Over 99% of UK businesses are small or medium-sized enterprises (SMEs). The Procurement Act 2023, which came into force on 24 February 2025, was written with that figure firmly in mind. For the first time, the UK’s public procurement rules are designed to open the door wider for smaller organisations rather than simply accommodate them as an afterthought.

The Act applies across much of the UK public sector, although Scotland continues to operate its own devolved procurement regime for many procurements, and some separate arrangements apply in Northern Ireland. UK government departments and arm’s length bodies operating across the UK are also in scope.

Before Brexit, UK procurement law was governed largely by EU legislation, most notably the Public Contracts Regulations 2015. Leaving the EU gave the UK greater flexibility to redesign its procurement framework while retaining many familiar principles from the previous regime. What emerged gives buyers more flexibility, gives SMEs more visibility, and places a stronger emphasis on value in its broadest sense.

Here are the main changes and what each one means in practice.

See What’s Coming: Pipeline Notices

Contracting authorities that spend more than £100 million in a financial year must now publish advance notice of planned procurements worth more than £2 million, covering an 18-month forward look. These Pipeline Notices are published on the government’s Find a Tender service.

Under the old regime, SMEs often found out about opportunities only when a tender was released, leaving little time to prepare. Pipeline Notices change that. Businesses can now see what is coming months in advance, plan resources, build relationships with buyers, and prepare their social value narratives before the clock starts ticking.

For any SME not yet registered on Find a Tender, that is the first practical step.

A Better Measure of Value: From MEAT to MAT

Section 19 of the Act replaces the Most Economically Advantageous Tender (MEAT) with the Most Advantageous Tender (MAT).

While MEAT already allowed buyers to consider quality and wider benefits alongside price, the shift to MAT reinforces that contracting authorities are not required to prioritise lowest cost. Buyers can place greater emphasis on broader public value and the outcomes they are trying to achieve.

Cabinet Office guidance is clear that this is not a move away from cost as a consideration. Rather, it is a recognition that public money should be assessed against a broader range of outcomes than price alone.

For SMEs, this helps level the playing field. The ability to demonstrate strong local impact, specialist expertise, innovation, and community commitment can now carry greater weight within evaluations.

Social Value Gets Serious

Social value has featured in public procurement since the Social Value Act 2012, but its application has often been inconsistent.

The Procurement Act strengthens accountability. For most contracts over £5 million, contracting authorities must set and publish at least three measurable Key Performance Indicators (KPIs). These KPIs may include social value commitments where relevant, alongside service delivery and operational performance measures.

Vague promises no longer carry the same weight. Buyers are increasingly expected to define what success looks like and how it will be measured.

The kinds of social value commitments that frequently feature include:

• Local employment and apprenticeship opportunities
• Investment in training and skills development
• Environmental commitments, such as carbon reduction targets
• Community investment and charitable partnerships

SMEs that operate locally, employ locally, and invest in their communities are often better placed than large national contractors to demonstrate genuine, measurable social value. The key is to articulate it clearly and support it with evidence.

Getting Paid on Time: New Payment Rules

Late payment has long been a challenge for small businesses operating within public sector supply chains.

The Act addresses this directly. Mandatory 30-day payment terms now apply throughout public sector supply chains, not simply between contracting authorities and prime contractors.

Alongside the Act, the government has also set a policy objective of paying 90% of valid SME invoices within five working days.

For a small business where a single delayed payment can create significant cash flow pressure, these changes provide meaningful protection.

The Debarment Register: Raising the Bar on Conduct

The Act introduces a Central Debarment Register, managed by the Debarment Review Service and published on GOV.UK.

A supplier placed on the register for a mandatory exclusion ground may be prevented from bidding for, or being awarded, public contracts for up to five years.

Grounds for debarment include:

• Serious misconduct
• Poor performance on previous public contracts
• Competition law infringements
• Threats to national security

A formal investigation must take place before a supplier is added to the register, and suppliers must be given the opportunity to make representations.

Shortly after the Act came into force, the government announced its intention to investigate several contractors linked to the Grenfell Tower tragedy for potential debarment.

For SMEs, the Debarment Register serves as a reminder that conduct and performance on public contracts can have consequences that extend far beyond a single contract.

More Routes In: SMEs and Large Contracts

The government’s ambition is to direct one pound in every three of public procurement spend to SMEs, either directly or through supply chains.

From April 2025, all central government departments and their arm’s length bodies must set and publish three-year targets for direct SME spend, alongside annual progress reporting.

The Act also encourages contracting authorities to consider whether large contracts should be divided into smaller lots. This can make it possible for specialist SMEs to bid directly rather than participate only as subcontractors.

This trend is already visible across several sectors, particularly technology and professional services, where buyers increasingly expect prime contractors to demonstrate how SMEs will be involved in delivery.

For specialist businesses with niche expertise, this creates opportunities that previously may have been out of reach.

The Door Is Open Now

If your business has not yet engaged with public sector procurement, or if you have tried in the past and found the process difficult to navigate, the position today is genuinely different.

February 2025 was not a deadline that has passed. The changes introduced by the Act are cumulative, and the benefits for SMEs are likely to increase as buyers become more familiar with the new rules and as the pipeline of opportunities grows.

To get started:

• Register on Find a Tender and set up alerts for relevant opportunities in your sector.
• Build a clear, evidence-based social value narrative that links your activities to measurable community or environmental outcomes.
• Understand the MAT framework and how to communicate the value your business delivers beyond price.
• Engage with buyers before tenders are published by attending Meet the Buyer events and connecting with procurement teams.
• Review your payment terms and ensure 30-day requirements are reflected throughout your contracts and supply chain arrangements.
• If you are new to public sector bidding, seek professional support early in the process.

SMEs now have greater visibility of opportunities, stronger payment protections, and a procurement framework that places more emphasis on value than ever before.

The opportunities are building. The time to engage is now.