What is the National Procurement Policy Statement? (Procurement Act 2023)

On the 13th of February 2025, the Cabinet Office published a new National Procurement Policy Statement (NPPS) to lay out the strategic priorities for public procurement.

This article breaks down what the NPPS says, and what it means for public sector buyers and suppliers

Skip ahead to read about:

• What is the National Procurement Policy Statement?
• What does the National Procurement Policy Statement say?
• What does the National Procurement Policy Statement mean for buyers?
• What does the National Procurement Policy Statement mean for suppliers?
• Conclusion
  
  

This article is part of a series of articles on the 2023 Procurement Act. 

Head to Tussell's Procurement Act Hub for all the information and resources you need to get Procurement Act ready.

💭 What is the National Procurement Policy Statement?

Section 13 of the Procurement Act allows a Minister of the Crown to publish a statement outlining the government’s strategic priorities for procurement. This statement is known as the National Procurement Policy Statement (NPPS).

The NPPS sets out the government's key objectives for public procurement, guiding what it should aim to achieve and prioritize.

The first NPPS was introduced by the previous Conservative government. However, on February 13th, a new NPPS was published to align with the priorities of the newly elected Labour government.

This updated NPPS will take effect on February 24th, alongside the 2023 Procurement Act. It provides essential guidance for public sector contracting authorities in England.

However, the NPPS does not apply to:

• Private utilities

• Devolved Welsh authorities

• Transferred Northern Irish authorities

• Contracts awarded through a framework agreement or dynamic market
  

📜 What does the National Procurement Policy Statement say?

The National Procurement Policy Statement insists that public procurement must support the government's 5 key missions:

1. To kickstart economic growth;

2. To make Britain a clean energy superpower;

3. To reduce crime and strengthen communities;

4. To increase opportunities for young people and marginalised groups;

5. To build a future-proof NHS. 

In support of these aims, contracting authorities have been urged to:

Deliver value for money

This can be achieved by providing SMEs and VCSEs with an equitable opportunity in the procurement process, while prioritizing the delivery of both social and economic value.

Drive economic growth

Authorities should promote innovation and collaboration within procurement. They are also encouraged to maximize spending with VCSEs and SMEs, engage with the market earlier on in the procurement process, and ensure suppliers offer high-quality, safe, and fairly-compensated jobs.

Deliver social and economic value

The Cabinet Office urges buyers to deliver social and economic value by making sure suppliers are tackling corruption, fraud and poor environmental practices. It also encourages contracting authorities to consider national and local missions throughout the procurement process.

Deliver value & better outcomes

The Cabinet Office asks buyers to deliver value by ensuring procurement is kept fair and efficient. Best practice recommendations should also be observed and frameworks should be used when necessary.

🏛️ What does the National Procurement Policy Statement mean for buyers?

Section 13 of the Procurement Act states that in-scope contracting authorities "must have regard" for the NPPS in their procurement.

What this means in practical terms is a little unclear.

Section 13 implies that contracting authorities should be able to demonstrate that the NPPS' goals were considered as part of any given procurement - but that this expectation cannot be legally enforced.

One of the key currents running through the NPPS is the re-emergence of "social value" as a key priority for public sector procurement.

"Social value" as a term is notably absent from the Procurement Act itself.

This increased emphasis on social value reflects a clear shift in approach, likely influenced by Prime Minister Keir Starmer’s new Labour government.

Learn more about social value in public procurement

The NPPS also reaffirms the Procurement Act's MAT tendering policy, which dictates that the Most Advantageous Tender (MAT) should be prioritized in new procurements, rather than the Most Economically Advantageous Tender (MEAT).

In essence, this means procurement teams are encouraged to focus on acquiring better-quality outcomes, rather than merely opting for the cheapest options.

Now more than ever, the NPPS reaffirms how contracting authorities should prioritise working for VCSEs, SMEs, and local businesses with a proven track record of successfully working with the public sector.

The NPPS’ emphasis on innovation represents a shift in how the Cabinet Office is guiding contracting authorities in their procurement practices.

The introduction of the Competitive Flexible Procedure (CFP) gives authorities more flexibility in defining bidding criteria, while the new Preliminary Market Engagement (PME) Notice allows contracting authorities to consult the market before issuing a tender notice.

These changes, introduced under the Procurement Act, are designed to foster bold and innovative procurement practices.

Addressing significant challenges requires creative solutions. If you haven't already, now is the time to explore how the CFP and PME notices could support more innovative procurement within your category.

💼 What does the National Procurement Policy Statement mean for suppliers?

First and foremost, social value is crucial.

Buyers are being urged to collaborate with SMEs and VCSEs whenever possible.

If you’re an SME or VCSE, it’s time to make your presence known to public sector authorities in your area. And for larger suppliers, incorporating SMEs and VCSEs into your supply chain is highly recommended.

With social value now making up at least 10% of the bidding criteria, it’s essential to take social value seriously.

While social value objectives may vary by region and can sometimes be unclear, all bidding teams in 2025 must consider their environmental, social, and economic value credentials.

Discover Tussell and techUK's list of tech SMEs to look out for in 2025

The new NPPS also places a strong emphasis on innovation in procurement, although how this will be implemented in practice is yet to be fully seen.

If you’re a supplier with an innovative solution to public sector challenges, it’s advisable to actively engage in pre-tender discussions.

The first step to uncovering opportunities for pre-tender communication is to use a market intelligence tool like Tussell to identify PME notices that are relevant to your industry.

🌅 Conclusion

The Cabinet Office's new NPPS re-orients the government's priorities for public procurement.

Although not legally enforced, the NPPS could come to shape the conversation around what public procurement is fundamentally 'about', and what 'matters'.

Social value, innovation, and SME & VCSE are no longer optional nice-to-haves; how the public sector procures is going to have to change.

That means suppliers are going to need to change too.

Tussell is the market's trusted source of insight into UK public procurement, and is already being used by buyers all over the country to promote social value through procurement and save time and money in the procurement process.

Tussell is also used by over two-thirds of the UK's Strategic Suppliers to increase their social value offering, diversify their supply chains, and find more opportunities to do business with the public sector.

Book a demo with the Tussell team today to find out how you can start benefiting today.