PPN 11/23: New Thresholds · first published 19 December 2023
This Procurement Policy Note (PPN) sets the new monetary thresholds that decide when a public contract must follow the full set of UK procurement regulations. These thresholds are revised every two years to reflect currency movements and the UK's obligations under the World Trade Organisation's Agreement on Government Procurement (GPA). The new figures apply from 1 January 2024 across central government and the wider public sector. Crucially, thresholds for small lots, Light Touch Regime (LTR) services, and below-threshold contracts have NOT changed. One forward-looking point: when the Procurement Act 2023 comes into force (expected Autumn 2024), contract values in notices must be stated inclusive of VAT rather than exclusive — the opposite of the current rule.
WHO THIS APPLIES TO
THE ENKII VIEW
For SMEs, the threshold changes are mostly operational housekeeping — they shift the line at which full procurement rules apply, but the rules themselves are unchanged. The more meaningful detail is the VAT flip: currently you quote contract values excluding VAT in notices, but under the incoming Procurement Act 2023 you will need to quote inclusive of VAT. SMEs should flag this to whoever prepares their bid responses and compliance checks, so they are not caught out when the new regime lands. The small lots thresholds (£70,778 for supplies/services, £884,720 for works) are unchanged, which is good news — buyers can still award small lots without triggering the full regime, keeping a route open for smaller suppliers.
1. Check that the contract you are bidding on sits above or below the new thresholds (£139,688 for central government supplies/services; £214,904 for other public bodies; £5,372,609 for works) — this determines whether the full procurement rulebook applies and what procedural rights you have.
All SMEs bidding for public contracts — The thresholds changed on 1 January 2024; using the old figures could lead you to misjudge your rights or the buyer's obligations under the Public Contracts Regulations 2015.
2. Note the higher supplies/services threshold of £429,809 under the Utilities Contracts Regulations 2016 and Defence and Security Public Contracts Regulations 2011 — contracts below this value do not carry the full suite of procedural protections.
SMEs bidding for utilities or defence/security contracts — The document sets a separate, higher threshold (£429,809) for utilities and defence/security supplies and services, distinct from the standard public contracts threshold.
3. Continue to seek small-lot awards (up to £70,778 for supplies/services, £884,720 for works) — these thresholds are unchanged and buyers can still award them without the full procurement regime applying.
SMEs pursuing small-lot opportunities — The document explicitly states small lots thresholds 'have not been amended', keeping this route open for smaller suppliers.
4. Update your bid-preparation process now: currently quote contract values EXCLUDING VAT in notices, but prepare to switch to INCLUDING VAT when the Procurement Act 2023 comes into force (expected Autumn 2024). Brief whoever drafts your bid responses.
All SMEs and bid teams preparing tender submissions — The document states that under the new legislation 'the estimated contract value must be provided inclusive of VAT' — the opposite of the current rule — and warns this change is coming in Autumn 2024.
Every rule below quotes the official document verbatim.
From 1 January 2024, central government supplies and services contracts (except subsidised services) trigger full procurement rules at £139,688. (Central government bodies (the Crown and bodies in Schedule 1 of the Public Contracts Regulations 2015), supplies and services contracts, from 1 January 2024.)
“Central Government bodies £139,688”
From 1 January 2024, other (non-central-government) public bodies' supplies and services contracts trigger full procurement rules at £214,904. (Public bodies other than central government, supplies and services contracts, from 1 January 2024.)
“Others £214,904”
From 1 January 2024, subsidised services contracts trigger full procurement rules at £214,904 for all bodies. (All contracting authorities, subsidised services contracts, from 1 January 2024.)
“Subsidised services contracts • All bodies £214,904”
From 1 January 2024, works contracts (including subsidised works) trigger full procurement rules at £5,372,609 for all bodies. (All contracting authorities, works contracts, from 1 January 2024.)
“Works (including subsidised works contracts) • All bodies £5,372,609”
The Light Touch Regime (LTR) threshold for services remains at £663,540 for all bodies and has NOT been updated. (All contracting authorities, light touch regime services, from 1 January 2024.)
“Light Touch Regime for Services • All bodies £663,540”
Small lots thresholds are unchanged: £70,778 for supplies and services, £884,720 for works, for all bodies. (All contracting authorities, small lots, from 1 January 2024.)
“The thresholds for small lots, light touch regime services and below threshold contracts are not subject to the two-year currency fluctuation amendment required to comply with our GPA obligations, and have not been amended.”
Under the Utilities Contracts Regulations 2016, supplies and services trigger full rules at £429,809 for all sectors from 1 January 2024. (Utilities contracting authorities, supplies and services contracts, from 1 January 2024.)
“The Utilities Contracts Regulations 2016 Supplies and Services • All sectors £429,809”
Under the Defence and Security Public Contracts Regulations 2011 (DSPSCR), supplies and services trigger full rules at £429,809 and works at £5,372,609 from 1 January 2024. (Defence and security contracting authorities, from 1 January 2024.)
“The Defence and Security Public Contracts Regulations 2011 Supplies and Services • All sectors £429,809 Works • All sectors £5,372,609”
Concession contracts trigger full Concession Contracts Regulations 2016 rules at £5,372,609 from 1 January 2024. (All contracting authorities, concession contracts, from 1 January 2024.)
“The Concession Contracts Regulations 2016 • Concession contracts £5,372,609”
Currently, estimated contract values in notices must be stated EXCLUDING VAT; under the incoming Procurement Act 2023 (expected Autumn 2024), they must be stated INCLUDING VAT. (All contracting authorities and suppliers, applicable when Procurement Act 2023 comes into force (expected Autumn 2024).)
“when the Procurement Act 2023 comes into effect, for the purposes of the publication of any notices under the new legislation, the estimated contract value must be provided inclusive of VAT”
The new thresholds come into effect from 1 January 2024. (All contracting authorities covered by the UK procurement regulations.)
“The new thresholds come into effect from 1 January 2024.”
The PPN applies to all contracting authorities: central government departments, executive agencies, non-departmental public bodies (NDPBs) and other public sector organisations. (All contracting authorities as defined by UK regulations.)
“The contents of this PPN apply to all contracting authorities, as defined by the UK regulations. This includes all central government departments, their executive agencies, non-departmental public bodies and other public sector organisations.”
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.