The Procurement Act 2023: A Double-Edged Sword for Civil Society

How new procurement rules could transform public services—if we get the implementation right

After decades of bureaucratic procurement processes that often shut out smaller charities and community organisations, the Procurement Act 2023 promises a revolution. Coming into force this February, the legislation aims to strip away the "complicated and bureaucratic EU rules" that have long frustrated both commissioners and civil society organisations. But will it deliver on its ambitious promises?

The Promise of Change

The Act's potential benefits for the voluntary, community, faith and social enterprise (VCFSE) sector are substantial. For the first time, 'maximising public benefit' is explicitly stated as a guiding purpose, aligning procurement law with the core mission of civil society organisations.

Perhaps most significantly, the legislation introduces genuine flexibility through its "Light Touch Regime." This gives commissioners full discretion to create procurement processes that are proportionate to their context and potential VCFSE providers, potentially ending the era of one-size-fits-all tendering processes that favoured large corporations over community groups.

The timing couldn't be better. The COVID-19 pandemic demonstrated the transformative benefits of collaborative approaches, with emergency grant programmes distributing £152 billion rapidly and effectively to voluntary organisations. The Act provides a legal framework to make such collaborative approaches the norm rather than the exception.

The Catch: Implementation Challenges

However, civil society leaders are cautiously optimistic rather than euphoric. The Act's success depends entirely on how it's implemented—and early signs suggest significant hurdles ahead.

The most pressing concern is cultural resistance within commissioning organisations. Years of risk-averse procurement practices have created a culture where "Fear leads to procedural overcompliance, with the result that procurement becomes disproportionate". Simply changing the law won't automatically change ingrained institutional behaviour.

Money matters too. Local authorities face "Financial challenges, particularly cuts to local authority spending power" that make it "hard to mitigate these consequences or have scope to explore new ways of working". Without adequate resources and training, commissioners may default to familiar competitive processes rather than embracing the Act's collaborative possibilities.

Power Imbalances Persist

The fundamental issue of power remains largely unaddressed. The guide to implementing the Act acknowledges that "The power disparity between commissioner and VCFSE is at its greatest" during procurement processes, and structural inequalities continue to disadvantage smaller, community-led organisations.

Moreover, whilst the Act enables more flexible approaches, it doesn't mandate them. This leaves room for traditional competitive tendering to continue dominating, particularly in risk-averse local authorities.

The Path Forward

The "Purposeful Collaboration" guide, developed by NAVCA, the Local Government Association, and Lloyd's Bank Foundation, offers a roadmap for realising the Act's potential. It advocates for trust-based relationships, genuine co-design with communities, and recognition that "outcomes for people and communities are understood as the result of complex systems of interrelated actors and actions".

Most crucially, it calls for a return to grant-making as a legitimate commissioning tool. The shift away from grants towards contracts in recent years has created unnecessary bureaucracy and excluded many smaller organisations.

The Bottom Line

The Procurement Act 2023 represents the most significant opportunity in a generation to reset the relationship between public services and civil society. Its strengthening of social value requirements and alignment with policy priorities creates genuine momentum for change.

But legislation alone won't transform entrenched practices. Success will require commissioners to embrace risk, invest in relationships, and recognise that the most effective public services often emerge from genuine partnership with communities rather than competitive markets.

The Act provides the tools—now we need the courage to use them.