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On 22 September 2025, the Competition and Markets Authority (CMA) published its response to the Cabinet Office's June 2025 consultation on further reforms to public procurement to ensure that public procurement improves domestic competitiveness, strengthens the UK's economic resilience and supports British businesses).
The CMA considers that public procurement represents a potentially powerful policy lever for advancing economic objectives. As a strategically significant purchaser, government can shape and influence industry structures, and the parameters of competition, through its procurement practices.
In line with the consultation's aim to ensure public procurement delivers wider economic objectives, the CMA proposes that it should be used to proactively shape markets. In particular, government can use public procurement to encourage scale-ups and drive market dynamism, build capacity and resilience, deliver long-term value for money, and improve quality and innovation.
The CMA notes that there are challenges to proactive market-shaping in public procurement (such as lack of capacity and resourcing, misaligned incentives and ineffective co-ordination), but it sets out practical ways in which this can be done. In particular, policy teams need a thorough understanding of the relevant markets and clear policy objectives, including a vision of what a well-functioning, successful market looks like for government.
The CMA sets out, with examples, how to achieve the identified objectives through effective preparation, engagement and market signalling, addressing barriers to entry and expansion, addressing switching barriers, harnessing the scale of public procurement and increased co-ordination, and creating incentives that go beyond price competition (such as innovation and quality).
Date: 26 September