Insight
Industry leaders express 'value' uncertainty on the Procurement Act 2023
24 Feb 2025
Gavin Mason
Operations Director
A new survey gauging construction industry sentiment on the Procurement Act 2023 has revealed split opinion on its long-term value for public sector funding.
The wide-ranging report, undertaken by Pick Everard, took stock of contractor, developer, and consultant attitudes ahead of the Procurement Act 2023’s implementation on 24 February.
Among the chief aims of the legislation is to deliver a simpler, flexible and more transparent system for public procurement, that considers taxpayer’s money. However, more than 40% of respondents expressed doubts over the act’s ability to deliver greater value for money for public sector operations.
“Scrutiny around public sector spend is at an all-time time high, spurred by government interest in improving value for money and media highlighting the high costs of high-profile infrastructure projects and inability to quickly procure and respond to immediate challenges such as RAAC.
“Those within the industry will be playing close attention to the next six-twelve months to see how the system unfolds, and the impact it will have on creating real value for money in the public sector.”
— Gavin Mason, operations director at Pick Everard
Despite scepticism around the act’s value for money status, respondents did broadly agree that the new legislation will offer a fairer playing field for SMEs to compete, while increasing the transparency of procurement processes through the new central digital platform (CDP).
‘Fairness and transparency’ was the top rated answer when asked what the biggest outcomes of the act will be at 48%, edging improved ‘dialogue and negotiation’ procedures.
61% of those surveyed also agreed that the CDP and its intended outcomes was the most important aspect of the legalisation for their business processes moving forward. The system is being described by government as way to ‘simplify the process of finding and bidding for contracts.’
Elsewhere, the survey also aimed to determine sentiment around current construction industry conditions, tackling key and ongoing issues such as material costs, business confidence and the impact of government policy.
More than half of respondents expressed ‘medium’ business confidence levels after six months of a Labour government. Further reflected in the data, when considering the predicted increase for construction costs, most industry bosses expect a rate of one to three per cent per annum. Meanwhile material costs (28%) and tax increases (25%) continue to be cited as notable challenges for businesses prospects.
“The industry is still cautiously predicting cost rises but some of the bottlenecks we are witnessing through planning and particularly the building safety regulator are significant.
“High-Risk Building (HRB) schemes are being choked, and the construction supply chain is getting starved of work, leading to significant potential for price reductions as the industry competes to keep teams occupied.”
— Gavin Mason, operations director at Pick Everard
The results of the latest survey, in particular business confidence levels, indicate some level of upturn and shifting attitudes since market sentiment was analysed by the firm in a similar capacity ahead of Labour’s first Autumn Budget.
In October, 74% of respondents stated that a gloomy rhetoric ahead of the Autumn Budget had increased market uncertainty, while the same number agreed that a change in government hadn’t increased appetite among the construction industry to increase investment spend.