Housing Association Procurement Guide: Navigating the New Public Procurement Rules and Reforms

The Procurement Act 2023: A Guide for Housing Associations

The Procurement Act introduces a transformative framework for public procurement in the UK, presenting both opportunities and challenges for housing associations. With its provisions set to take effect on 24 February 2025, this comprehensive guide will help housing associations navigate the new rules and maximise their benefits while ensuring compliance.

Understanding the Context

Historically, UK procurement regulations were derived from EU principles, emphasising transparency, proportionality, and equal treatment. After Brexit, these principles were retained under the Public Contracts Regulations 2015, but a government review highlighted the need for a modern and agile system. The Procurement Act 2023 addresses these needs, offering a streamlined framework designed to foster innovation, efficiency, and fairness in public procurement.

For housing associations, this marks a pivotal shift, requiring adjustments to procurement strategies while also enabling greater flexibility and opportunity for social impact.

Key Changes in the Procurement Act 2023

1. Simplified and Flexible Procedures The Act replaces multiple procurement processes with a unified approach, allowing housing associations to tailor procurement methods to their specific needs. For example, the Competitive Flexible Procedure (CFP) offers the flexibility to design bespoke processes that align with strategic goals.
2. Enhanced Transparency Transparency is central to the Act, mandating detailed publication of procurement data, including pipelines, redacted contracts, and key performance indicators (KPIs). While this improves accountability, housing associations must prepare systems to handle these requirements efficiently.
3. Focus on Social Value Housing associations are encouraged to embed social value into procurement decisions. This includes prioritising community benefits, environmental considerations, and supplier diversity, with a focus on supporting SMEs and VCSEs. (Explore social value strategies)
4. Pre-Tender Engagement The Act promotes engagement with suppliers before tendering, enabling housing associations to foster innovation and better understand market capabilities.
5. Robust Contract Management Obligations for contract management have been strengthened, including the need for regular KPI assessments and publication of payment performance. For contracts exceeding £5 million, housing associations must implement rigorous monitoring systems.

Implications for Housing Associations

Registered Providers and the Procurement Act

Housing associations, as Registered Providers (RPs), are explicitly covered under the Act. While commercial subsidiaries may be exempt in certain scenarios, compliance is mandatory for all procurement activities involving public funding.

Strengthening Supplier Relationships

The Act’s emphasis on pre-tender engagement and supplier diversity creates opportunities to build stronger partnerships with SMEs and VCSEs, aligning procurement practices with community and organisational goals.

Addressing Compliance Challenges

1. Maintain Comprehensive - Records Ensure that all procurement activities are well-documented and auditable to meet transparency requirements.
2. Conflict of Interest Management - Conduct detailed assessments to identify and mitigate potential conflicts, and maintain records as part of the procurement lifecycle.
3. Monitor and Report Performance - Regularly review contract performance and ensure compliance with KPIs and payment timelines. Publishing performance data will be crucial for contracts above the reporting thresholds.

Adding Value Through the Procurement Act

Delivering Value for Money (VfM)

The Act aligns with the Green Book, requiring housing associations to deliver VfM through balanced economic, social, and environmental considerations.

Accountability and Governance

Guidance from “Managing Public Money” reinforces the need for robust governance, ensuring public funds are managed effectively and with integrity.

Collaborative Opportunities

The creation of "communities of practice" fosters collaboration across housing associations, enabling shared learning and best practice dissemination. This is especially critical for addressing structural challenges in procurement teams.

Opportunities and Challenges

Opportunities

• Increased flexibility in procurement design.
• Alignment with broader social and environmental objectives.
• Stronger supplier relationships foster innovation and long-term partnerships.

Challenges

• Administrative burden from transparency requirements.
• Compliance risks linked to conflict-of-interest and performance reporting.
• Adapting to the expanded obligations of contract management.

A Practical Checklist for Housing Associations

1. Review and Align Policies
   • Update internal procurement policies to reflect the new procedures and priorities under the Act.
   • Embed social value and transparency measures into policy frameworks.
2. Engage with Training Programmes
   • Participate in government-led training to ensure teams understand the new rules and their application. (Explore training opportunities)
3. Enhance Transparency Systems
   • Develop tools to publish procurement data efficiently, including detailed notices and contract performance metrics.
4. Strengthen Supplier Engagement
   • Actively involve SMEs and VCSEs in pre-tender discussions to foster inclusivity and innovation. See further details on PME.
5. Use New Tools like the PSQ
   • Use the Procurement Specific Questionnaire to simplify supplier pre-qualification and ensure fair evaluations.
6. Monitor Compliance and Risk
   • Regularly evaluate compliance with the Act’s requirements and prepare for potential audits by regulatory bodies.

Procurement Key Changes

Understanding the Changes to Public Sector Procurement Rules: Terminology and Concepts

One of the first steps in preparing for the new procurement rules is to familiarise yourself with the changes in terminology and concepts. The Procurement Bill introduced a significant shift in language and terminology, departing from the European concepts and terms previously used. For example, "Contract Notices" are now referred to as "Tender Notices." It is essential to grasp these changes to effectively communicate and engage with the new procurement framework.

Additionally, the Procurement Bill introduces new concepts, such as "Covered Procurement," which require a deeper understanding. Taking the time to educate yourself and your team on the updated terminology and concepts will ensure smoother transitions and better compliance with the new rules.

Public Procurement Learning & Development Programme for Professionals: Enhancing Procurement Knowledge

To support the transition into the new procurement regime, the Cabinet Office will roll out an extensive Learning & Development programme. This programme, available to all contracting authorities, including housing associations, aims to equip procurement teams with the knowledge and skills required to navigate the changes effectively.

