$500 idea · Pattern break · United Kingdom · Edition 004
A council may not bar your tender for inexperience below £207,720.
Section 85(1) of the Procurement Act 2023 has been in force since 24 February 2025. Where a contracting authority invites tenders for a regulated below-threshold contract, it “may not restrict the submission of tenders by reference to an assessment” of a supplier’s suitability. Section 85(2) defines suitability as the supplier’s legal and financial capacity and its technical ability. The only carve-out, in section 85(3), is works contracts at or above £135,018 — or £207,720 for a council. Goods and services get no carve-out at all.
Read that again as a buyer would. A district council wanting a £200,000 piece of consultancy cannot run a pre-qualification stage. It cannot require three years of audited accounts, a minimum turnover, a professional indemnity floor or two comparable references as a condition of submitting a tender. It may still evaluate quality at award, and it may still lose nothing by choosing the incumbent. But it may not keep you out of the room, and the prohibition is statutory, not a policy that a procurement officer can waive on a bad day.
The number that fixes the ceiling was set this year. Schedule 1, row 12 of the Act puts goods or services to a sub-central authority below threshold up to £207,720; row 11 puts central government at £135,018. Both figures were substituted with effect from 1 January 2026 by SI 2025/1200, signed by Chris Ward, Parliamentary Secretary at the Cabinet Office, on 18 November 2025. The same minister signed SI 2026/360 on 23 March 2026, whose regulation 5 came into force on 1 October 2026 and strips the last Contracts Finder publication duties out of the 2015 Regulations, substituting the central digital platform. As of this month there is one place where these notices appear.
And they must appear. Section 87(4) makes a below-threshold contract “notifiable” at £12,000 for central government and £30,000 for everyone else, VAT included; above that line the authority must publish a tender notice, and must publish it on the platform before advertising anywhere else. So the band that matters — £30,000 to £207,720 for a council — is simultaneously the band where advertising is compulsory and filtering is unlawful. Two live examples, both posted in the last week: South Staffordshire District Council wants a Local Plan Viability Study at £72,000, and Rutland County Council wants design consultancy for Oakham East at £108,000, flagged on the notice as “particularly suitable for small and medium-sized enterprises”.
Now the part that is not in the press releases. Section 85(5)(c) says the prohibition “does not apply” to a contract awarded in accordance with a framework. The filter did not disappear in February 2025. It moved. The Public Accounts Committee found that government use of frameworks for large contracts had already risen from 20% of contracts by value in 2018–19 to 68% in 2021–22, and inside a framework every suitability test you were promised relief from is lawful again. That is the whole trade: the open ground is the contracts a buyer cannot route through a framework, and from this month they all surface in one feed.
The evidence
12 findingsIt “may not restrict the submission of tenders by reference to an assessment”.
Section 85(1): where a contracting authority invites tenders for a regulated below-threshold contract, it may not restrict the submission of tenders by reference to an assessment of a supplier’s suitability to perform the contract. Section 85(2): suitability includes the supplier’s legal and financial capacity and its technical ability. Commenced 24 February 2025 by SI 2024/716, Schedule, as amended by SI 2024/959. The Cabinet Office’s own guidance puts it plainly: authorities “cannot restrict the submission of tenders by reference to suppliers’ suitability to perform the contract”, so there can be no separate suitability stage narrowing the field before tenders are submitted. Section 85 · Below-threshold guidance
The ceiling was re-cut this year at £207,720.
The Procurement Act 2023 (Threshold Amounts) (Amendment) Regulations 2025 substituted £135,018 for £138,760 in section 85(3)(a) and £207,720 for £213,477 in section 85(3)(b), and made the matching substitutions at rows 11 and 12 of Schedule 1 — goods, services or works to a central government authority, and to a sub-central authority. Signed by Chris Ward, Parliamentary Secretary, Cabinet Office, on 18 November 2025 and laid before Parliament on 21 November 2025. The thresholds track the WTO Government Procurement Agreement and are revised every two years. Note the asymmetry: the section 85(3) carve-out is confined to works contracts, so a council’s goods and services spend is unfilterable across the whole £0–£207,720 band. SI 2025/1200 · Schedule 1 · PPN 023
Above £30,000 they are obliged to tell you it exists.
