Although the Procurement Act 2023 came into effect in early 2025, the cycle of threshold reviews remained at every two years, and so the 2024 thresholds continued to apply.
As we move towards 2026, the new thresholds have now been announced. So, after two years of high inflation, where have the thresholds gone?
We are only looking at two categories here, but, except for light touch contract types, all thresholds have been reduced. Although the reductions are not huge, when combined with the inflationary price increases and other economic turbulence over the last couple of years, the impact will be to drag more procurements into the regulated net.
Also, a reminder that the thresholds apply to the whole life of a contract, so in the context of schools and colleges procuring goods and services, a five-year agreement at £3,462 per month, including VAT, would be at the threshold and require a regulated procurement.
Although frameworks are still viable in some cases, the flexibility of the competitive flexible procedure now adds significant value to the procurement process without the level of complexity previously associated with regulated procurement activities.
The new threshold values apply to all procurements commencing after 1 January 2026 and are not retrospectively applied to ongoing procurements initiated before that date.
Please get in touch if you want to discuss further how we can help with ensuring your procurements are effective and compliant with the Procurement Act.
