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The UK Government has set out legislation that provides for new minimum financial thresholds to apply to public procurement law from 1 January 2024.
Here, Partner and public procurement specialist Michael Winder and Graduate Solicitor Apprentice Samantha Thompson explain how the new thresholds work.
When will new procurement thresholds take effect?
The Public Procurement (Agreement on Government Procurement) (Thresholds) (Amendment) Regulations 2023 will come into force on 1 January 2024, at which time the new minimum financial thresholds will apply. Any public contract above the relevant threshold must be procured in-line with public procurement law.
As with the current thresholds, it’s important to remember that the new values will be inclusive of VAT. This means that contracting authorities must consider whether their requirement is subject to VAT (and if so, at what rate) before calculating whether a particular requirement is above or below the threshold.
What are the new public procurement thresholds?
Public Contracts Regulations 2015
Central Government bodies:
- Supplies: £139,688 (currently £138,760)
- Services: £139,688 (currently £138,760)
- Works: £5,372,609 (currently £5,336,937)
Other contracting authorities:
- Supplies: £214,904 (currently £213,477)
- Services: £214,904 (currently £213,477)
- Works: £5,372,609 (currently £5,336,937)
The threshold for Light Touch (Social and Similar Services) hasn’t changed and is set at £663,540.
Utilities Contract Regulations 2016
All sectors:
- Supplies: £429,809 (currently £426,955)
- Services: £429,809 (currently £426,955)
- Works: £5,372,609 (currently £5,336,937)
The threshold for Light Touch (Social and Similar Services) hasn’t changed and is set at £884,720.
Concession Contracts Regulations 2016
All sectors:
- Concession contracts: £5,372,609 (inclusive of VAT) — (currently £5,336,937).
Procurement Act 2023
The long-awaited Procurement Act 2023 recently received Royal Assent and will come into effect from October 2024.
The final Act (as passed) has now been published. However, Schedule 1 uses the existing thresholds when setting out the threshold amounts.
As such, if the intention is to incorporate the new thresholds into the new regime, secondary legislation will be needed to update the Act with the new thresholds — watch this space.
Looking for support on public procurement issues? Talk to us.
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