How new procurement rules and frameworks could unlock complex urban regeneration

30.04.24 4 min read by James Pitt

In October 2024, the Procurement Act 2023, which gained Royal Assent in autumn will pass into UK law.

The new Act has been designed to remove barriers in how the public sector and contracting authorities procure and access a whole range of services by creating a simpler, more flexible commercial system.

James Pitt, Regional Managing Director, Yorkshire and North East shares his thoughts on the likely impact of the new changes for the property sector and how it could further help to unlock complex urban regeneration.

As a sector we’ve become familiar with the current ‘Find a Tender’ process, which replaced OJEU in the UK in 2021, when the EU rules on public procurement ceased to apply to and in the UK.

There are many benefits to the ‘Find a Tender’ system; transparency and open competition and by appointing the ‘most economically advantageous tender’, with different stages to retain competitive tension, the process ensures there is a hard focus on delivering value.

This procurement process can take time, often stretching over a period of months and potentially adding additional risk to projects.  This is because viability might change as developers work towards finalising a development agreement, and having to meet grant funding timescales.

The new procurement legislation will hopefully lead to better outcomes for all as it sets out a number of measures to overcome the current challenges which have been recognised by Government. This includes less prescriptive procedures and award of contract for the most advantageous tender, removing reference to ‘economically’ to now mean the tender which the contracting authority considers best satisfies its requirements and the award criteria.

The new Act also provides more scope to flex a contract once awarded with modification gateways, and overall, promotes greater focus on the whole lifecycle of the project.

Outside of the new legislation, there are also frameworks such as Pagabo and the Homes England DPS (Dynamic Purchasing System), which allow for direct appointments and are real game changers for unlocking brownfield regeneration at pace.

Frameworks allow public sector partners to choose from prequalified suppliers, helping to shorten the procurement process. And with it, unlocking a range of benefits which will help to deliver positive impact and change in communities quickly including social value, sustainability, new jobs, work placements and apprenticeships.

At Muse, we know that this is an approach that works effectively and one that fosters greater partnership working, as we are discovering on projects such as Bradford City Village.

Through an expedited direct appointment, we’ve been able to commence collaborative working with Bradford Metropolitan District Council, West Yorkshire Combined Authority and Homes England on a shared journey to deliver 1,000 new homes in the heart of the city centre. While there is still a way to go to with the scheme to ultimately deliver regeneration of a complex piece of the city’s retail and office core, working through many problems early has brought several benefits to the process which include the following:

Flexibility and responsiveness

Using a framework and seeking early developer engagement at the beginning of the process allows a tender and design to evolve more easily.  Also, onboarding a preferred developer with a precedent agreement can mean a streamlined approach to legal completion and delivery which helps support viability in the long term.

Access to time and expertise

We are all aware of the significant pressures on the public sector and the austerity and budget challenges they face. Focussed direct awards can allow public sector partners to access the additional expertise and resource that the private sector brings much earlier in the process, at a pre-procured competitive price.

Making incremental progress is better than trying to eat the elephant

Complex urban regeneration faces significant hurdles, all of which need to be overcome through the lifetime of a project. When working with existing communities or sites with specific challenges, it’s fundamentally important to be able to prioritise and solve these problems incrementally, instead of having to tackle them all at once.

De-risking projects

Frameworks and direct appointments at earlier stages in the procurement process can also help build the most comprehensive business case to progress development with the right solutions. They can give partners the confidence to enter into development agreements with their eyes open, safe in the knowledge that when accessing funding, projects will be delivered at pace to meet conditions on time and within cost.

Fundamentally, established frameworks and purchasing systems sitting alongside the new Procurement Act will allow for more creative routes to compliant procurement processes. This will support greater partnership working, and create more resilient oven-ready developments to deliver a brighter future for our Northern towns and cities, and the communities we operate in.

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How new procurement rules and frameworks could unlock complex urban regeneration