A regulated below-threshold contract is “notifiable” where its estimated value is at least £12,000 for a central government authority that is not a devolved Welsh authority, and at least £30,000 for any other contracting authority — both figures including VAT. Section 87(1): without publishing a below-threshold tender notice first, the authority “may not advertise for the purpose of inviting tenders”. The guidance adds that the notice “must be published on the central digital platform before being published elsewhere”. Section 87(3) then requires a contract details notice after the contract is entered into. The exception in 87(2) is an approach to particular or pre-selected suppliers. Section 87
Paid in 30 days, and no minister may make it longer.
Section 88(1) implies payment terms into every regulated below-threshold contract entered into by a contracting authority, and 88(8) extends them down into subcontracts. Section 88(2): a sum due “must be paid before the end of the period of 30 days beginning with” receipt of the invoice or the day the sum became due, whichever is later. Section 88(10): “Any term purporting to restrict or override the terms implied by this section is without effect.” Section 88(11) permits earlier payment; section 88(12) lets a Minister of the Crown or the Welsh Ministers change the number of days by regulations — but not above 30. Parliament wrote a one-way ratchet into a payment term. Section 88
From this month there is one feed, not two.
The Procurement (Amendment) Regulations 2026, made 23 March 2026 and signed by Chris Ward, Parliamentary Secretary, Cabinet Office, on 23 March 2026. Regulation 5 amends the Procurement Act 2023 (Commencement No. 3 and Transitional and Saving Provisions) Regulations 2024 to read a definition of “central digital platform” into the Public Contracts Regulations 2015 and to remove the Contracts Finder publication requirements in regulations 106, 108 and 112 of those Regulations, substituting the central digital platform. Regulation 1 sets its commencement: regulation 5 “come[s] into force on 1st October 2026”. The same instrument, from 1 April 2026, also requires a below-threshold supplier to register on the platform and supply a unique identifier before the contract details notice is published. SI 2026/360
Two councils, £180,000, both open competition, both closing in November.
South Staffordshire District Council, “Local Plan Viability Study”, notice 2026/S 000-097320, reference IA4029: £72,000 including VAT, marked “Below the relevant threshold”, procedure “Below threshold — open competition”, published 15 October 2026, tenders due 9 November 2026. Rutland County Council, “Oakham East Transport and Public Realm Improvements — Multidisciplinary Preliminary Design Consultancy Services”, notice 2026/S 000-096443: £90,000 excluding VAT, £108,000 including VAT, below threshold, open competition, reserved to UK suppliers and flagged “particularly suitable for small and medium-sized enterprises”, published 13 October 2026, tenders due 10 November 2026. Neither notice states a condition of participation. South Staffordshire · Rutland
An SME took £74,400 of it in January, and the notice names the company.
Contract details notice 2026/S 000-004196: Epsom and Ewell Borough Council, contract “Victoria Forms”, £62,000 excluding VAT and £74,400 including VAT, marked below the relevant threshold. Supplier: Victoria Solutions Limited, Companies House number 04624804, flagged on the notice as a small or medium-sized enterprise. The register shows the company incorporated on 24 December 2002, active, registered at Sentry House, 110b Northgate Street, Bury St Edmunds, Suffolk IP33 1HP, SIC 62012 business and domestic software development, latest accounts made up to 31 March 2025. The UK7 notice is the thing worth reading, not the UK4: it tells you the value a buyer actually paid, and who to displace. Notice 004196-2026 · Companies House 04624804
“Around £400 billion of tax income is spent every year on public procurement.”
“Public procurement in the national interest: reflections from the CMA”, with a foreword by Doug Gurr, Chair, and Sarah Cardell, Chief Executive. The paper treats bid costs and pre-qualification requirements as entry barriers in their own right, and estimates that on a conservative assumption that 2% of UK public procurement is affected by bid rigging, overpayment runs to £1bn a year and possibly £3.5bn. It notes the share of cartel decisions involving bid rigging rose from 34% to 47% between 2021 and 2024, and that fewer than one fifth of cartels are detected. The regulator’s own reading of the market is that competition at the small end is thin, not crowded. CMA reflections
Framework use went from 20% to 68% of large-contract value.
