Regulated procurement | UK Regulatory Outlook January 2026

New procurement thresholds come into force on 1 January 2026 under PPN:023

New threshold amounts governing the award of public contracts come into force on 1 January 2026. The thresholds are revised every two years to account for currency fluctuations and to ensure UK compliance with obligations under the World Trade Organization's Agreement on Government Procurement.

The thresholds are inclusive of VAT and apply to any procurements commenced on or after 1 January 2026. Key thresholds include £135,018 for goods or services contracts awarded by central government authorities and £207,720 for goods or services contracts awarded by sub-central government authorities.

Payment compliance and contract performance notices

From 1 January 2026, contracting authorities must publish payment compliance notices and contract performance notices under the Procurement Act 2023.

Payment compliance notices set out the extent to which contracting authorities have paid their invoices within 30 days of receipt and include average payment times and percentage of invoices paid within specified timeframes.

These notices will record performance over a six-month reporting period and must be published within 30 days of the end of the reporting period. The first reporting period will run from 1 October 2025 to 31 March 2026, meaning notices are due by 30 April 2026. These transparency requirements aim to incentivise faster payment and enable direct comparison with private sector payment practices.

Government response to procurement reforms consultation

The Cabinet Office's official response to its June 2025 consultation on further reforms to public procurement is expected to be published in 2026.

The consultation sought views on a wide range of proposals aimed at strengthening the UK's economic resilience, supporting British businesses and improve opportunities for small and medium-sized enterprises and voluntary community and social enterprises. Any proposals taken forward by the Cabinet Office will progress through Parliament as an amendment to the Procurement Act 2023.

First judgments under the Procurement Act 2023 anticipated

The first court decisions made in relation to procurements governed by the Procurement Act 2023 are anticipated to be published from spring 2026. These early judgments will provide crucial guidance on the interpretation and application of the new regime, which came into force in February 2025. The most highly-anticipated judgments will be those dealing with applications to lift the automatic suspension. Under the previous legislation, the court applied the principles in American Cyanamid when determining applications on the suspension, but under the Procurement Act, the court will apply the new statutory test set out in the legislation. How the court interprets and applies that new test will be the subject of considerable scrutiny.

First suppliers anticipated to be listed on Debarment List

The Procurement Act 2023 introduced a new debarment regime, in which contracting authorities have a right to exclude suppliers from public procurement who have engaged in serious misconduct, including fraud, bribery, competition law breaches, misconduct and poor performance. Once listed, suppliers face mandatory or discretionary exclusion from public contracts across the UK for specified periods.

There are currently no suppliers on the list, but in February 2025, in the wake of the Grenfell Inquiry, the government announced that it was investigating cladding suppliers named in the Inquiry Report for inclusion on the list. We anticipate that list will begin to be populated with suppliers during the course of 2026.

New NHS procurement regulations target modern slavery in supply chains

See Modern slavery section.