Procurement thresholds will change from 1 January 2026 and most are decreasing. Note that the new limits continue to include VAT.
The government reviews procurement threshold limits every two years to account for currency changes and to comply with obligations to the World Trade Organisation. The threshold changes coming into effect on 1 January 2026 include:
- Works contracts (all authorities, including defence and security contracts that are a works or a concession contract, and also including utilities that are works contracts £5,193,000 (the current limit (until 1 January 2026) is £5,372,609).
- Contracts for the supply of goods, services or works to a central government authority £135,018 (down from £139,688).
- Contracts for the supply of goods, services or works to a sub-central government authority: £207,720 (down from £214,904).
Who’s Most Affected?
- Building works – new builds, refurbishments, major repairs will be more likely to hit the threshold of £5193,000
- Professional services – such as the appointments of architects, engineers, project managers, consultants if the work will exceed £135,000 for central government and over £207,720 for sub-central government, must follow procurement requirements
For full details of the thresholds that will apply from January 2026 see PPN 023:2026 here; for previous thresholds see here.
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