The Cabinet Office has made Statutory Instrument 2025 No. 1200 to update the financial thresholds in the Procurement Act 2023. The instrument was made on 18 November 2025, laid before Parliament on 21 November 2025, and comes into force on 1 January 2026. It is issued under section 85(4) and paragraph 2 of Schedule 1, with consent from the Department of Finance for Northern Ireland under section 113(4). The stated purpose is to keep UK thresholds aligned with the World Trade Organization’s Agreement on Government Procurement (GPA).
Two monetary tests in section 85(3) for regulated below‑threshold works contracts are corrected and reduced. Paragraph (a) moves from £138,760 to £135,018 and paragraph (b) from £213,477 to £207,720. The Explanatory Note confirms this resolves an earlier omission when thresholds were updated by S.I. 2025/163, and brings section 85 into line with the values shown against rows 11 and 12 in Schedule 1.
Schedule 1 is re‑framed so that it now presents two sets of figures. A dedicated column applies when a contract is regulated by the Welsh Ministers; a new column headed “any other contract” contains the UK‑wide figures for England, Scotland and Northern Ireland. The instrument also defines when a contract is ‘regulated by the Welsh Ministers’: awards by devolved Welsh authorities (subject to carve‑outs for reserved procurement or a transferred Northern Ireland arrangement) and procurements run under a devolved Welsh procurement arrangement.
The UK‑wide column lowers most GPA‑linked thresholds by around 3.3% from the levels in force since 2024. Central government goods and services now sit at £135,018, sub‑central at £207,720, and the general works threshold falls to £5,193,000. Defence and utilities supplies and services are set at £415,440. Light‑touch figures remain unchanged at £663,540 (general) and £884,720 (utilities). Concessions move to £5,193,000 in line with works. These adjustments maintain conformity with GPA values.
For Wales, the substantive changes do not bite on contracts regulated by the Welsh Ministers. Instead, the UK table signposts a Welsh column, with the Welsh Government to make a separate instrument to revise those figures. Authorities in Wales should therefore check the Welsh regulations once made before relying on the UK‑wide column.
Transitional provisions are precise. Procurements commenced before 1 January 2026 continue under the previous thresholds. Commencement occurs where a section 21 tender notice, a section 44 transparency notice or a section 87 below‑threshold tender notice has been published; where an authority has invited tenders for a regulated below‑threshold contract under section 85(1); or, for other below‑threshold contracts, where the authority has contacted a supplier to start the award.
In practical terms, authorities planning competitions that straddle year‑end should decide whether to publish a relevant notice or invitation before 1 January 2026 to anchor pre‑change values, or instead run the process under the revised thresholds in the new year. The immediate effect of lower values is that borderline procurements that previously fell just under a threshold may now be captured by the full regime.
Works, concessions and defence/utilities supplies and services see the most notable numerical movement. For example, the general works threshold reduces from £5,372,609 to £5,193,000, and the defence/utilities supplies and services threshold from £429,809 to £415,440-each a reduction of roughly 3.3%. That brings a greater volume of procurements into scope for advertising and procedure.
Because section 85(3)’s monetary tests are now aligned to Schedule 1, internal guidance that referenced the previous figures will need to be refreshed. Commercial templates, pre‑market engagement materials and approval checkpoints should be updated to reflect the revised amounts and the new two‑column structure that distinguishes Welsh‑regulated contracts from other contracts.
Jurisdictional points remain important. The instrument is made with Northern Ireland consent, and the Wales definition expressly carves out procurements run under reserved arrangements or a transferred Northern Ireland arrangement. For cross‑border activity, records should show which column applies and why, so that notices and award justifications match the correct legal threshold.
Cabinet Office guidance reiterates that threshold calculations in the Act are based on estimated contract value including VAT, and that the Schedule 1 figures give effect to the UK’s GPA commitments. Given periodic GPA conversions, commercial and legal teams should timetable regular checks to keep standing documents current.