The implementation of the Procurement Act 2023 has generated considerable discussion across the UK, yet its direct application in Scotland remains nuanced. While the Act introduces significant reforms for procurement in England, Wales, and Northern Ireland, public procurement in Scotland continues to be governed mostly by devolved legislation. However, its indirect influence is not insignificant.

Historically, the differing sets of regulations were broadly similar in both design and application, enabling a relatively seamless operation for suppliers and public bodies across the UK. But this alignment no longer holds true.

Challenges for Scottish procurement

For Scottish procurement professionals, the immediate impact of the Procurement Act 2023 is confined largely to reserved areas such as defence and security, where UK Government control prevails. In these instances, Scottish authorities will generally need to align with the UK-wide procedures, creating a dual compliance landscape.

Several UK Government contracting authorities, such as the Home Office, Ministry of Defence, and HMRC, as well as several non-departmental public bodies and agencies, operate within Scotland. In procurement processes where both Scottish and non-Scottish authorities are involved or collaborate, different sets of rules may apply depending on the jurisdiction of the contracting entity.

This divergence means that impacted procurement teams must invest in training and adapt internal processes to manage two sets of procurement rules.

Challenges for suppliers in a dual regulatory landscape

Suppliers operating in Scotland face their own set of challenges. While they continue to engage primarily with Scottish procurement rules for local contracts, bidding for contracts from UK-wide authorities now requires compliance with the Procurement Act 2023.

This may increase the administrative burden and complicate tendering processes, particularly for businesses that operate on both sides of the border. Some suppliers may choose to divert or prioritise their efforts towards one specific set of regulations over the other – a strategy that could negatively impact bidding behaviour and reduce overall market competitiveness. Procurement teams will need to engage effectively with suppliers to support them.

Engaging with frameworks from central purchasing bodies for UK authorities operating in Scotland could also become more complex. These frameworks are likely to appeal to, and be actively advertised to, suppliers from other jurisdictions who may not have a primary focus on delivering their products or services in Scotland. This dynamic could lead to poorer service provision for Scottish needs or force Scottish-based authorities to increase the number of tenders issued outside of central frameworks to secure reliable, locally focused suppliers.

Wider impact of regulatory reform
There are complexities that the coexistence of two regulations brings about. For example, this might create confusion, increased compliance costs, and a need for ongoing adaptation. Suppliers must navigate this duality, which could deter smaller businesses with limited resources from engaging in tendering opportunities.

Despite this, there may be wider improvements for public-sector procurement in Scotland as an indirect consequence of the Act.

The Act fosters a more uniform approach in reserved areas and could improve transparency, as well as the potential for more efficient contract award processes. The wider marketplace therefore stands to benefit from the transparency drive across all jurisdictions, including Scotland. For procurement professionals, these elements may also foster greater accountability and drive down costs through increased competition.

While the Procurement Act 2023 does not overhaul Scottish procurement law, its influence is evident in cross-border and reserved contracts. Its impact is likely to be felt by wider Scottish authorities as the scale of divergence becomes clearer over time.

Procurement teams and suppliers must remain agile. They will be required to meet the demands of a dual regulatory landscape, while leveraging the Act’s benefits for improved transparency, flexibility and efficiency.