Is your Housing Association subject to the Procurement Act 2023?

Since the Procurement Act 2023 came into force, housing associations across the UK have been working to understand their obligations under the new legislation. For Registered Providers of social housing, the question isn’t whether the Act applies, but rather how to navigate its requirements effectively while managing the unique challenges of the sector.

At Procurement for Housing, we’ve been working closely with housing associations to clarify their position under PA 2023 and ensure compliance with the new regulatory framework. This article examines what the Act means for social housing providers and how it affects your procurement operations.

Understanding your status as a Registered Provider

The Procurement Act 2023 replaces previous references to “bodies governed by public law” with the term “public authority”. However, for Registered Providers of social housing, the fundamental position remains unchanged: housing associations operating as Registered Providers are considered contracting authorities under the Act.

This classification brings both obligations and opportunities. While compliance requirements may seem burdensome, the Act also introduces new flexibilities that can benefit social housing providers, particularly around framework agreements and dynamic procurement systems.

The three key criteria for social housing providers

To determine whether a housing organisation falls within the scope of PA 2023, three principal criteria are assessed:

Public funding threshold – Does more than half of your organisation’s income derive from public sources? For many housing associations, this includes grant funding, Section 106 agreements, and other government-backed financial support. Even with increasing commercial activities, most Registered Providers exceed the 50% threshold when all public funding streams are considered.

Regulatory oversight – Are you subject to regulation by a public authority? Housing associations registered with the Regulator of Social Housing are subject to regulatory standards and oversight, which satisfies this criterion. The regulator’s powers to intervene, set standards, and enforce compliance demonstrate the level of public control contemplated by the Act.

Non-commercial operation – Does your organisation operate primarily for public benefit rather than commercial gain? Housing associations established to provide social housing, supported housing, or affordable homes typically meet this test. The Act considers factors including whether losses would fall to public bodies, whether you benefit from preferential terms due to public sector connections, and whether your primary purpose serves the public interest.

For most Registered Providers, all three criteria are met, bringing them firmly within the scope of the Procurement Act 2023.

What this means for Housing Association procurement

Being classified as a contracting authority under PA 2023 means housing associations must adhere to specific procurement obligations when commissioning works, services, or supplies above certain financial thresholds.

Transparency requirements are central to the new regime. Housing associations must publish contract award notices and maintain transparency throughout the procurement process. This includes publishing pipeline notices for planned procurements and ensuring that tender opportunities are accessible through appropriate platforms.

Competitive tendering remains essential for higher-value contracts. The Act requires housing associations to follow competitive processes that ensure value for money and fair treatment of suppliers. However, PA 2023 introduces greater flexibility in how you design these competitions, allowing for more innovation in procurement approaches.

Value for money considerations extend beyond price alone. Housing associations can now more easily incorporate social value, environmental sustainability, and quality considerations into their procurement decisions. This aligns well with the sector’s focus on community benefit and resident outcomes.

Special considerations for Housing Group structures

Many housing associations operate through group structures that include commercial subsidiaries engaged in market-rent housing, property development, or other commercial activities. The treatment of these entities under PA 2023 requires careful consideration.

Commercial subsidiaries operating independently in competitive markets are generally exempt from the Act. This allows housing groups a little flexibility in their commercial operations.

However, intra-group contracting presents complexity. When a housing association awards contracts to its own subsidiaries or group companies without competition, and those subsidiaries then subcontract work to external suppliers, the procurement rules may apply to those subcontracts. Housing groups should review their contracting arrangements to ensure compliance where required.

Accessing public funding and procurement platforms

Recent developments have highlighted an important consideration for housing associations: demonstrating your status as a contracting authority can be essential for accessing certain funding streams and procurement opportunities.

Housing associations that have declared themselves outside the procurement regime have, in some instances, found themselves ineligible for government funding programmes. The Public Sector Decarbonisation Scheme, for example, has been restricted to recognised contracting authorities, potentially excluding organisations that positioned themselves outside the regulatory framework.

Additionally, the Cabinet Office has indicated that only contracting authorities will be able to register and utilise Find a Tender, the UK’s central procurement platform. For housing associations looking to identify opportunities or collaborate with other public bodies, maintaining recognition as a contracting authority becomes strategically important.

Practical steps for compliance

Housing associations should take several practical steps to ensure they understand and meet their obligations under the Procurement Act 2023:

Review your funding profile to confirm whether public funding exceeds 50% of your income. Consider all sources including grant funding, Section 106 contributions, and any support linked to social housing provision.

Assess your procurement thresholds to understand which of your contracts fall within the scope of the Act. Remember that thresholds apply to the total value of contracts over their lifetime, including any extension periods.

Update your procurement policies and procedures to reflect the new requirements of PA 2023, including transparency obligations, pipeline notices, and the streamlined tender process.

Consider your group structure and how contracts flow between entities within your organisation. Ensure that any arrangements involving subsidiaries or related companies comply with relevant requirements.

Train your procurement and commercial teams on the new regime, ensuring they understand both the obligations and the opportunities that PA 2023 presents.

Looking ahead: Opportunities in the new regime

While compliance requirements may initially seem challenging, PA 2023 offers several advantages for housing associations:

The Act’s simplified procedures reduce bureaucracy compared to previous regulations, making it easier to run efficient procurement processes.

Greater flexibility in framework agreements allows housing associations to establish longer-term arrangements with suppliers while maintaining competition and value for money.

Dynamic procurement systems enable housing associations to create standing arrangements that can be accessed quickly when needs arise, reducing procurement timescales.

Enhanced collaboration provisions make it easier for housing associations to work together or with local authorities on joint procurement, potentially achieving better value and outcomes.

Getting expert support

The Procurement Act 2023 represents a significant change to the regulatory landscape for social housing providers. Understanding your position and ensuring compliance requires expertise in both public procurement law and the specific challenges of the housing sector.

At Procurement for Housing, we specialise in helping housing associations navigate these requirements. Whether you need support with compliance assessments, procurement strategy, or practical implementation of the new rules, our team combines procurement expertise with deep sector knowledge.

Understanding where you stand under PA 2023 is essential for protecting your organisation from compliance risks and ensuring continued access to funding opportunities. If you’re uncertain about your status or need guidance on implementing the new requirements, we’re here to help.

For expert advice on Procurement Act compliance tailored to social housing providers, contact our team at Procurement for Housing.

By Guy Stapleford, Head of Consultancy Services, PfH

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