Reducing barriers for business
Changes to procurement to cut red tape.
Plans to make public procurement for lower-value contracts quicker, simpler and more proportionate have been announced.
Subject to Parliament’s approval, the Procurement Reform (Scotland) Act 2014 threshold for goods and services will be increased from £50,000 to £100,000 and the works threshold will increase from £2 million to £4 million.
Contracts above these figures are subject to legal rules and duties but the thresholds have not changed since 2014, meaning more and more contracts are affected due to the impact of inflation.
The changes will benefit businesses by simplifying the process for lower-value contracts and were informed by a consultation which gathered views from businesses, public bodies, third sector organisations and procurement professionals.
Public Service Reform Secretary Ivan McKee said:
“Procurement gives us the ability to influence outcomes that extend well beyond the goods and services we purchase – and is at the heart at of our work on public service reform.
“These changes will create more opportunities for local businesses, SMEs and third sector organisations whilst reducing bureaucracy and enabling public bodies to procure more quickly and proportionately.”
Gillian Cameron, from business support initiative the Supplier Development Programme, said:
“The Supplier Development Programme welcomes the changes to the act’s thresholds. We believe that increasing the goods, services and works thresholds will allow for more contracts to be awarded through quicker, less formal procedures, reducing administrative burdens and making it easier for businesses, particularly local SMEs and third sector organisations to participate in the tender process.”
Background
The changes will be made via an affirmative Scottish Statutory Instrument to amend the existing thresholds within the Procurement Reform (Scotland) Act 2014. Subject to parliamentary approval, the changes will come into effect on 1 April 2027.
The thresholds being amended are used to determine whether a public contract falls within the scope of the lower-value Scottish public procurement rules. These changes are not to be confused with the threshold changes which occur every two years which update the thresholds within the Public Contracts (Scotland) Regulations 2015, the Utilities Contracts (Scotland) Regulations 2016 and the Concession Contracts (Scotland) Regulations 2016. Scottish Ministers must revise these thresholds to ensure that they remain aligned to the threshold values set by the World Trade Organisation’s Government Procurement Agreement (GPA).