UK procurement thresholds change from 1 January 2026
From 1 January 2026, the rules on how much public bodies must advertise and compete contracts are changing. If you buy for a school, council, NHS trust or a charity that spends public money, it’s worth saving the date now. This is an explainer to help you, your students or your team understand what is changing and why.
Ministers have signed off the Procurement Act 2023 (Threshold Amounts) (Amendment) Regulations 2025 (S.I. 2025/1200). The instrument was made on 18 November 2025, laid before Parliament on 21 November, and comes into force on 1 January 2026. It is made under section 85 and Schedule 1 of the Procurement Act 2023, with consent from Northern Ireland’s Department of Finance.
Thresholds are the cash values that decide which set of procurement rules you must follow. The Cabinet Office has reviewed them to keep the UK aligned with the World Trade Organization’s Government Procurement Agreement (GPA), which periodically updates international thresholds and expects countries to convert them into local currency. The update also fixes an oversight so that the statute reads consistently across the sections that refer to the same numbers.
Two figures in section 85(3), which shape the procedure for regulated below‑threshold works contracts, are revised. The previous amounts of £138,760 and £213,477 are replaced by £135,018 and £207,720. The Explanatory Note says these figures are now consistent with rows 11 and 12 of Schedule 1, which were meant to align.
Most of Schedule 1’s threshold amounts are updated at the same time. Rows 4, 6 and 9 to 12 are set by the GPA and are adjusted accordingly; rows 1 to 3 do not come directly from the GPA but are amended for consistency so that supplies, services and works sit in a tidy framework. If you teach procurement, this is a neat example of how international rules map into domestic law.
Devolution is built in. Contracts regulated by the Welsh Ministers are excluded from this UK‑wide instrument, and Welsh Ministers will make a separate statutory instrument to update thresholds for devolved procurements. A new clarification explains that a contract is regulated by the Welsh Ministers if it is awarded by a devolved Welsh authority outside any reserved or transferred arrangement, or if it is run under a devolved Welsh procurement arrangement.
Procurements already under way are protected by transition rules. If before 1 January 2026 you have published a tender notice or a transparency notice, published a below‑threshold tender notice, invited tenders for a below‑threshold contract, or contacted a supplier to begin awarding a below‑threshold contract, you carry on under the old thresholds. In practice: if you started before New Year’s Day, you don’t need to restart because of these changes.
What this means in the real world. Imagine a council planning small works in early January. If your estimate sits near the updated section 85(3) figures, the path you choose - publish a below‑threshold tender notice, invite competition in the light‑touch way the Act allows, or select another permitted route - will be shaped by the new amounts. Pipelines drafted to the old numbers deserve a quick sense‑check now, so you are not scrambling during the first week back.
A short glossary for class and team briefings. GPA is the Government Procurement Agreement managed by the WTO. A threshold amount is the price point that triggers a particular legal route. A regulated below‑threshold contract sits under the main GPA‑level thresholds but still follows the Act’s lighter‑touch rules. A reserved procurement arrangement is when a UK authority runs a process on behalf of others; a transferred Northern Ireland procurement arrangement is a cross‑border process with NI bodies; a devolved Welsh authority is a public body whose functions are devolved to Wales.
Next steps for buyers and suppliers. Update your threshold tables, training slides and templates; re‑check any January to March awards against £135,018 and £207,720 where relevant to below‑threshold works; and agree who will sign off any notice changes over the winter break. If you work with Welsh authorities, ask for their timetable because their thresholds will be set separately. The Cabinet Office does not expect significant impact on businesses or the voluntary sector, but clarity now will save time later.