Procurement reform: Cabinet Office response to consultation

The Cabinet Office published its response to the “Growing British industry, jobs and skills” consultation on 26 March 2026. The document summarises stakeholder feedback rather than guaranteeing further reform. The consultation sits within a wider policy push to use public procurement to support the Industrial Strategy, strengthen economic resilience, create local jobs and skills, improve prompt payment, and widen opportunities for SMEs and VCSEs.

Summary of responses

SME and VCSE Spend Targets - Majority support for mandating large contracting authorities to set three-year targets for procurement spend with SMEs and VCSEs. Concerns raised about administrative burden and lack of penalties for non-compliance.

Transparency Reporting - The most contested proposal. Extending publication requirements for all payments under public contracts proved divisive due to practical implementation challenges, though suppliers saw benefits in improved visibility.

Prompt Payment Exclusion - Strongest support of any proposal. Requiring exclusion of suppliers who cannot demonstrate prompt payment was widely backed by suppliers who highlighted the damaging effect of late payment on cash flow and growth.

People-Focused Services - Strong support, particularly from local authorities and VCSEs, for allowing flexibility to award people-focused services contracts without competition. Those who disagreed cited value for money and market access concerns.

Public Interest Test - Majority support for requiring a public interest test for major service contracts. Concerns raised about duplication with existing business case processes and potential market disruption, particularly for SMEs.

Mandatory Social Value Weighting - Majority support for requiring award criteria relating to jobs, opportunities or skills. Concerns that high weightings could favour larger organisations, disadvantaging SMEs and VCSEs.

Social Value KPIs and Reporting - Strong support for mandating KPIs and reporting against social value commitments, seen as crucial for ensuring tender-stage commitments are delivered post-award.

Standardised Social Value Criteria - Majority support for using standard criteria from a co-designed list. Suppliers welcomed consistency; concerns raised about a rigid tick-box approach.

Place-Based Social Value - Strong support for allowing authorities to define where social value will be delivered. Concerns focused on defining 'local' fairly and potential discrimination against non-local suppliers.

Key Takeaways

It is worth noting that none of the reforms consulted on are guaranteed to proceed and any legislative proposals depend on securing parliamentary time. Prompt payment exclusion, place-based social value and social value KPI reporting attracted the strongest backing and are the most probable candidates for legislative action. Transparency reporting was the most contested and may require further development. For contracting authorities and suppliers, the response is best read as a strong signal of the Government's direction of travel on procurement reform, rather than a finalised package.

Contributors: Laura Wisdom (Partner), Shauna McGinn (Solicitor)