Procurement Act 2023 | Governance and the Future of Sustainable Procurement

A New Era for Sustainable Procurement

Why Governance Will Decide the Success of the Procurement Act 2023

There’s no shortage of commentary on the Procurement Act 2023, the deadlines, the clauses, the reforms. What’s less discussed is what will make it work: governance.

The Act marks a defining shift in how the UK public sector buys goods, works, and services. It reframes procurement from a compliance exercise into a mission-led mechanism for delivering social, environmental, and economic outcomes. But without strong governance, transparent systems, capable leadership, and joined-up collaboration, even the best-intentioned policies risk becoming another layer of bureaucracy.

As the new regime comes into force on 24 February 2025, supported by the National Procurement Policy Statement, and the updated Social Value Model (PPN 02/24) applies to in-scope government contracts from October 2025, the question isn’t what the Act says, it’s how governance will make it work in practice.

ES"G" Governance of Public Procurement

The Procurement Act 2023 makes governance more than an administrative management review, it shifts it from the margins into the core of procurement practice.

Governance is the glue that holds ESG together — the “G” that keeps environmental and social ambition from collapsing under weak implementation or inconsistent oversight.

Under the Procurement Act 2023, governance is no longer administrative. It’s operational. Both buyers and suppliers will need robust frameworks to manage procurement risks, ensure transparency, and verify performance. Governance will now decide who wins, delivers, and sustains public contracts.

The Impact on Buyers

For contracting authorities, governance defines how strategy becomes delivery.

It means building procurement structures that align with sustainability, corporate responsibility, and risk management. Decisions must be transparent, data-driven, and auditable.

Procurement teams now have the flexibility to design tenders that deliver social, economic, and environmental value, encourage innovation, and strengthen local economies. But this flexibility comes with new expectations. Authorities will need capability to evaluate, monitor, and report on performance credibly. Overambitious or poorly specified criteria could deter competition or even trigger legal challenge.

Governance also underpins risk control. Poor social value delivery, inaccurate carbon reporting, or weak ethical compliance can expose public bodies to reputational and legal risk. The Public Debarment List (PRU's central debarment register) gives Ministers new powers to exclude non-compliant suppliers. This reinforces the need for strong oversight, from early market engagement to contract management.

The Impact on Suppliers

For suppliers, governance is fast becoming a pass/fail condition for market access.

For suppliers, particularly SMEs and social enterprises, governance is equally critical. Public buyers will expect credible evidence of responsible business practice, from carbon reduction plans and Fair Work policies to anti-slavery measures and ethical supply chains.

Strong governance will become a market differentiator. Those with mature ESG systems will gain advantage; others may find it harder to qualify. Compliance costs may rise, particularly where baseline data or impact measurement systems are lacking. Yet for progressive businesses, this is an opportunity to show that commitments are backed by systems, not slogans.

In short governance will separate those who say they deliver from those who prove they do.

Complementary Legislation

The Procurement Act does not stand alone, it’s reinforced by a growing body of legislation embedding accountability and transparency across sectors.

The Economic Crime and Corporate Transparency Act 2023 strengthens ethical governance and supply chain reporting. The Building Safety Act 2022 introduces statutory requirements for competence and accountability in construction, tying workforce training directly to safe and responsible delivery. The forthcoming Employment Rights Bill (still in consultation) is expected to enhance Fair Work duties, aligning employment standards with sustainable procurement practice.

Together, these measures create an environment where responsible procurement is both a legal expectation and a competitive advantage, defining integrity, transparency, and performance as core business values.

Governance Across the Devolved Nations and Beyond

While the Procurement Act 2023 applies primarily to England, procurement governance across Northern Ireland, Scotland, Wales, and the Republic of Ireland (EU) is evolving under distinct but increasingly aligned frameworks.

While governance expectations are converging, each nation’s procurement framework reflects its unique policy priorities.

Northern Ireland

The Executive’s four procurement principles, accessibility, efficiency, social value, and transparency, now form the governance baseline that both buyers and suppliers must meet.

The Public Procurement Policy Statement (June 2025) sets clear governance structures for transparency and accountability. It introduces interim mechanisms until a long-term model is finalised. Buyers must act in line with principles of fairness, proportionality, and public benefit under the Programme for Government and Economic Mission.

Suppliers must evidence community impact, fair work, and ethical practice under PPN 01/21 Social Value in Procurement (plus accompanying Procurement Policy Notes), which mandates a minimum 10% weighting for social value in relevant tenders. The Executive’s four principles, accessibility, efficiency, social value, and transparency, form the governance baseline for all public contracts.

Scotland

Those bidding across borders must balance Scotland’s Best Value framework with the Most Advantageous Tender principle under the UK Act, requiring flexible assurance and reporting systems.

In Scotland, the Procurement Reform (Scotland) Act 2014 and accompanying Scottish Procurement Policy Notes creates one of the most mature and transparent procurement systems in Europe. Buyers are accountable for embedding Fair Work First, Climate and Circular Economy, and Community Wealth Building (Scotland Bill) objectives into every contract, ensuring that sustainability and ethical delivery are monitored and reported. Sellers must demonstrate governance maturity by aligning with Fair Work criteria and evidencing compliance with environmental and community outcomes.

Wales

The Welsh model is highly relational, it expects joint accountability between public sector clients and their supply chains to deliver long-term community benefit.

Public procurement in Wales is designed to promote shared accountability. The Well-being of Future Generations (Wales) Act 2015 and the Social Partnership and Public Procurement (Wales) Act 2023 make sustainable development and collaboration statutory duties. Buyers are required to engage with workers and trade unions through the Social Partnership Council to ensure fair work and ethical supply chains. For sellers, this governance structure demands openness, continuous improvement, and social partnership compliance as part of tender evaluation.

Republic of Ireland

While In Ireland there is no direct equivalent to the UK Procurement Act, its governance is grounded in EU transparency and ESG reporting under CSRD, mirroring the same accountability objectives.

In the Republic of Ireland (EU), compliance is with EU procurement law. The Office of Government Procurement (OGP) oversees delivery under the Green Public Procurement Strategy 2024–2027 and Circular 17/2025, requiring environmental and social considerations in all public tenders. Buyers are responsible for demonstrating due diligence on life-cycle carbon, ethical sourcing, and transparency in contract management. Sellers must evidence EU-level governance alignment, from traceable supply chains and carbon accounting to social inclusion measures.

Final Thoughts

For both buyers and sellers, governance is now the defining factor in responsible procurement, and the true test of the Procurement Act 2023 in practice.

Across the UK and Ireland, procurement is increasingly judged by transparency, ethical integrity, and measurable outcomes. Practices once considered progressive such as, supplier diversity, carbon accounting, community wealth building, are fast becoming standard expectations. As data-driven reporting increases, the risks of greenwashing and social washing will be exposed.

For organisations with a mature ESG approach, or those ready to adapt, this is an opportunity to lead. They will gain competitive and financial advantage while setting the benchmark for credible delivery. Governance will be the differentiator between those who create real impact and those who merely talk about it.

Ultimately, success for both buyers and suppliers will depend on governance frameworks that are flexible, auditable, and capable of proving sustainable outcomes wherever they operate.

If you’d like to explore how Responsible Solutions can help your organisation become more competitive contact me at shauna@responsiblesolutions.co.uk.

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