An overview
The Procurement Act 2023 is the most significant overhaul of UK public procurement law in decades. It received Royal Assent on 26 October 2023 and the majority of its provisions came into force on 24 February 2025. The Act consolidates four separate procurement regimes into a single legislative framework covering England, Wales, and Northern Ireland, and introduces a greater focus on supplier access, transparency, and payment.
For businesses that supply the public sector, the most directly relevant change is the strengthening of the 30-day payment obligation. Mandatory 30-day payment terms are now implied into all public contracts by statute, regardless of what the contract says. The obligation also flows through to subcontractors across the supply chain.
What the Act replaced
Before the Procurement Act 2023, public procurement in the UK was governed by four separate sets of regulations inherited from EU law. The Act consolidates all four into a single framework:
| Previous regulation | Scope |
|---|---|
| Public Contract Regulations 2015 | Standard public sector contracts for goods, services, and works |
| Utilities Contracts Regulations 2016 | Procurement by utilities providers (water, energy, transport, postal services) |
| Concession Contracts Regulations 2016 | Contracts where the supplier takes on the operating risk |
| Defence and Security Public Contracts Regulations 2011 | Sensitive defence and security procurement |
Scotland did not adopt the Procurement Act 2023 and continues to operate under its own separate legislation.
Key changes for suppliers
30-day payment terms implied by statute (section 68)
Payment within 30 days is now a statutory implied term in every public contract under section 68 of the Act, whether or not it is written in. Critically, section 68(6) makes this non-derogable: any contractual term that attempts to restrict or override the implied payment obligation is without effect. Previously this obligation existed under the PCR 2015 but was not automatically implied in the same way.
Supply chain payment obligations extended (section 73)
Under section 73 of the Act, the 30-day payment obligation must flow through the supply chain. Subcontractors working on public sector projects are entitled to 30-day payment terms from prime contractors. This extends the supplier base who may have a late payment claim: it is not limited to those who contracted directly with the public body.
Payment compliance notices (section 69)
Under section 69 of the Act, contracting authorities in England must publish payment performance data from 1 January 2026, with the first reporting period running to 31 March 2026 and notices due within 30 days of period-end. Subsequent reporting periods then run for six months, ending on 30 September and 31 March each year, with notices due within 30 days of period-end. Wales follows from 1 April 2026. This makes late payment patterns publicly visible in a way they were not under the previous regime.
Section 69(6) excludes four categories from the payments compliance notice obligation: transferred Northern Ireland authorities, private utilities, contracts awarded by schools, and concession contracts. The schools exclusion is the one that matters most in practice — it's the same point made in section 68(1) for the implied 30-day term, and it means academies and maintained schools sit outside both the contractual obligation and the reporting regime.
Simpler access for smaller businesses
The Act reduces bureaucratic barriers for SMEs and VCSEs bidding for public contracts, with a new competitive flexible procedure replacing the previous rigid range of procurement routes.
Contracts excluded from the implied payment obligation. Section 68(1) of the Act excludes certain contract types from the 30-day implied payment term: concession contracts, utilities contracts awarded by private utilities, and contracts awarded by schools. These exclusions apply to the implied payment terms under this Act only — they do not affect entitlements under the Late Payment of Commercial Debts (Interest) Act 1998, which applies independently to all qualifying commercial debts regardless of contract type.
How the legislation has evolved
Late Payment of Commercial Debts (Interest) Act 1998
Creates the statutory right to claim interest on overdue commercial invoices. Applies to all B2B debts including public sector contracts. Still in force and unchanged.
Public Contract Regulations 2015
Introduced the 30-day payment obligation for public sector contracting authorities and their supply chains. Governs all contracts awarded before 24 February 2025.
Procurement Act 2023 receives Royal Assent
The Act is passed but not yet in force. Contracting authorities and suppliers begin preparation for the new regime.
Procurement Act 2023 comes into force
The Act replaces the PCR 2015 for new contracts. The 30-day payment obligation is retained and strengthened. PCR 2015 continues to apply to contracts awarded before this date.
Payment compliance notices become operative
Contracting authorities in England must begin publishing payment performance data under section 69 of the Act, commenced by the Procurement Act 2023 (Commencement No. 4) Regulations 2025 (SI 2025/1316). First reporting period: 1 January to 31 March 2026, with notices due by end of April 2026. Subsequent periods run for six months, ending on 30 September and 31 March each year. Wales follows from 1 April 2026.
The remedy hasn't changed. The Late Payment Act still applies.
The Procurement Act 2023 changed the procurement framework, but not the remedy for late payment. Where a public sector body has paid your invoices late under a contract governed by the new Act, the Late Payment of Commercial Debts (Interest) Act 1998 still entitles you to statutory interest at 8% above the Bank of England base rate, plus fixed compensation of £40–£100 per invoice. Late Payment Action purchases those entitlements outright, paying a fixed sum on completion and taking on full responsibility for pursuing the claims.
