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New public procurement thresholds for 2026 explained

AuthorsMichael Winder

3 min read

Procurement, Commercial & Contracts, Public Sector

Two men in business attire sit at a table, engaged in a serious discussion or signing a document in a modern office setting.

The UK Government has set out legislation that provides for the new minimum financial thresholds that will apply to public contracts and the application of the Procurement Act 2023 from 1 January 2026.

Here, public procurement specialist Michael Winder lays out the new thresholds and what you need to know.

 

When will the new procurement thresholds take effect?

The new thresholds are set out in The Procurement Act 2023 (Threshold Amounts) (Amendment) Regulations 2025, which were laid before Parliament on 21 November 2025. 

The Regulations are stated to come into effect on the 1 January 2026. From that date, the new minimum financial thresholds will apply to all new public procurements. Any public contract above the relevant threshold must be procured in-line with the relevant provisions of the Procurement Act.

Like the current thresholds, the new values are inclusive of VAT. This means that contracting authorities and utilities must calculate the relevant rate of VAT (where applicable) and add it to the value of the contract as part of the calculation regarding whether a particular requirement is above or below threshold.

 

What are the new public procurement thresholds?

Central Government bodies

 

All other contracting authorities

 

Utilities contracts

 

Concessions

 

More procurements in scope of Procurement Act

As you can see, in nearly all cases the minimum financial threshold — beyond which the majority of the provisions of the Procurement Act apply — has been reduced. This means that more procurements are likely to come within the scope of the main provisions of the Act. 

Even where there has been no change to the relevant threshold, the effect of the inflation since the last time that the thresholds were updated means that they’re more likely to be caught by the Act.

 

Existing tenders to use current thresholds

As part of the transitional provisions, the Regulations also clarify that existing tenders (above or below threshold) and/or direct awards should use the existing thresholds if they’re commenced before the date that the new minimum financial thresholds come into effect.

We’re also pleased to note that the changes made to the thresholds aren’t limited solely to updating the table in Schedule 1 of the Procurement Act but also take care to make the necessary changes to other relevant provisions within the Act where they reference a particular threshold.

All contracting authorities need to be aware of the new thresholds coming into effect from 1 January 2026 and apply them accordingly.

 

Talk to us

If you have any queries about whether the thresholds are likely to apply to your procurement, our ‘Top Tier’ procurement team is on-hand to provide the guidance you need.

We also advise on preparation, tendering, challenging, responding to challenges, awarding a contract or managing compliance, disputes and performance as well as compliance with the Procurement Act.

Give us a call on 0333 004 4488, email us at hello@brabners.com or complete the contact form below.

Michael Winder

Michael is a Partner in our commercial team. He leads our public procurement team.

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Michael Winder

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