Procurement in a Nutshell – The future of the Light Touch Regime

In December 2021 the Government published its response to the consultation and the comments raised by over 600 organisations and individuals. As a result we now have a clearer indication of the reforms that the Government intends to introduce.

The Government  plans to produce a draft Bill at some point in 2022. Further to the new legislation the Government will also introduce new secondary legislation or regulations to implement the new regime and produce  “a detailed and comprehensive package of published resources (statutory and non-statutory guidance on the key elements of the regulatory framework, templates, model procedures and case studies)” to help contracting authorities and suppliers understand how the new regime will work.

Due to significant changes and the amount of work required to bring this all into effect it is unlikely that the new regime will  be implemented until 2023 at the earliest. We can expect a draft Bill this year and the Government has said that it intends to give at least 6 months’ notice of “go-live”.

What this Nutshell covers

This Nutshell looks at the proposals for the future of the Light Touch Regime (LTR).

What the Green Paper said

In the Green Paper the government proposed removing the LTR altogether. It suggested that the new procurement rules for services would in themselves provide the flexibility currently given by the LTR, to the extent that a light touch regime would not be required. The LTR as it stands covers social, health, education and other services, up to a threshold of £663,540. Within the rules, a contracting authority is permitted to set its own procedure so long as it complies with the principles of fair procurement and the requirements of the WTO Agreement on Government Procurement. There are no specific time limits to apply other than a requirement to be ‘reasonable and proportionate’. The government suggested that the proposed new procurement rules would offer a regime very similar to that of the LTR, and the removal of the LTR would create greater ‘consistency’ within the procurement system. It would also eliminate any need for contracting parties to decide whether the LTR applied or not.

Results of the Consultation

Whilst there was a reasonable level of general support for the removal of the LTR, other responses, particularly from local authorities, raised significant concerns. These responses tended to focus on observations that the specific nature of the contracts awarded under LTR had not been fully considered, and that the impact on time critical and often individually tailored contract awards would be detrimental to the performance of the services.  This detriment would include the loss of flexibility in the award of the contracts, particularly with the imposition of a procurement timetable.

There was also concern raised that the lower threshold would increase the procurement burden on the SME and VCSE sectors, who currently provide many of the services under the higher threshold, but may not have the experience and capacity to comply with the full tender procedures, albeit more flexible, which they would fall within should the threshold be lowered. The knock-on effect of this may be that smaller enterprises stop bidding for the contracts, and that longer timescales for procuring contracts may affect the ability to react quickly and hence delay critical service provision.

The government has taken these points on board and is reconsidering how services can be supplied for those particular contracts ‘where service user choice is important’. The government has therefore recognised that there are some services where the full procurement process will not be appropriate, and has also recognised the legitimacy of the concerns around the lowering of the threshold for these services.

Consultation is continuing, primarily with regard to concerns raised by local authorities, to consider how procurement rules can sit alongside other responsibilities, for instance those contained in the Care Act 2014 and the Children’s and Families Act 2014.

What this means

The government is reviewing its suggested procedures and may even exempt certain services from competition. This will be welcomed by those contracting authorities for whom flexibility, timescales and the compatibility of the service provider is important. We will hear more on this. The LTR as a separate regime, however, is likely to go.

If you have any queries on the issues raised or on any aspect of procurement, please contact one of our procurement specialists via our procurement hotline on 0330 137 3451