The programme will offer various training options, including knowledge drops, self-guided e-learning, full-day instructor-led advanced learning and communities of practice. These resources will cater to different levels within organisations, ensuring that procurement professionals at all stages of their careers have access to the necessary training.

It is crucial to stay updated on future updates from the Cabinet Office regarding the Learning & Development programme. Identifying individuals within your organisation who would benefit from attending specific training sessions and enrolling them in the relevant programmes will help ensure a smooth transition and enhance compliance with the new Procurement Act.

Assessing Procurement Internal Resources and Capabilities

As the procurement landscape evolves, it is essential to assess your organisation's internal resources and capabilities. Identify areas where additional resources or skills development may be required to meet the demands of the new procurement rules. This assessment aligns with the principles outlined in the National Procurement Policy Statement.

Taking stock of your internal resources will enable you to identify any gaps in expertise or capacity. Consider investing in training or hiring additional staff to bolster your procurement capabilities. By aligning your resources with the new regime, you can ensure smooth operations and compliance with the updated rules.

Maintaining an Up-to-Date Contracts Register and Anticipating Procurement Requirements

Under the new procurement rules, enhanced transparency is a key aspect. Housing associations anticipating significant public contract spend in the next financial year will be required to publish a pipeline notice. This notice should detail contracts with an estimated value exceeding £2 million that you expect to advertise within the next 18 months.

Additionally, contracts above £5 million in value will require the publication of redacted copies of the contracts with the Contract Details Notice. It is crucial to maintain an up-to-date contracts register, identifying anticipated spend and planning the pipeline of upcoming procurement requirements. This proactive approach will ensure compliance with the transparency obligations and provide visibility into future procurement activities.

Regularly reviewing and updating your contracts register will also help you identify when contracts are due for renewal, allowing for timely preparations and smooth transitions.

Evaluating Internal Contract Procedure Rules

Alongside the new procurement rules, it is essential to revisit your existing Contract Procedure Rules and Standing Orders. Identify areas where updates may be required to align with the new regime. Start by reviewing the procurement procedures for different values of contract opportunities, considering the increased flexibility offered by the new Competitive Flexible Procedure.

While awaiting further guidance from the Cabinet Office on the use of the Competitive Flexible Procedure, consider designing your own procedures based on your organisation's needs. Determine which types of procurement may benefit from elements of dialogue or negotiation. By revisiting your internal contract procedure rules, you can ensure they align with the new regime and optimise your procurement processes.

Staying Informed and Engaged

As the new procurement rules come into effect, it is crucial to stay informed and engaged with the evolving landscape. Regularly monitor updates from the Cabinet Office and other relevant sources to stay abreast of any changes or guidance related to the new procurement regime.

Engage with industry networks, such as communities of practice, to share knowledge and best practices with other housing associations and contracting authorities. By staying informed and engaged, you can adapt to any further developments in the procurement landscape and ensure ongoing compliance with the rules.

Housing Associations Procurement Updates - Conclusion

The upcoming reforms to the public procurement regime present both challenges and opportunities for housing associations. By understanding the changes in terminology, participating in the Learning & Development programme, assessing internal resources, maintaining an up-to-date contracts register, evaluating internal contract procedure rules, and staying informed and engaged, you can navigate the new procurement rules successfully.

As a housing association, compliance with the new procurement rules ensures transparency, fairness, and efficiency in your procurement processes. By proactively preparing for the changes, you can position your organisation for success in the evolving procurement landscape.

Do you need procurement support? Contact us now – hello@thorntonandlowe.com

For more information on our Public Sector Contract Management Solutions click here.

Take a look at our Social Housing Grounds Maintenance, Procurement and Contract Management tips, which can be found here.

At Thornton & Lowe we specialise in supporting Social Housing Providers with:

• Procurement compliance
• Achieving value for money
• Commercial benchmarking and analysis
• Assess management consultancy
• Grounds maintenance audits
• Estate services supplier and contract management

Using the Central Digital Platform for Housing Associations

Streamlining Procurement Processes with the Central Digital Platform

Under the Procurement Act 2023, the central digital platform has been introduced as a pivotal tool for housing associations to improve transparency, reduce duplication, and streamline procurement activities. This platform serves as a single repository for essential procurement information and notices, supporting housing associations in meeting their compliance obligations while enhancing accessibility for suppliers.

Step-by-Step Approach for Housing Associations:

Registration and Setup:

• Housing associations must ensure their procurement teams are registered on the central digital platform.
• Upload key organisational and procurement-related information, creating a standardised business record for ongoing use.

Publishing Notices:

• Pipeline Notices: Announce upcoming procurement opportunities to provide suppliers with sufficient preparation time.
• Preliminary Market Engagement Notices: Share planned engagement activities to invite feedback and inform procurement strategies.
• Contract Award Notices: Publish details of awarded contracts, ensuring compliance with transparency requirements.
• Termination Notices: Notify the market about contract completions or early terminations, offering clarity and openness.

Advertising Tenders:

• Use the platform to post tender opportunities, enabling suppliers to view and respond directly.
• Leverage the platform’s streamlined interface to avoid re-entering data for recurring procurement activities.

Supplier Management:

• Facilitate supplier onboarding by directing them to the platform for registration and information upload.
• Use the centralised records to evaluate supplier eligibility and performance consistently.

Data Management and Reporting:

• Maintain a clear audit trail of procurement activities, including modifications and key performance indicators.
• Access real-time data and insights for reporting and decision-making, aligning with transparency and governance objectives.

Benefits for Housing Associations:

• Simplified Processes: Reduce administrative burdens with a unified platform for all procurement activities.
• Improved Supplier Engagement: Enable suppliers, including SMEs, to access opportunities easily, supporting diverse and innovative bids.
• Enhanced Transparency: Build trust with stakeholders by meeting the Act’s rigorous transparency requirements.