UK public procurement 2027: Process, challenges & strategy

Public procurement is one of the most critical activities in the public sector. Billions of pounds are spent by public bodies like government departments, local authorities and NHS trusts to secure the goods and services required to keep the country running. For UK organisations in 2026, the challenge isn’t just staying compliant but also managing the operational complexity that comes with it.

On paper, public procurement is clearly structured and strictly regulated. In practice, it’s easy to lose sight of the myriad factors that come into play, from maverick spend and legislation reforms to responsible purchasing goals and more.

To prevent risk and ensure sustainable growth, UK procurement teams across the private and public sectors must stay abreast of shifting regulations and focus on transforming fragmented, decentralised purchasing activities into managed spend that’s controlled, visible and compliant.

What public procurement is and why it matters

Public procurement is the process that defines how public sector organisations like the NHS, the police force and central government departments purchase goods, works and services. It accounts for roughly one third of all public sector spending, according to the UK House of Commons, and covers everything from IT equipment and office supplies to major infrastructure projects and services secured by outsourcing to the private sector.

For UK organisations and citizens, public procurement matters because:

• It determines which suppliers can access government contracts

• It directly impacts the quality and efficiency of the public services taxpayers pay for

• It’s a financial lever for broader policy targets like sustainability, social value and economic growth goals

The House of Commons also estimates that in the 2025/26 financial year, gross public sector procurement spending increased by 5% (£23 billion) year over year. The sheer scale of public spending makes it one of the most important economic functions in the country.

UK public procurement rules and regulations

UK public procurement rules and regulations govern how contracting authorities must manage and award public contracts. Their purpose is to prevent discrimination and ensure transparency and value for money across public spending.

On 24 February 2025, the Procurement Act 2023 and the associated Procurement Regulations 2024 came into force, replacing the Public Contracts Regulations 2015, the Utilities Contracts Regulation 2016, the Concession Contracts Regulations 2016, and the Defence and Security Public Contracts Regulations 2011. This marks the most significant change to UK public procurement in recent years, providing a single, consolidated framework for contracting authorities.

Some of key procurement reforms under the new Act include:

• Simplified tendering procedures: The new ‘competitive flexible’ procedure provides more freedom in how contracting authorities design their procurement processes

• Greater supply chain transparency: All procurement activities must now be published on a central digital platform to make public sector procurement more accessible to new bidders

• Improved SME access: Contracting authorities must consider the barriers that prevent small and medium-sized enterprises (SMEs) from being awarded contracts and reduce them where possible

• A National Procurement Policy Statement (NPPS): A clear outline of the government’s strategic priorities that public buyers must ‘have regard to’ when procuring goods, works or services

The Procurement Act 2023 is being implemented through the UK government’s Transforming Public Procurement programme, an initiative that aims to improve public procurement regulation through simplicity, flexibility, accessibility and transparency.

Public procurement regulations are constantly evolving, and UK organisations need to evolve with them. In practice, this means establishing better visibility, controls and policies that align with the growing expectations for public procurement.

Stages of the public procurement process

The public procurement process follows a structured lifecycle that looks the same across most organisations and industries. Identifying areas for improvement at each stage in this process can help you avoid disruptions, unnecessary costs and missed opportunities.

1. Identifying needs and planning purchases

To begin the public procurement process, contracting authorities must determine what’s required, what’s available to meet that need and what it will cost. This involves calculating the total cost of ownership and aligning the requirement with organisational procurement goals and policies.

2. Sourcing suppliers and issuing tenders

After confirming a need, organisations must follow the appropriate procedure, whether open or ‘competitive flexible,’ as defined by the Procurement Act 2023. Covered procurement opportunities must be published on the Find a Tender service website, where bidders can submit tenders. All bids must be evaluated fairly and consistently to comply with the latest regulations.

3. Evaluating bids and awarding contracts

Contracting authorities must assess tenders against criteria based on the type of opportunity. The Procurement Act 2023 stipulates that assessments should focus on the best value for the contracting authority and wider public benefit. Contracting authorities must now provide assessment summaries to all bidders after awarding a public sector contract to improve transparency for unsuccessful tenders.

4. Managing contracts and suppliers

Once a contract has been awarded, the buyer must effectively manage both the contract and the supplier relationship throughout the procurement lifecycle to support delivery, risk management and accountability. The Procurement Act 2023 requires new transparency notices at specific milestones in the contract management process.

