Dr Annum Rafique explores how the Procurement Act 2023 transforms social housing retrofits to accelerate the UK’s net-zero transition.
Dr Rafique is part of a team of researchers from the University of Birmingham and the University of Manchester working on a joint project funded by Catapult Connected Places and Innovate UK to empower councils and local authorities to embrace innovative procurement practices. Find out more about the Innovation Procurement Empowerment Centre.
Introduction
The Procurement Act 2023 took full effect on 24th February 2025, which marks a major shift in how public sector contracts are awarded in the UK. With a focus on transparency, efficiency, and inclusivity, the Act is particularly significant for social housing providers looking to retrofit homes to improve energy efficiency and sustainability.
This blog explores how the Procurement Act 2023 facilitates the retrofitting of social housing and benefits providers by streamlining procurement processes, supporting innovation, and promoting sustainable practices.
Procurement is the process of acquiring goods, services, and works from external sources to support an organisation’s operations efficiently, ethically, and sustainably. It encompasses a series of activities, including supplier selection, contract negotiation, purchasing, and supplier relationship management. According to the Chartered Institute of Procurement and Supply (CIPS), procurement involves “the buying of goods and services that enable an organisation to operate in a profitable and ethical manner” (CIPS, 2025)
The Procurement Act 2023
The Procurement Act 2023 introduces a transformative approach to public sector contracting, replacing outdated regulations with a more efficient, transparent, and inclusive framework. Designed to streamline procurement processes, the Act reduces administrative complexities, enhances accessibility through a central digital platform, and encourages greater participation from small and medium-sized enterprises (SMEs) by removing unnecessary bureaucratic barriers. Importantly, it shifts the focus of procurement decisions beyond cost alone, prioritising social value and sustainability to ensure long-term economic and environmental benefits. For social housing providers, these changes create a faster, fairer, and more adaptable procurement system, making securing contracts for retrofitting projects that support the UK’s net-zero goals easier.
The key features of the Procurement Act 2023 include (UK Government, 2025; CCS, 2023):
- Simplified and Flexible Procurement Procedures – The Act introduces a ‘competitive flexible procedure’, replacing rigid and prescriptive procurement methods. This flexibility allows social housing providers to design procurement processes that best suit their retrofitting projects, ensuring efficiency while maintaining compliance with public procurement rules.
- Improved transparency Through a Digital Procurement System – A central digital platform will be introduced to enhance transparency in procurement, ensuring that all public sector contracts are visible and accessible. This is particularly beneficial for social housing providers, where centralising information allows them to search for relevant suppliers, compare bids, and manage contracts more effectively (ProcurePlus, 2023).
- Enhanced Support for SMEs and Social Enterprises – The Act encourages the participation of SMEs and voluntary, community, and social enterprises (VCSEs) by reducing bureaucratic barriers and ensuring prompt payment terms (30-day payment period). This is crucial for retrofitting projects as it increases supplier diversity, allowing for more cost-effective and innovative solutions.
- New Procurement Review Unit (PRU) for Oversight -A PRU will be established to oversee procurement decisions and prevent unfair exclusion of suppliers. This ensures that social housing providers can challenge unfair procurement processes and secure better contract terms for their retrofitting projects.
- Prioritisation of Social Value in Procurement Decisions – The Act replaces the ‘most economically advantageous tender’ (MEAT) criterion with the ‘most advantageous tender’ (MAT). This means social housing providers can prioritise sustainability, social impact, and long-term value over cost alone when selecting suppliers for retrofitting initiatives.
How the Procurement Act 2023 Facilitates Social Housing Retrofits
The Procurement Act 2023 introduces transformative changes that will significantly impact social housing procurement, particularly in retrofitting efforts. While procurement professionals have expressed concerns about increased administrative burdens, ensuring compliance across organisations, and adapting to negotiation after nearly a decade of restricted tenders (Stapleford, 2023), the Act also presents substantial opportunities. The Act provides a strong foundation for accelerating retrofitting initiatives across the social housing sector by streamlining procurement processes, fostering competition, and prioritising sustainability.
Some key ways the Act supports retrofitting activities include:
- Reducing Administrative Burdens for Housing Associations – Procurement processes can be complex and time-consuming for many housing associations, especially for contracts valued below £5 million. The Procurement Act’s shift toward a less prescriptive approach significantly reduces administrative burdens, making procurement more efficient and accessible (RetrofitWorks, 2023).
- Increased Access to Qualified Suppliers – The Act fosters a more open and competitive procurement landscape, enabling housing associations to connect with a broader pool of contractors specialising in energy-efficient retrofitting. This expanded access encourages higher-quality work, greater innovation, and more cost-effective solutions for social housing retrofits.
- Greater Financial Certainty for Retrofitting Investments – One of the most significant changes under the Act is enhancing prompt payment terms, ensuring that contractors receive timely payments (RetrofitWorks, 2023). This reduces financial risk and improves cash flow stability, particularly for SMEs and local suppliers, encouraging greater participation in retrofitting initiatives.
