Procurement Reform (Scotland) Act 2014 thresholds: consultation
We are inviting views on options to amend the goods, services, works and community benefit financial thresholds within the Procurement Reform (Scotland) Act 2014.
Closed
This consultation closed 8 January 2026.
View this consultation on consult.gov.scot, including responses once published.
Part two: options for amending the community benefits threshold
The Act defines a community benefit as a contractual requirement imposed by a public body relating to:
- training and recruitment
- the availability of sub-contracting opportunities, or
- which is otherwise intended to improve the economic, social or environmental wellbeing of the authority's area in a way additional to the main purpose of the contract in which the requirement is included.
When Scottish public bodies award contracts with a value equal to or greater than the community benefits threshold, they must consider including community benefit requirements as part of the procurement process. This threshold is currently set at £4 million (excluding VAT).
When public bodies plan to include community benefits in a contract they must set this out in the published advert for the contract.
A public body can decide not to include community benefits if they believe they are not appropriate or relevant to the procurement. Public bodies must include a statement in the contract advert explaining their reasons for this.
Public bodies can include community benefits in procurements valued below the community benefits threshold. Data shows that public bodies often include community benefit requirements in contracts with a value less than the current £4 million threshold. In 2022-23, 58% of all contracts worth between £2 and £4 million included community benefits (43% in 2023-24). Table 7 provides analysis of this data for 2022-23 and 2023-24 and demonstrates the use of community benefits across a range of thresholds.
| 22-23 | 23-24 | |||||||
|---|---|---|---|---|---|---|---|---|
| Value £ Million | Contracts with Community Benefits | Contracts without Community Benefits | Total Number of Contracts | % with Community Benefits | Contracts with Community Benefits | Contracts without Community Benefits | Total Number of Contracts | % with Community Benefits |
| >=1 – 2 | 51 | 77 | 128 | 39.8 | 61 | 108 | 169 | 36.1 |
| >=2 – 3 | 23 | 23 | 46 | 50.00 | 20 | 37 | 57 | 35.1 |
| >=3 – 4 | 16 | 5 | 21 | 76.2 | 20 | 16 | 36 | 55.6 |
| >=4 | 57 | 30 | 87 | 65.5 | 95 | 54 | 149 | 63.8 |
Table 7 – The percentage and number of contracts which included community benefits across a range of values
Including community benefits can help achieve local, place-based and national outcomes and improvements. Some organisations have suggested that community benefits should be considered in all procurements, in other words that there should be no threshold, or that the threshold should be very low.
Other people believe that it is important to manage the burden on suppliers, and to ensure that community benefit requirements do not deter small and medium-sized enterprises, third sector and supported businesses from bidding. This would suggest that the use of community benefits in procurement should be relevant and proportionate to the contract, and determined on a contract-by-contract basis.
We believe that there are grounds to lower the community benefits threshold from its current £4 million level. We think this is supported by the fact that community benefits are often included in lower value contracts, suggesting that they can be successfully used at a lower level. We would like to hear your views on the following four options for amending the community benefits threshold:
- Option A – No change to the threshold (£4 million)
- Option B – Reduce the threshold to £3 million
- Option C – Reduce the threshold to £2 million
- Option D – Reduce the threshold to £1 million
Whichever option is chosen, Ministers would still be able to change the threshold in the future.
Option A: No change to the threshold (value remains at £4 million)
Under this option the community benefit threshold would remain at its current level of £4 million.
Option B: Threshold value reduced to £3 million
Under option B public bodies would be required to consider including a community benefits in contracts valued at or above £3 million. This is a 25% decrease from it’s current level. Table 7, above, demonstrates that the majority of contract valued between £3 and £4 million already include community benefits.
Option C: Threshold value reduced to £2 million
Under option C the community benefit threshold would be decreased by 50% to £2 million. Table 7 shows that many contracts valued between £2 and £3 million already include community benefits.
Option D: Threshold value lowered to £1 million
Option D would reduced the community benefits threshold by 75% to £1 million. Table 7 shows that community benefits are already being included in around 35-40% of contracts valued between £1 and 2 million.
Question 3:
Which option would you support in relation amending the community benefit threshold?
a) Option A: Threshold values remain unchanged at £4 million
b) Option B: Threshold value is reduced to £3 million
c) Option C: Threshold value is reduced to £2 million
d) Option D: Threshold value is reduced to £1 million
e) None of the above
Question 4:
Question four is optional. What are the reasons for your answer to question 3?
Question 5:
Question five is optional. Is there anything else you want to tell us about the goods, services, works or community benefit thresholds of the 2014 Act?