new National Procurement Policy Statement

Rather excitingly, and as a sort of warm-up to the main event in 10 days' time (the "go live" of the Procurement Act 2023 on 24th February 2024), the Government has published the new National Procurement Policy Statement (the NPPS).

Framed in the same language as its Mission-based objectives, this new NPPS recognises the power that procurement has to help position the entire public-sector purse behind its overall Missions,  primarily by securing value for money but also by requiring contracting authorities and their outsourced contractors to:

• Kickstart economic growth through: by providing opportunities for small businesses and social enterprises across the country; offering high quality jobs that offer fair wages and good working conditions; and encouraging innovation and the development of new technologies in line with the Industrial Strategy. 
• Make Britain a clean energy superpower through: accelerating to net zero, reducing greenhouse gas emissions in line with the UK national carbon budget, minimising waste, supporting delivery of clean power by 2030, and promoting the use of green technologies; and taking account of environmental risks and ensuring suppliers are committed to high environmental standards and protecting natural habitats and biodiversity. 
• Take back our streets through: reducing crime by providing support to organisations that strengthen community cohesion, awareness raising and action; and encouraging suppliers to recruit from groups that struggle to access employment opportunities. 
• Break down barriers to opportunity through: addressing specific skills gaps and facilitating access to training and other development opportunities; and removing barriers to entry for young people and under-represented groups, including people with protected characteristics and care leavers. 
• Build a National Health Service fit for the future through: supporting good physical and mental health by providing high quality jobs and encouraging suppliers to recruit from economically inactive cohorts.

Who does it apply to?

The NPPS applies to pretty much all "contracting authorities". There are a few exclusions to both authorities and the contracts which they procure. These include: private utilities; contracts awarded under a framework or dynamic market; procurements under devolved Welsh or transferred Northern Irish procurement arrangements; devolved Welsh authorities or transferred Northern Irish authorities, contracts which are exempt from the Act under Schedule 2.

What does the NPPS require contracting authorities to do?

The NPPS includes obligations on contracting authorities to secure value for money, drive economic growth and deliver economic and social value by:

1. Maximising procurement spend with SMEs and VCSEs, including fair working conditions, appropriate pay, progression and provision of skills opportunities throughout the commercial lifecycle.
2. Ensuring suppliers are committed to similarly providing high quality jobs, safe and healthy working conditions, fair pay, opportunity and progression for workers.
3. Working collaboratively across policy, delivery and commercial functions to develop a ‘pro-innovation mindset’, defining challenges to solve rather than solutions to buy adopting innovation where possible and provide good quality jobs, increase the commercial capacity and standards in procurement practice and collaborate across organisations and other contracting authorities to deliver best value. 
4. Balancing the delivery of the national missions and priorities in local and regional economic growth plans (where available), working in partnership with other contracting authorities, the private sector and civil society in the exercise of their procurement functions.
5. Acting with integrity, and adopting ethical conduct and environmental sustainability principles in business practices and demanding those from suppliers delivering public contracts (including the procurement of food which should include higher environmental standards). 
6. Ensuring suppliers are actively working to: tackle bribery, corruption, fraud, modern slavery and human rights violations, consider environmental impact (including reducing greenhouse gas emissions and minimising waste in their operations); comply with their tax, employment law and other legal obligations, and stamp out late payment of invoices in their supply chains. 
7. Applying commercial best practice including the principles and policies in the Government’s Playbook series (where appropriate – only to be considered by central government on a "comply or explain" basis at present) and make decisions based on value for money and service quality when assessing delivery models and outsourcing decisions. 
8. Benchmarking their organisational capability and workforce capacity to ensure they have the appropriate procurement and contract management skills and capacity necessary to deliver value for money. Using collaborative procurement arrangements and processes where appropriate (subject to a value for money test and a check as to the fees and charges levied).

As is clear from the above, there is a lot to unpack in the NPPS – it is ambitious and busy and highlights the central position procurement holds in enabling the public sector to create and secure good commercial outcomes. 

There is more to come and the accompanying Ministerial Statement points towards the new Industrial Strategy, a new Social Value Model, a new Commercial Innovation Hub, revamped Playbooks, a new Digital Commercial Centre of Excellence, and a Procurement Act 2.0: with a future consultation on further reforms to "drive economic growth, support small businesses, and better support innovation" promised soon: watch this space!