The Procurement Act 2023: Community Wealth Building Gets Its Foot in the Door
It is not every day that socio-economic legislation makes me feel hopeful. I sat with David Freud, making the tea and nipping out for hobnobs as he destroyed support for unemployed people, designing “The Work Programme” that included all the controversial fake work tests on people with disabilities and all the horror of sanctions as suffered by the star of Ken Loaches’ “I Daniel Blake”…..
But the Procurement Act 2023, which only became “live” 4 months ago, represents our chance to be part of the overhaul of tendering procedures. It quietly introduces a legislative framework through which Community Wealth Building can become central to the mainstream local economy.
What’s new about it then – I’m getting bored already….
Most significantly, the Act compels public bodies to do something previously treated as either a favour or a nuisance: talk to people before they buy things. Under Section 16, authorities are expressly permitted and encouraged to undertake pre-market engagement. According to the official guidance:
“Contracting authorities are encouraged to undertake preliminary market engagement... to better understand the capacity of the market and how best to procure.” (Source: Cabinet Office, Procurement Policy Note 01/24)
For the first time, this is not optional theatre for those who like supplier engagement events with cheap copies of hobnobs. Authorities must now consider early discussions with suppliers, SMEs, VCSEs and the wider community. In effect, doors that were previously labelled ‘Procurement: Staff Only’ are now legally wedged open. For local businesses, co-operatives, this is an opportunity not merely to apply for contracts but to shape them at source.
Moreover, Section 93 of the Act introduces a new duty:
“A contracting authority must publish an annual pipeline of anticipated procurements with an estimated value exceeding £2 million.”
This is not a vague aspiration buried in an appendix—it is mandatory. It compels authorities to offer forward visibility to suppliers, allowing local organisations the time to build capacity, build cooperatives, or simply prepare their bid. For CWB advocates, this removes one of the largest barriers to market entry: the sheer unpredictability of when and how, tenders will emerge - and what to do when they do.
The National Procurement Policy Statement further reinforces this shift. It requires authorities to prioritise:
“Creating new businesses, jobs and skills; improving supplier diversity, innovation and resilience.” — a formalisation of objectives long championed by Jamie Driscoll, and by Preston and Salford Councils.
The Tenders are now no longer judged against MEAT but now MAT (Most Advantageous Tender) is not just a terminological downgrade. It formally allows value to be interpreted beyond mere price, bringing in all our lovely LM3 arguments
https://www.nefconsulting.com/what-we-do/evaluation-impact-assessment/local-multiplier-3/
that go like this:
“Give national chain companies, or large cooperations based in London the contact for cleaning schools in Newcastle, the 30% profit paid for by Newcastle Council, goes either overseas of down to London, spend it on a local cooperative of cleaners in Newcastle, then money get re-circulated in local shops, services, pubs, cinemas, events etc – which is “Most Economically Advantageous” to Newcastle Council?”
I do this for a living and am enjoying tormenting procurement teams across the UK and beyond UK territories (Falklands and everything) ever since this change to the rules. Basically, for us, it legitimises councils to now weigh local employment, environmental gain, or local reinvestment into their award decisions. This is not, in short, about spending less. It is about spending better. Don’t underestimate this – Newcastle Council for example, had a single framework alone I bid for last year worth £347 million, and Newcastle Council procurement portals list over 300 tender notices in the past year – that’s not to mention local NHS, University, MOD, MOJ, Home Office, Housing, etc procurement opportunities. If Community Wealth Building is what we want to do – we need to be the bridge between local self employed people, local charities, local SMEs, local coops and prove, as we know is true, this is where local people can have a stake in the local economy. The New Procurement Act gives us a lever and laminated timetable. And frankly, in a political climate where hope often comes pre-shrunk, in tandem with political growth, a pilot project delivering positive economic action from Majority, might be a way forward to build our economic credentials.
Sounds…er….. great – how would it work?
Like this!
https://www.dropbox.com/scl/fi/y3f81pe2oyh0jg4mv24xy/A-ficticious-example-of-how-it-could-work-Majority-Cooperative-Newcastle.docx?rlkey=tszxq6ayvowjkauo2i6x8t7hn&st=t1angit6&dl=0