Public sector procurement has always operated in a complex and demanding environment, but the landscape has changed significantly in recent times, bringing new challenges for public bodies to navigate.
With major legislative reform, economic volatility and changing expectations from the public and media, there are many areas to consider when delivering on procurement projects that use taxpayer’s money.
In this guide, we look at some of the current major public sector procurement challenges faced by public sector organisations and how we can help you to overcome them.
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Adapting to new public sector procurement rules
The introduction of the Procurement Act 2023, from February 2025, represents the most significant reform of the sector in decades, fundamentally changing how public contracts are awarded and managed and essentially transforming public procurement in a number of ways.
Key changes from the Act affecting procurement teams include:
New procurement procedures, including the Competitive Flexible Procedure
Enhanced transparency and notice requirements
Greater access for SMEs and voluntary organisations
A strengthened supplier exclusion and debarment regime
New expectations for contract management and performance reporting
Compliance with public sector procurement rules now requires updated processes, training and systems, as more and more projects are started under the new legislation for the first time.
At Procurement Hub, our range of solutions are designed to remove as much of the time and administrative burden from the procurement process as possible, with compliance and other suitability assessments already done on the suppliers that can bid for contracts.
Download our essential guide to the Procurement Act 2023.
Managing tight financial constraints in an era of economic uncertainty
Financial pressures have always been significant in public procurement, but the challenge has evolved even further in recent times. The impact of inflation, supply chain volatility and sometimes uncertain funding settlements now require procurement teams to actively manage cost risk, not just reduce spend.
Some of the areas for procurement professionals to consider now include:
Incorporating inflation and fluctuation clauses into contracts
Assessing supplier financial resilience
Focusing on whole‑life value rather than lowest upfront cost
Using frameworks and other procurement solutions strategically to manage price volatility
Achieving value for money in procurement now means balancing affordability, resilience and long-term outcomes.
Read our guide to managing procurement in economic insecurity in the UK.
Demonstrating value beyond cost
Expectations of procurement, from both government, media and the general public, have expanded from cost savings alone to delivering measurable public value. The challenge lies in showing tangible value in areas where measurement hasn’t always been straightforward.
Procurement reports and value assessments increasingly include areas such as:
Social value and community impact
Environmental outcomes
Economic growth and local benefits
Supplier diversity and SME participation
This approach needs stronger outcomes-based evaluation, transparent reporting and contract performance monitoring throughout delivery.
Balancing procurement innovation and proven results
Embracing suppliers and a procurement process with an innovative approach is an important part of public sector procurement, driving things forward and finding new solutions that can help deliver better outcomes and balance the budget. However, with lots at stake, it can be a real temptation for public bodies to approach procurement in ways that have proven successful in the past rather than take a chance on something new.
At Procurement Hub, we believe that balance is key to success when it comes to innovative new approaches and tried and tested methods. Using a flexible framework or another solution for procurement that has room for all of these aspects can help ensure that your project is in the capable hands of qualified and proven suppliers but can still embrace innovation as part of the process; the best of both worlds.
Some of the considerations could include:
Digital platforms and data systems procurement
Cybersecurity requirements
Avoiding vendor lock-in
Responsible adoption of AI-enabled solutions
Innovation can drive transformation but requires careful piloting, clear governance and outcome-based contracts.
Achieving sustainability goals and social value commitments
Sustainable and responsible procurement is something that has even greater prominence at present, alongside the social value expectations outlined in the Procurement Act 2023.
Procurement is now expected to support:
Net zero and climate resilience objectives
Fair work and ethical supply chains
Community wealth building
Local economic growth and skills development
The procurement process needs to look at these things not just during project delivery stages, but for the entire lifetime of the project and its long-term impact on the planet, the community, the nation and even globally. Balancing these outcomes with affordability and deliverability remains a central tension for contracting authorities.
At Procurement Hub, we can help ensure that your procurement strategy includes sustainability at its heart, empowering public bodies to develop and implement responsible procurement processes that don’t compromise on the outcomes.
Other important public sector procurement challenges
Along with the five key areas already identified, there are several other challenges in public procurement currently, including:
Building more resilient and diverse supply chains
Disruptions to supply chains in recent years, both globally and nationally, have highlighted the risks of over-reliance on limited supplier pools. To boost resilience, public bodies need to diversify when appropriate.
Key actions for procurement teams to take in this area include:
Engaging a broader supplier base
Encouraging SME participation
Using multi-supplier frameworks when suitable
Monitoring supply chain risks proactively
Prioritising transparency, accountability and procurement integrity
Scrutiny of public procurement decisions is quite rightly high, with the new transparency requirements meaning procurement activity is more visible than ever.
This means that to help maintain public trust, organisations need to ensure every project includes:
Clear audit trails and documentation
Open data that meets reporting obligations
Monitoring of contract delivery and performance
Steps taken to prevent conflicts of interest and anti-competitive behaviour
How Procurement Hub can help you navigate these challenges
Procurement Hub is part of Places for People, so we understand the challenges of public sector projects when it comes to planning and delivering projects that make a real positive difference to communities.
Our CIPS qualified team is highly experienced in developing public sector procurement solutions that incorporate the many plates that public bodies have to spin to choose the right suppliers and move forward with confidence.
Our range of frameworks and DPS solutions can be tailored to your specific needs and we offer all of the support you need with your procurement strategy, helping you to deliver compliantly, efficiently and successfully.
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