Explainer
The Procurement Act 2023 has governed public procurement since 24 February 2025. Here are the thresholds in force from 1 January 2026, the below threshold rules, the Central Digital Platform and the new social value model.
By Christopher Fagan, Managing Partner, PEF Consulting Partners
The Procurement Act 2023 replaced the Public Contracts Regulations 2015 and the related regulations for procurements started from 24 February 2025. It brings more flexible procedures, a single Central Digital Platform for notices, new transparency duties and a debarment regime.
| Contract type | Threshold, including VAT |
|---|---|
| Central government goods and services | £135,018 |
| Sub central goods and services | £207,720 |
| Works | £5,193,000 |
| Light touch services | £663,540 |
| Utilities goods and services | £415,440 |
| Utilities works | £5,193,000 |
| Utilities light touch services | £884,720 |
| Defence and security goods and services | £415,440 |
| Defence and security works | £5,193,000 |
Under the Act, thresholds are stated including VAT.
Regulated below threshold contracts start at £12,000 for central government, which now includes NHS trusts, and £30,000 for other contracting authorities, including VAT. If such a contract is advertised, a tender notice must go on the Central Digital Platform first, and a contract details notice follows the award. A separate suitability stage before tenders is not allowed.
The Central Digital Platform is the Find a Tender service. It is free, carries all the notices required under the Act and lets suppliers register once and store their core information for every bid.
PPN 002 requires central government departments, executive agencies and non departmental public bodies to give social value at least 10% of the total score on above threshold procurements, mandatory from 1 October 2025, using five missions: growth, clean energy, safer streets, opportunity and the NHS. PPN 026, published in August 2026, replaces it for procurements starting from 1 January 2027. It applies to contracts of £1 million or more, with a minimum weighting of 10% rising to 20% for contracts of £5 million or more, and focuses on two outcomes: good jobs and skills. See how to answer social value questions.
Related reading: how to answer social value questions in tenders, the carbon reduction plan template, government and public sector, working with the public sector.
From 1 January 2026, including VAT: £135,018 for central government goods and services, £207,720 for sub central goods and services, £5,193,000 for works and £663,540 for light touch services, with separate utilities and defence thresholds.
Yes. Under the Procurement Act 2023, thresholds are expressed including VAT.
It applies to procurements started on or after 24 February 2025. Procurements started earlier continue under the old regulations.
The Find a Tender service, where all notices under the Act are published and where suppliers register and store their core information once for all bids.
If you bid for public contracts, the Act changes the paperwork more than the fundamentals. Getting your registration, social value and carbon reduction plan ready once saves time on every bid.