Transforming Public Procurement: new public procurement reforms announced

A special edition of the Transforming Public Procurement stakeholder update, shared with members on behalf of the Cabinet Office

Yesterday, Cabinet Office Parliamentary Secretary Chris Ward MP announced a package of new measures to ensure that the £400 billion spent annually by the public sector works harder to support British jobs, skills, and national security - to help ensure it plays its full role in delivering the modern Industrial Strategy and fostering a resilient economy.

The announcement follows last year’s public consultation Growing British industry, jobs and skills and follows on from the introduction of the Procurement Act 2023 in February 2025. You can read the official Government consultation response, which was also published yesterday, here.

In summary, the package comprises a series of measures to bolster the UK’s sovereign resilience:

• National Security: The Government will publish new guidance for central government organisations procuring from the steel, shipbuilding, AI and energy infrastructure sectors regarding the appropriate use of national security exemptions to secure supply chains.
• Steel: There will be new transparency requirements to confirm the use of UK steel at the point of contract award or provide a robust justification if the steel is to be sourced from overseas.
• Shipbuilding: The Government is working with the Government’s National Shipbuilding Office to explore a new commercial framework for shipbuilding with a predictable pipeline of work for domestic shipyards.

The Minister also announced the Government's intention to introduce a new Public Interest Test for central government organisations to assess whether outsourced service contracts over £1 million could be delivered more effectively in-house; to introduce secondary legislation to reinstate the "Two-Tier Code" - to protect the pay and conditions of workers on outsourced contracts and ensure the public sector remains an exemplar of fair work; and redefine the definition of social value to ensure commercial practitioners put meaningful, community-led benefits at the heart of procurement and  deliver jobs, skills and opportunities to those facing barriers to employment.

The Government will also introduce a package of AI tools to streamline procurement and reduce the burden on both commercial practitioners and suppliers. This includes tools to quality assure and generate commercial documents, streamlined terms and conditions, and enhanced integration for bidding platforms to ensure SMEs won’t need to provide the same data twice.

You can read the Cabinet Office press release announcing the measures here.

Guidance to support practitioners and suppliers in implementing these measures will be published in summer.