“Competition in public procurement”, Sixth Report of Session 2023–24, chaired by Dame Meg Hillier MP: “Government use of frameworks for large contracts increased from 20% of contracts by value in 2018–19 to 68% in 2021–22” (para 20). The same report found that across 235 large contracts on Find a Tender between January 2021 and January 2023, 20% of contracts using open competition received only one bid (para 7), and that the Crown Commercial Service runs 86 frameworks covering roughly £120bn of about £260bn of annual spend (para 22). This is the counterweight, and it is why the finding above is a trade rather than a slogan: section 85(5)(c) disapplies the prohibition to any contract awarded in accordance with a framework. The figures predate the Act, and should be read as direction, not as a current measurement. PAC report (PDF)
HM Treasury is at 14.4% against a target of 22%.
Direct SME spend, 2024/25: Cabinet Office £96m of £427m, 22.5%, against a target of 30% by the end of 2027/28; HM Treasury £11.1m of £77.2m, 14.4%, against 22%. Three-year SME direct spend targets have applied since 1 April 2025 and VCSE targets since 1 April 2026, set under the National Procurement Policy Statement of February 2025. Forewords by Chris Ward, Parliamentary Secretary at the Cabinet Office, and Lord Livermore, Financial Secretary to the Treasury; Shirley Cooper is named as SME Crown Representative. The plan also records that the public sector must pay suppliers within 30 days, with the Cabinet Office at 96% and HM Treasury at 99% of invoices inside that window in Q1 2025/26. A published shortfall is a buying signal, not a statistic. SME Action Plan 2025–2028
£1 = $1.3456, 1–31 October 2026.
HMRC’s published monthly exchange rate for the USA, valid 1 to 31 October 2026. Used for every conversion on this page. October 2026 rates
21.47% of one contract at the cliff. Or 4.66 years of it.
$500 ÷ 1.3456 = £371.58. $5,000 ÷ 1.3456 = £3,715.81 a month, × 12 = £44,589.77 a year. Against the council ceiling: £44,589.77 ÷ £207,720 = 21.47%, and £207,720 ÷ £44,589.77 = 4.66 years. Against the two live notices: £108,000 ÷ £44,589.77 = 2.42 years; £72,000 ÷ £44,589.77 = 1.61 years; the January award of £74,400 = 1.67 years. Count of contracts needed in a year: at the £30,000 notice threshold, 1.49; at £12,000, 3.72. Working capital under section 88: 365 ÷ 30 = 12.17 turns a year, so £371.58 of cash laid out per cycle supports £4,520.90 of outlay a year. Scale: £400,000,000,000 ÷ £44,589.77 = one 8,970,667th of annual UK public procurement. Diagram: x = 80 + 164.1708 × (log₁₀V − 3), giving x = 257.2 at £12,000; 322.5 at £30,000; 350.8 at £44,589.77; 384.9 at £72,000; 413.8 at £108,000; 429.7 at £135,018; 460.5 at £207,720; 690.0 at £5,193,000.
The ladder
From $500 to $5,000 a month · £375 → £3,749$500 is £371.58 at HMRC’s October rate. Nothing in the below-threshold regime charges a supplier a fee: registering on the central digital platform costs nothing, there is no accreditation body and no bond. The reason most people never bid is not the money, it is the belief that they would be screened out. Section 85(1) makes that screen unlawful. Read it before you read anything about how to write a tender.
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Stop disqualifying yourself.
$500 is £371.58 at HMRC’s October rate. Nothing in the below-threshold regime charges a supplier a fee: registering on the central digital platform costs nothing, there is no accreditation body and no bond. The reason most people never bid is not the money, it is the belief that they would be screened out. Section 85(1) makes that screen unlawful. Read it before you read anything about how to write a tender.
£371.58 in hand · £0 of it required to tender -
Learn exactly where the cliff is.
A council’s goods and services spend is unfilterable up to £207,720; central government’s up to £135,018. Above those lines you are in the full regime, where conditions of participation are lawful. The one trap is works: section 85(3) hands the filter back on a works contract at or above the same figures, even though works stay below threshold all the way to £5,193,000. If you can sell either, sell services.
services: £0–£207,720 clean · works: filtered from £207,720 -
Watch one feed, from this month.
