Public procurement: new regimes for utilities and concession contracts across the UK

Written on 8 Feb 2016

In 2014, three new EU directives relating to public procurement came into force – and, being directives, that meant that EU Member States had two years in which to implement them into national law. The directives are: 

1. The ‘Public Contracts Directive 2014’ (Directive 2014/24/EU); 

2. The ‘Utilities Directive 2014’ (Directive 2014/25/EU); and 

3. The ‘Concessions Directive 2014’ (Directive 2014/23/EU). 

The UK is passing new regulations to bring these directives into force. The table below gives details on the progress of the UK’s implementation. In England, Wales and Northern Ireland, the Public Contracts Regulations 2015 (implementing the Public Contracts Directive) are already in force, and have been since 26 February 2015. 

England, Wales and Northern Ireland 

On 3 February 2016, the government released its response to the consultation that was run in autumn 2015 on how to implement the Utilities Directive 2014 and the Concessions Directive 2014. 

The purpose of the government’s consultation was to obtain comments on the draft new Utilities Contracts Regulations and Concessions Contracts Regulations, which will be implemented by 18 April 2016 and will apply to England, Wales and Northern Ireland. Scotland will continue to operate under a separate set of regulations. 

Some of the key points contained in the consultation response are: 

1. Utilities 

The new Utilities Contracts Regulations 2016 are an evolution from the current 2006 regulations, and do not present wholesale changes to the regime currently used by regulated utilities and economic operators. However, the changes are enough to require all parties involved in contracting with utilities to read the new regulations and take advice where necessary. We will be providing a guide to important changes when the UCR 2016 come into force. 

2. Concessions 

The 2004 directives on public and utilities procurement only regulated the procurement of a limited number of types of concession contracts, including works concessions. Service concession contracts are currently unregulated. 

It was decided at EU level that a Concessions Directive was required to ensure that this valuable area of public sector contracting was specifically covered by procurement rules, to ensure that contracts were opened up to competition across all member states. The Concessions Contracts Regulations 2016 will implement these principles for England, Wales and Northern Ireland. The regulations will mean that a much wider range of concession contracts will now be subject to law relating to advertisement of the contracting opportunity, a transparent procedure and remedies for failure by a public body or regulated utility to comply with the regulations. 

In general, the government’s view was that the drafts that were consulted on for both regulations were generally fit for purpose and will be implemented with only very minor changes. Links to the draft regulations are set out in the table below. 

Scotland 

Scotland is more advanced with its implementation of the Utilities and Concessions Directives. On 28 January 2016, the Utilities Contracts (Scotland) Regulations 2016 were published. These were closely followed by the Concessions Contracts (Scotland) Regulations 2016 on 2 February 2016. Both of these regulations will come into force on 18 April 2016, at the same time as the Public Contracts (Scotland) Regulations 2015, which were published last year. 

As in the rest of the UK, the Public Contracts (Scotland) Regulations 2015 and the Utilities Contracts (Scotland) Regulations 2016 replace the existing regulations governing these areas, while the Concessions Contracts (Scotland) Regulations 2016 are the first time concessions have been dealt with in a specific statutory instrument.

England, Wales and Northern Ireland

Directive EU Guidance  Regulation Date in force Guidance 
Public Contracts Directive 2014 European Commission main page

EC paper on changes to the procurement rules

Factsheet on changes to procurement rules

The Public Contracts Regulations 2015 26 February 2015 The government guidance on the Public Contracts Directive provides useful details on the Regulations

Osborne Clarke’s note on the new Regulations

Utilities Contracts Directive 2014 Utilities Factsheet The Draft Utilities Contracts Regulations 2016 On or before 18 April 2016 Osborne Clarke’s note on the new Regulations
Concessions Contracts Directive 2014 Concessions Factsheet The Draft Concessions Contracts Regulations 2016 On or before 18 April 2016 Osborne Clarke’s note on the new Regulations

Scotland 

Directive EU Guidance Regulations Date in force Guidance 
Public Contracts Directive 2014 European Commission main page

EC paper on changes to the procurement rules

Factsheet on changes to procurement rules

The Public Contracts (Scotland) Regulations 2015 18 April 2016 Awaited
Utilities Contracts Directive 2014 Utilities Factsheet The Utilities Contracts (Scotland) Regulations 2016 18 April 2016 Awaited
Concessions Contracts Directive 2014 Concessions Factsheet The Concessions Contracts (Scotland) Regulations 2016 18 April 2016 Awaited