Challenges in public procurement workflows

While robust procurement policies and structured regulation help ensure compliant purchasing, the operational reality is often messy and filled with challenges. Some of the most common day-to-day problems faced by procurement teams include:

• Decentralised purchasing and maverick spend: Without central visibility across departments or locations, employees often purchase outside of agreed contracts. This leads to missed savings opportunities and opaque purchasing data

• Limited visibility across teams: wWhen spending is spread across different systems and departments, it’s harder to track purchasing and supplier data. This affects compliance and cost savings

• Complex approval workflows and delays: Complicated approval chains slow down purchasing. If it’s harder to follow approval policies than buy from unauthorised channels, employees are more likely to rely on non-compliant workarounds

• Difficulty enforcing procurement policies: Policy enforcement often fails when the policy is recorded on paper but not embedded into organisation-wide purchasing controls, especially for urgent purchases

• Outdated systems and fragmented supply chains: Public sector organisations using legacy procurement software that doesn’t integrate with modern e-procurement tools may struggle to provide the data required to make smart decisions and meet regulatory requirements.

For public sector organisations, delivering for SMEs remains another key challenge. Only 20% of public sector procurement spend went to SMEs in 2024, barely up from 2023 (19%) and the same as it was in 2019. While total spending continues to grow, the proportion of spending is stagnating despite new regulations in the Procurement Act 2023.

How to improve efficiency and compliance

Improvements in public procurement can be made with practical changes that target compliance, visibility and control often make a huge difference. Here are five actionable ways to increase efficiency in public procurement:

• Centralise purchasing to strengthen control: Consolidate all procurement activity into a single system to simplify policy enforcement, increase spend tracking accuracy and enable the use of data to negotiate better terms with suppliers

• Standardise your approval workflows: Establish clear, consistent and easy-to-follow approval processes to reduce delays and prevent unauthorised spending before it happens

• Use data to improve spend visibility: Implement real-time spend reporting across categories, buying groups and suppliers to more easily identify maverick spend, prevent duplicate suppliers or purchases and show accountability to stakeholders

• Align procurement with organisational goals: Go beyond cost savings when focusing your procurement strategy to also consider social value, sustainability and supply chain resilience

• Invest in training and change management: Ensure teams understand why policies exist, how to correctly use new tools and how to follow specific purchasing rules in practice

Digital procurement sits at the heart of these opportunities. To keep up with the latest regulations and competitive landscape, public sector organisations must modernise how they approach procurement in the UK.

Smarter public procurement with digital tools

Amazon Business solutions are designed to manage the complexity of modern public procurement, with tools that may help contracting authorities buy more responsibly and more efficiently while meeting compliance requirements.

Guiding compliant purchasing decisions

Guided Buying helps you set purchasing policies that automatically direct employees towards preferred suppliers and approved products during the buying experience. It takes the onus off staff to remember the rules and makes the compliant path the easiest one, which reduces maverick spend and supports compliance across the organisation.

Gaining visibility into organisational spend

Spend Visibility gives you pre-built and customisable reporting dashboards that provide a clear view of what’s being purchased, who is purchasing it and how much it costs. For public sector bodies, this data is invaluable when demonstrating accountability for taxpayer money and is especially useful for internal governance, responsible sourcing and auditing purposes.

Simplifying purchasing across teams

By supporting multi-user accounts and providing group-level approval workflows and integrations with existing procurement systems, Amazon Business helps organisations maintain central oversight while still giving departments the flexibility to buy what they need when it’s needed. This is particularly relevant in highly regulated sectors like financial services, where maintaining clear audit trails and separation of duties is critical for compliance.

Supporting responsible purchasing goals

Amazon Business makes it easier for public sector organisations to embed social value into their procurement process, supporting responsible purchasing by providing access to certified local, diverse and sustainable suppliers. By highlighting these suppliers at the point of purchase, it helps organisations meet their social value and SME spend objectives in a practical way.

From compliance to controlled procurement

The importance of ensuring compliant, efficient buying can’t be understated. Mounting regulatory pressure and increasing complexity mean public procurement risk has never been higher.

While the Procurement Act 2023 has raised the bar for transparency and accountability, rules and frameworks aren’t enough to fix fragmented purchasing or broken procurement systems. But by investing in the right tools, workflows and policies, you can transform maverick spend and inefficient purchasing into controlled, managed spend.

Get in touch today to learn more about how Amazon Business can help your organisation centralise purchasing, improve spend visibility and support compliant buying across teams.

This article was created by professional writers and editors with the assistance of AI-powered tools. AI was used in a supportive capacity only – for example, to aid with translation, content review, and alignment with brand guidelines. All substantive research, editorial decisions, and final approval were performed exclusively by human authors and editors, who retain full editorial responsibility for this publication.