Regulation 5 of SI 2026/360 came into force on 1 October 2026 and took the residual Contracts Finder duties out of the 2015 Regulations in favour of the central digital platform. Filter for “Below threshold — open competition” and read the UK4 tender notices; then read the UK7 contract details notices behind them, because those carry the value the buyer actually paid and the name of the supplier you would be displacing.
UK4 = the opening · UK7 = the price and the incumbent -
Refuse the frameworks.
This is the discipline the route lives or dies on. Section 85(5)(c) disapplies the whole prohibition to a contract awarded in accordance with a framework, and the PAC traced framework use up to 68% of large-contract value by 2021–22. A framework call-off looks like public work and is not: inside one, every suitability test you were relieved of is lawful again, and the incumbent set the terms. Bid only what a buyer has put out as an open below-threshold competition.
s.85(5)(c): the prohibition “does not apply” to a framework -
Let section 88 be your balance sheet.
Thirty days, implied into the contract whether or not anyone drafts it, and section 88(10) voids any term that tries to override it. Section 88(12) lets a minister shorten the period and forbids lengthening it past 30. On £371.58 of working capital that is 12.17 turns a year. No private customer owes you that, and none can be compelled to give it.
365 ÷ 30 = 12.17 turns · £371.58 → £4,520.90 of outlay a year -
Price against the buyer’s own published shortfall.
Section 86 obliges an authority to consider the barriers SMEs face and whether they can be reduced. PPN 005 lets central government reserve a below-threshold competition to a county, or to a London borough, and to SMEs and VCSEs on top of that location reservation. And departments publish how far behind they are: HM Treasury at 14.4% direct SME spend against a 22% target. You are not asking for a favour; you are the number they have to move.
HMT 14.4% v 22% · Cabinet Office 22.5% v 30% -
One contract at the cliff is 4.66 years of the target.
£44,589.77 a year is 21.47% of a single £207,720 council contract that, by statute, cannot be closed to you before you tender. The Rutland notice alone is 2.42 years of it, the South Staffordshire notice 1.61. The CMA puts annual UK public procurement at around £400bn; the target is one 8,970,667th of it.
£44,589.77 ÷ £207,720 = 21.47% · £3,715.81/mo = $5,000
Sources
16 primary documents- Procurement Act 2023, section 85 — restriction on assessing supplier suitability; in force 24 February 2025 (SI 2024/716, Sch., as amended by SI 2024/959)
- Procurement Act 2023, section 87 — below-threshold tender notices; £12,000 / £30,000 notifiable thresholds
- Procurement Act 2023, section 88 — implied 30-day payment terms; s.88(10) anti-avoidance; s.88(12) ceiling of 30 days
- Procurement Act 2023, Schedule 1 — threshold amounts, rows 11 and 12
- The Procurement Act 2023 (Threshold Amounts) (Amendment) Regulations 2025, SI 2025/1200 — signed Chris Ward, Parliamentary Secretary, Cabinet Office, 18 November 2025; in force 1 January 2026
- The Procurement (Amendment) Regulations 2026, SI 2026/360 — made 23 March 2026, signed Chris Ward; regulation 5 in force 1 October 2026
- Cabinet Office, Guidance: Below-Threshold Contracts
- PPN 023: 2026 Threshold Amounts — Cabinet Office, issued November 2025
- Find a Tender UK4 notice 2026/S 000-097320 — South Staffordshire District Council, Local Plan Viability Study, £72,000 inc VAT, published 15 October 2026
- Find a Tender UK4 notice 2026/S 000-096443 — Rutland County Council, Oakham East design consultancy, £108,000 inc VAT, published 13 October 2026
- Find a Tender UK7 notice 2026/S 000-004196 — Epsom and Ewell Borough Council to Victoria Solutions Limited, £74,400 inc VAT, signed 15 January 2026
- Companies House, Victoria Solutions Limited, 04624804
- CMA, Public procurement in the national interest: reflections from the CMA — published 8 September 2026, updated 14 October 2026; foreword by Doug Gurr and Sarah Cardell
- Public Accounts Committee, Competition in public procurement, HC 385 — 13 December 2023, chaired by Dame Meg Hillier MP
- Cabinet Office and HM Treasury SME Action Plan 2025 to 2028 — published 24 March 2026
- HMRC trade tariff, October 2026 monthly exchange rates