UK Universities Face Legal and Practical Shifts Under the New Procurement Act

Procurement Act 2023 Introduces Opportunities and Challenges for HEIs

In February 2025, the Procurement Act 2023, aimed at regulating the awarding of public, utility, concession, and defence contracts, came into effect. This landmark legislation has introduced significant changes to public procurement processes across England, Wales, and Northern Ireland. By offering greater flexibility to ‘contracting authorities’ in conducting competitive award procedures, the Act represents a transformative shift in UK procurement policies.

Although the government has heralded this new framework as the “largest shake-up to UK procurement rules in history,” public procurement expert Uddalak Datta from Pinsent Masons highlighted certain concerns. He explained that while the reforms are ambitious, they have created uncertainties, particularly within the higher education sector. These questions center on how the new regime will affect universities, which have increasingly asserted their reliance on private funding.

Datta further elaborated that most higher education institutions (HEIs) assume the definition of ‘contracting authority’ under the Procurement Act will align with that in the previous regime. Consequently, HEIs expect that organizations subject to the old procurement rules will continue to be governed under the new Act. However, Chris Owens, a universities expert at Pinsent Masons, noted that while the government clarified there is no intention to redefine what qualifies as a ‘contracting authority,’ the courts may interpret the law differently. This ambiguity has left room for interpretation and potential challenges.

Owens emphasised that the new regime introduces greater flexibility, including post-tender negotiations and discussions with preferred suppliers, which marks a significant shift in how HEIs negotiate agreements. While universities may be tempted to down-select a single preferred bidder, which could streamline processes and reduce costs, Owens cautioned that this approach must be balanced against the risks of legal challenges and the need to ensure fairness among bidders. Moreover, Owens advised that HEIs not directly governed by the Procurement Act may still experience "indirect" impacts and should closely monitor developments. He explained that while complex procurement processes, such as those for student accommodation schemes, are expected to rely on procedures similar to the previous competitive dialogue in the short term, there is potential for innovative approaches and efficiency improvements. He suggested that HEIs operating outside the Act's scope could benefit by observing emerging trends and applying those lessons.

However, Owens also highlighted certain challenges for HEIs outside the Act’s scope. For example, the Cabinet Office recently indicated that entities not defined as contracting authorities would no longer be able to register or publish tenders on the UK government's Find a Tender platform, which is used for high-value contracts. Under the previous regime, some universities had used this platform to increase visibility for larger opportunities. This change will compel affected HEIs to explore alternative routes for tender publication and strengthen pre-procurement engagement or soft market testing.

Furthermore, Uddalak Datta pointed out the practical difficulties faced by HEIs excluded from the Public Sector Decarbonisation Scheme funding, which reflects some of the broader challenges these institutions may encounter. As the higher education sector continues to adapt to the new procurement rules, universities must address these evolving issues to mitigate risks and seize potential opportunities.

Editor's Note:

The Procurement Act 2023, which came into effect in February 2025, represents a sweeping reform of public procurement processes across England, Wales, and Northern Ireland. While the government has presented it as a major step forward in enhancing flexibility for contracting authorities, experts have raised concerns about its impact on higher education institutions (HEIs). Both Uddalak Datta and Chris Owens from Pinsent Masons have drawn attention to the uncertainties surrounding the Act’s implications for universities, particularly regarding legal challenges, tender publication, and access to funding schemes. As HEIs navigate this new era in public procurement, they must remain vigilant in tracking emerging trends and adapting their strategies accordingly. The evolving landscape demands careful attention to balancing efficiency, fairness, and legal compliance.

According to Skoobuzz, how universities respond to these challenges will ultimately determine their ability to capitalize on the opportunities brought by this transformative legislation.