This article explains how to determine whether the Procurement Act 2023 applies to your public sector organisation. Please fill in the form and one of our procurement experts will be in touch to help you navigate your compliance obligations.
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With the introduction of the Procurement Act 2023 (PA 2023), many organisations are asking a key question: does the new procurement legislation apply to us? While the language in the Act has evolved, the scope of who is covered has remained largely the same. In this article, Guy Stapleford, Head of Consultancy at Inprova, outlines the key tests used to determine whether an organisation is a “contracting authority” under the new regime and highlights how this applies in practice – particularly for local authorities, education providers, and higher education institutions, NHS bodies and housing associations.
The definition of a contracting authority under PA 2023 has not materially changed. While the Act now uses the term “a public authority” instead of the previous wording “body governed by public law”, the underlying scope remains consistent.
In practical terms, if your organisation was subject to the previous procurement rules, it is highly likely that it remains covered under the new regime.
To assess whether your organisation falls under PA 2023, there are three core tests to consider:
The Cabinet Office guidance confirms that these tests are intended to capture the same range of contracting authorities as before. Therefore, for most organisations, there is no practical change in coverage.
Local authorities remain firmly within the scope of the Act. As primary commissioners of public services, they are subject to the full suite of procurement obligations. The Act’s emphasis on transparency, value for money, and competitive tendering aligns with local government priorities, especially in areas such as social care, infrastructure, and community development. However, the new regime also introduces opportunities for simplification and innovation, particularly through the use of dynamic markets and open frameworks.
NHS Bodies, including NHS Trusts and Integrated Care Boards (ICBs), are also covered under PA 2023. Given the scale and complexity of NHS procurement, the Act’s provisions around transparency and competitive processes are particularly relevant. The NHS will need to ensure that procurement decisions – especially those involving clinical services, digital transformation, and estates – are compliant with the new rules. There is also growing interest in how the Act supports collaboration across health and social care, enabling more joined-up commissioning.
Education providers, including schools and Multi Academy Trusts (MATs), are subject to the Act. However, the Act introduces exemptions for these bodies, particularly regarding below-threshold procurements. Schools are also exempt from some transparency requirements, such as the need to publish details of contract payments above certain values.
Higher Education Institutions (HEIs) – such as universities- present a more complex picture. Some HEIs may argue they are outside the regime due to an increasing proportion of private funding. However, this may carry risks. For example, HEIs that have declared themselves to be outside the scope have found themselves excluded from recent rounds of government funding, such as the Public Sector Decarbonisation Scheme.
Additionally, the Cabinet Office has recently indicated that only contracting authorities will be able to register and advertise tenders on Find a Tender, the UK’s platform for public contract opportunities. This change may reduce visibility for HEIs that are not recognised as contracting authorities under the Act.
Housing associations will continue to be subject to the Act, as they are categorised as “Registered Providers” and meet the definition of contracting authorities. However, their commercial subsidiaries are generally exempt. That said, if such subsidiaries award contracts as part of a group structure without competition, they must comply with the Act when subcontracting.
While the Procurement Act 2023 introduces some updated terminology and clarifications, its practical effect on who is covered is minimal. If your organisation was previously subject to procurement rules, it almost certainly still is. The three-part test – looking at funding, oversight, and commercial activity – remains the key measure.
Organisations in sectors such as education and housing should assess their status carefully and seek advice where needed. Being considered outside the regime may offer flexibility, but it can also lead to unintended consequences, such as reduced access to public funding or procurement platforms.
Understanding your position now will help ensure compliance – and avoid surprises – under the new Act.
