Procurement in a Nutshell – The Local Government (Exclusion of Non-Commercial Considerations) (England) Order 2026
12th December, 2025
A draft Order has been laid before Parliament under section 19(3) of the Local Government Act 1999 and section 122(4)(o) of the Procurement Act 2023, for approval by the Houses of Parliament.
The Order is named ‘The Local Government (Exclusion of Non-Commercial Considerations) (England) Order 2026’.
What is it?
When made, the Order will disapply section 17(5)(e) of the Local Government Act 1988 in certain areas, allowing relevant authorities to reserve bidding for below-threshold contracts to local or UK-based suppliers.
The Order follows the National Procurement Policy Statement (NPPS) published in February 2025 which recommended that contracting authorities focus on delivering social and economic value when awarding contracts. This is to be achieved in part though encouraging the participation of small businesses.
Relevant changes and what this means for you
Section 17(5) of the Local Government Act 1988 contains a list of non-commercial matters that local authorities are currently prohibited from considering when undertaking particular public procurement functions. This includes: the country or territory of origin of supplies to, or the location in any country or territory of the business activities or interests of, contractors (section 17(5)(e)).
This new Order will disapply section 17(5)(e), but only in relation to below-threshold contracts where a relevant authority has, before inviting the submissions of tenders, determined that contractors based outside either the UK or the local area may not participate on the procurement. In this instance, ‘local area’ means the relevant authority or authorities’ areas and can include any bordering countries or London boroughs.
If an authority is advertising one of these contracts, it must state in the advertisement of the tender that it is being reserved for contractors in the UK or the local area. If the latter, local area must be specified i.e. which local area it is reserved for. This Order will amend regulation 24 of the Procurement Regulations 2024 to take into account this requirement.
Conclusion
The thought behind these amendments is to allow relevant authorities to reserve bidding for lower-value contracts to just the UK or local suppliers. The government predicts this reform will permit £1 billion of public spending to be reserved in this way.
For further information please contact Melanie Pears or Tim Care in our Public Sector team.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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