- Encouraging Local and Sustainable Procurement – With a stronger emphasis on social value, the Act enables housing associations to prioritise:
- Locally sourced materials
- Energy-efficient solutions
- Sustainable contractors
This approach strengthens both environmental benefits and regional economic resilience by fostering local supplier engagement (RetrofitWorks, 2023).
Implications for Housing Associations, Local, and the Combined Authority in the West Midlands
The Procurement Act 2023 presents a critical opportunity to overcome key barriers in retrofitting social housing across the West Midlands. By simplifying procurement processes, reducing administrative burdens, and improving supplier access, the Act is set to enhance regional supply chains and foster economic growth (CCS, 2023; UK Government, 2025). The introduction of more flexible bidding procedures and prompt payment mechanisms will allow greater participation from SMEs, which dominate the local supply chain, while its emphasis on sustainable procurement strategies encourages the prioritisation of energy-efficient solutions and local suppliers. This alignment ensures that retrofitting projects contribute not only to environmental targets but also to the broader economic resilience of the region.
Procurement barriers significantly hinder large-scale retrofitting efforts in the West Midlands, delaying progress toward net-zero targets. Key challenges include limited funding, a fragmented supplier market, and stakeholder coordination issues. Many housing providers operate within short-term funding cycles, making planning and executing long-term retrofitting projects difficult (Rafique, 2025). Additionally, the dominance of SMEs in the supply chain presents difficulties in meeting procurement requirements, while strict regulatory frameworks often slow project implementation (Rafique and Yuan, 2025). The new framework directly addresses these issues by simplifying contract aggregation and introducing more flexible bidding processes, enabling housing associations to accelerate retrofitting projects and improve overall efficiency.
A study by Rafique and Yuan (2025) found that 65% of the 23 retrofitting contracts in the West Midlands in 2022 were valued at £500,000 or less. The existing procurement system creates bureaucratic obstacles that hinder project delivery, but the new framework aims to streamline these processes, allowing social housing providers to implement sustainability improvements more swiftly and effectively. However, a critical gap remains in supplier participation: the same study revealed that only 3 out of 20 suppliers involved in social housing retrofitting were based in the West Midlands. This highlights the need for targeted procurement strategies to encourage local supplier engagement, ensuring that the economic benefits of retrofitting stay within the region.
Another major challenge is contract duration. Rafique and Yuan (2025) found that half of all procurement notices issued in 2022 were for contracts lasting just one year or less—a significant issue given that retrofitting projects typically require longer timeframes to achieve meaningful sustainability outcomes. Moreover, their study indicated that SMEs dominate the retrofitting supply chain, with 13 out of 20 suppliers falling into this category. The Procurement Act’s reforms, particularly the introduction of competitive flexible procedures, have the potential to better accommodate SME participation while also fostering more stable, long-term contracts.
Despite the opportunities the Act presents, adapting to the new framework requires careful planning and implementation. Housing associations must update their internal procurement policies before the Act comes into effect in February 2025, ensuring alignment with the revised guidelines while maintaining operational efficiency. Staff training will also be crucial—procurement teams must familiarise themselves with the new digital procurement tools and competitive flexible procedures introduced under the Act. While these updates may present initial challenges, the delay in implementation has provided stakeholders with valuable time to prepare, ensuring a smoother transition (Messenger, 2024).
Ultimately, the Procurement Act 2023 offers a transformative opportunity for the West Midlands, enabling local authorities and housing providers to streamline procurement, enhance supplier access, and accelerate the region’s progress toward sustainability and net-zero targets. By addressing existing barriers and leveraging the Act’s new provisions, the region can ensure that retrofitting efforts contribute to both housing quality and long-term net-zero goals as well as economic growth.
References:
CCS (2023) Public Procurement Policy: UK Government.
CIPS (2025) What is Procurement?: Chartered Institute of Procurement and Supply.
Messenger, J. (2024) ‘Key details of Procurement Act still missing as sector welcomes delay to law‘, InsideHousing.
ProcurePlus (2023) How will the Procurement Act 2023 impact transparency, accountability, and value for money? Procure PLUS.
Rafique, A. (2025) Retrofitting Social Housing in the West Midlands Combined Authority (WMCA) Area: Overcoming Procurement Barriers for a Net-Zero Future: Innovation Procurement Empowerment Centre.
Rafique, A. and Yuan, P.-Y. (2025) Extracting Insights from Procurement Data – A Text Mining Approach for Social Housing Retrofits in the West Midlands, Innovation Procurement Empowerment Centre.
RetrofitWorks (2023) ‘The Procurement Act 2023: What it means for RetrofitWorks and its members‘ 2025].
Stapleford, G. (2023) ‘How can social housing providers get ready for the Procurement Bill?‘.
UK Government. (2025) Guidance: The Procurement Act 2023: A short guide for suppliers: Government Commercial Function.
This blog was written by Dr Annum Rafique, Research Fellow City-REDI, University of Birmingham.
Disclaimer:
The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI or the University of Birmingham.