Introduction

Today marks a major shift for the UK's political system as Labour take power in the UK's parliament after 14 years' of Conservative government. With this change, every business and individual working with the public sector faces uncertainty, bearing the question: How will a new government affect procurement?

To help make sense of this, we have consulted government advice, past data, and expert opinion, to offer some clarity for the years ahead.

Potential procurement  changes under a Labour government

What we know so far about Labour’s priorities?

Labour has been notoriously careful in their policy announcements. Their ‘First Steps for Change’ include priorities like economic stability and tough spending rules, cutting NHS waiting times, tougher border security, investments in publicly owned clean energy, reducing anti-social behaviour, and mass recruitment to teaching.

While the Labour manifesto itself doesn't explicitly outline Labour's plans for public sector procurement as a whole, there are insights we can gain from key policies to predict changes to specific areas public sector.

Here are some of the expected shifts around procurement:

• Labour has committed to aligning procurement policies to their government’s strategic industrial priorities. In practice, this looks like an investment into creating a healthy business environment for the UK’s most successful industries including: professional services, advanced manufacturing, R&D, and creative industries.
• They will also create a simplified and more accessible procurement environment for small and new businesses (particularly university spinouts, start-ups, and R&D institutions partnered with industry). This ranges from ensuring they are paid on time to helping them win more government contracts.
• Blue Light looks to be a key area of both investment and cuts. There will be investments in community policing and proactively preventing crime. This looks, however, to come from an increase in hiring and to be funded by a crack down on wasteful spend and inefficiency. While this does allude to investments in productivity and efficiency solutions, Labour has committed to standardising procurement across police forces and introducing shared services. This could mean major contracts for some suppliers and losses for others.
• Investments in policing will not just be limited to anti-social behaviour and street crime. Labour have committed to investing in police technology to improve investigative techniques and keep pace with modern and cyber threats. In practice, this looks like investments in IT and training which will be procured in a standardised way across policing bodies collectively.
• Across the NHS, Labour has committed to making the procurement and adoption of innovative technologies and medicines across the data and life sciences industries. This will come in the form of incentivised development, approvals, and NHS procurement to ensure they are adopted and in-use faster.
• Defence also looks to be an area where procurement is set to shift. Labour have stated they wish establish long-term partnerships between business and government, promote innovation, and improve resilience. This will look like longer contracts (perhaps longer than the ones we already see which are unique to defence) and leaner, more efficient procurement to create a long-term solution to inefficiency and waste (as opposed to one-off reductions in spend).

What this translates to in terms of where spend will occur, or be cut, has been alluded to in the manifesto but we will need to wait for budgets and commercial pipelines to have a clear idea of the opportunities for suppliers.

So far we know:

• Labour have said a "Fit For the Future" fund will be introduced for modernising NHS technology and infrastructure. This will cover investments in the NHS app, patient management, diagnostic services, mental health, and cutting wait times.
• There will be the creation of a National Infrastructure and Service Transformation Authority to oversee and prioritise infrastructure projects. This will align with a ten-year infrastructure strategy to improve rail connectivity, road maintenance, and the rollout of gigabit broadband and 5G.
• Labour have committed to modernise HMRC by investing in new technology to build capacity and reduce tax avoidance.
• Consultancy spend will be halved and the funds will be reallocated to frontline services.
• There will Strategic Defence Review and increased spending to 2.5% of GDP on defence​.

Overall, we can expect Labour to focus on mission-oriented procurement, aligning with long-term social and environmental goals and to place a strong emphasis on innovation and market shaping.

How might a Labour government and the new Procurement Act impact future procurement

It's worth remembering that overall, the Procurement Act was supported by both major parties. It is not likely to be a question of if the Act will still go ahead, but there is still uncertainty about when and how it will be implemented, and if the 28th October 'go-live' date will be met.

Given Labour's manifesto policies around supporting SMEs, this may mean that they lean into the Procurement Act's loose commitments to assessing the barriers to small and new businesses across public sector procurement. As a whole, it's unclear whether this element Procurement Act will manifest into anything substantive but it's possible that Labour may lean into it more than the previous government given their public support of alleviating these challenges. SMEs are a huge part the UK economy and direct public sector spend with them has declined over recent years, a Labour government implementing the Procurement Act could see this change.

Although Labour has not clarified their position explicitly, recent statements are indicative of their position.

Many key Labour shadow ministers have criticised the Procurement Act for not going far enough:

• Angela Rayner, Deputy Leader of the Labour Party, stated, "This Bill fails to close the loopholes that saw obscene waste of taxpayers’ money through the VIP lane, it fails to mandate social value to secure investment in good British business, and it fails to create robust protections for workers."
• Dame Nia Griffith, Shadow Minister in the Cabinet Office, added, "...the same wasteful approach to emergency contracting rules that we saw during the pandemic, while decent, skilled local businesses are denied the same opportunity."

Johnny Hugill, Director of Commercial, Spend and Impact at PUBLIC suggests there may be two other defining features of how Labour implements procurement.

First, an emphasis on “Buying British,” prioritising local and national suppliers.

Secondly, a greater push for sustainability and social value.

For other public sector buyers with some degree of autonomy, such as the NHS and local government, there may also be “new directives that emphasise sustainability and social value.”

Anticipating government buyers' future needs: strategies to stay ahead in public procurement

Using Stotles to see the upcoming sales pipeline will be crucial for suppliers over the course of the next parliament. This allows you to view future buyers priorities before they have been announced as tenders, offering strategic advantages for early planning and engagement.

Conclusion

In this blog, we highlighted how the UK general elections and Procurement Act will affect the way procurement happens, making it even more important for you to stay on top of relevant opportunities. Leveraging the capabilities of Stotles can be pivotal for suppliers navigating the changes brought by the general election.

Suppliers should proactively engage with buyers, using Stotles to find relevant contacts. For contracts likely to extend into the new government, maintaining open communication is essential to understand potential changes.

Stay updated with tender alerts with Stotles, enabling prompt notifications of new tenders and changes. You can also see tenders your competitors are monitoring, providing a strategic advantage. By using Stotles, suppliers can access an upcoming sales pipeline, view future buyer priorities before they are officially tendered, and engage early. This foresight is crucial for planning and adapting strategies over the next parliament, ensuring you can capitalise on upcoming opportunities and maintain a competitive edge.

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