PPN 023: 2026 Threshold Amounts · first published 27 November 2025
This Procurement Policy Note (PPN 023) sets new monetary thresholds that determine when a public contract must follow the full rules of the Procurement Act 2023 (PA23). The thresholds are revised every two years to reflect currency movements and keep the UK in line with its World Trade Organisation (WTO) Agreement on Government Procurement (GPA) obligations. From 1 January 2026, the main threshold for central government goods, services and works contracts rises to £135,018, and for sub-central government (councils, NHS, etc.) it rises to £207,720. The new thresholds apply to any procurement that starts on or after 1 January 2026 — procurements already underway are unaffected. These thresholds matter to small businesses because contracts above them must be advertised and run under the full PA23 regime, meaning more transparency and formal bidding rights; contracts below them are lighter-touch.
WHO THIS APPLIES TO
THE ENKII VIEW
The modest upward movement in thresholds is a marginal positive for small businesses: slightly more contracts can now be awarded below the full PA23 regime, giving buyers a little more flexibility for lower-value, quick-turnaround work where SMEs (small and medium-sized enterprises) often compete well. Conversely, any contract a buyer does put through the full PA23 process above these thresholds must be openly advertised, preserving the visibility that SMEs rely on to find opportunities. SMEs should update their opportunity-monitoring filters to the new figures so they don't miss newly advertised contracts or misread a buyer's procedure choice.
1. Update your opportunity-search filters on Find a Tender, Contracts Finder and any other portals to the new thresholds (£135,018 for central government; £207,720 for sub-central) so you catch every newly advertised contract from 1 January 2026.
All SMEs bidding for public contracts — Contracts at or above these values must be advertised under the full PA23 regime from 1 January 2026; using outdated thresholds in your search filters risks missing opportunities or misunderstanding a buyer's procedure.
2. Note that the light touch contract threshold is £663,540 (non-concession) — if you are bidding for contracts in these categories, check whether your contract sits above or below this figure, as it determines the rules the buyer must follow.
SMEs in the social care, health or other light touch services sectors — Light touch contracts follow a lighter version of PA23 rules; knowing the correct threshold helps you anticipate the process and timeline a buyer will use.
3. Be aware the works contract threshold remains £5,193,000 — advertised works opportunities above this value must follow the full PA23 regime, giving you formal bidding rights and transparency protections.
SMEs in construction, infrastructure or works contracting — Works contracts not within the defence/security, utilities or concession categories trigger the full PA23 regime at £5,193,000 from 1 January 2026.
4. Check whether your procurement was formally commenced (tender notice published or invitation issued) before 1 January 2026 — if so, the old thresholds apply throughout; if it starts on or after that date, the new thresholds apply.
SMEs currently in a procurement process or about to start one — The document is explicit that 'the new threshold amounts do not affect any procurement commenced before 1 January 2026', so the commencement date determines which set of rules governs your bid.
Every rule below quotes the official document verbatim.
The new threshold amounts come into effect on 1 January 2026 and apply to any procurement commencing on or after that date. (All in-scope contracting authorities, procurements commencing on or after 1 January 2026)
“The new threshold amounts will come into effect on 1 January 2026. As such, in-scope organisations must apply the provisions of this PPN in respect of any procurements that will commence on or after 1 January 2026.”
This PPN applies to all contracting authorities including central government departments, executive agencies, non-departmental public bodies, and the wider public sector. (All contracting authorities as defined in section 2 of PA23)
“This PPN applies to all contracting authorities, as defined in section 2 of PA23. This includes all central government departments, their executive agencies, non-departmental public bodies and the wider public sector.”
Contracts for the supply of goods, services or works to a central government authority (not falling into any other category) must follow the full PA23 regime at or above £135,018. (Central government authorities, goods/services/works contracts, from 1 January 2026)
“Contract for the supply of goods, services or works to a central government authority not within any other row £135,018”
Contracts for the supply of goods, services or works to a sub-central government authority (not falling into any other category) must follow the full PA23 regime at or above £207,720. (Sub-central government authorities, goods/services/works contracts, from 1 January 2026)
“Contract for the supply of goods, services or works to a sub-central government authority not within any other row £207,720”
Works contracts (not defence/security, utilities or concession) trigger the full PA23 regime at or above £5,193,000. (All in-scope contracting authorities, works contracts (excluding defence/security, utilities, concession), from 1 January 2026)
“Works contract not within row 1, 4 or 9 £5,193,000”
Utilities contracts for goods or services (not works or light touch) trigger the full PA23 regime at or above £415,440. (Utilities contracting authorities, goods/services contracts, from 1 January 2026)
“Utilities contract not within row 3, 4 or 5 £415,440”
Utilities works contracts trigger the full PA23 regime at or above £5,193,000. (Utilities contracting authorities, works contracts, from 1 January 2026)
“Utilities contract that is a works contract £5,193,000”
Light touch contracts (not concession or utilities) trigger the full PA23 regime at or above £663,540. (All in-scope contracting authorities, light touch contracts, from 1 January 2026)
“Light touch contract not within row 5 or 7 £663,540”
Light touch concession contracts trigger the full PA23 regime at or above £5,372,609. (All in-scope contracting authorities, light touch concession contracts, from 1 January 2026)
“Light touch contract that is a concession contract £5,372,609”
Utilities light touch contracts trigger the full PA23 regime at or above £884,720. (Utilities contracting authorities, light touch contracts, from 1 January 2026)
“Utilities contract that is a light touch contract £884,720”
Concession contracts (not defence/security, utilities or light touch) trigger the full PA23 regime at or above £5,193,000. (All in-scope contracting authorities, concession contracts, from 1 January 2026)
“Concession contract not within row 2, 6 or 7 £5,193,000”
Defence and security works contracts and concession contracts trigger the full PA23 regime at or above £5,193,000. (Defence and security contracting authorities, works and concession contracts, from 1 January 2026)
“Defence and security contract that is a works contract £5,193,000”
Defence and security contracts (not works, concession, or light touch) trigger the full PA23 regime at or above £415,440. (Defence and security contracting authorities, goods/services contracts, from 1 January 2026)
“Defence and security contract not within row 1, 2 or 8 £415,440”
A procurement is considered 'commenced' when a tender notice, transparency notice or below-threshold tender notice has been published, or a supplier has been invited or contacted to begin the award process. (All in-scope contracting authorities, all contract types)
“a procurement is commenced where a tender notice, transparency notice or below-threshold tender notice has been published in respect of that procurement, or the contracting authority has invited the submission of tenders in respect of a regulated below-threshold contract or has otherwise contacted a supplier to commence the award of a below-threshold contract.”
Thresholds are revised every two years to reflect currency fluctuations and maintain compliance with WTO GPA obligations. (All in-scope contracting authorities)
“They are revised every two years to take account of currency fluctuations, and to ensure the UK complies with its obligations under the World Trade Organisation's Agreement on Government Procurement (GPA).”
This briefing is enkii's interpretation of the official document — the official text always governs.
Source document © Crown copyright, reused under the Open Government Licence v3.0 via the GOV.UK Content API. enkii tracks every Procurement Policy Note and briefs changes the day they land — see all briefings.