- This article was updated on 22 January 2026 with further information on Welsh thresholds.
From 1 January 2026, the Procurement Act 2023 (Thresholds Amount) (Amendment) Regulations 2025 (SI 2025/1200) and the Procurement Act 2023 (Threshold Amounts) (Amendments) (Wales) Regulations 2025 will come into force. For many contracting authorities, this will mean more contracts tipping into the ‘above threshold’ category and therefore engaging the full obligations under the Procurement Act 2023.
This is a timely moment for procurement leads, legal teams and contract managers to assess their forward pipelines and ensure internal processes are aligned.
What do we mean by ‘above threshold’?
An above threshold contract is one with an estimated value (including VAT), that is equal to or above the relevant financial threshold.
The relevant financial thresholds (as set out below) are contained in Schedule 1 of the Procurement Act 2023, and may be revised by regulations, as is the case here.
The thresholds
| Contracting authority – Contract type | Threshold (2025) (inclusive of VAT) | Threshold from 1 January 2026 (inclusive of VAT) |
| Central Government – Supplies and Services | £139,688 | £135,018 |
| NHS Trusts / NHS Foundation Trusts – Supplies and Services | £139,688 | £135,018 |
| Utilities – Supply and Services Contracts | £429,809 | £415,440 |
| Sub-Central / Other Contracting Authorities – Supplies and Services | £214,904 | £207,720 |
| All Authorities – Works Contracts | £5,372,609 | £5,193,000 |
| All Authorities – Concession Contracts | £5,372,609 | £5,193,000 |
| Light Touch Regime | £663,540 | £663,540 (unchanged) |
It’s important to note that the regulations do not affect the Provider Selection Regimes.
Key actions for contracting authorities
1. Review your upcoming procurement pipeline
Identify procurements expected to commence after 1 January 2026. Where estimated values now exceed the new thresholds, consider adjustments to timelines, procurement strategies, and documentation to ensure compliance.
2. Ensure organisation-wide awareness
Legal teams, procurement officers, approvers and contract managers should be made aware of the updated thresholds to avoid inadvertent non-compliance.
3. Update templates and governance threshold
Review and, where necessary, revise procurement templates, approval documents, constitutions and other governance materials to ensure they align with the new thresholds.
4. Review below-threshold procedures
The amendment also adjusts:
- regulated below threshold contract values; and
- reduces the threshold for ‘convertible contracts’ (those which were procured as below threshold, but a modification transforms them into an above threshold contract).
All relevant procedures should be checked and updated.
5. Plan for future threshold reviews
Government guidance confirms that a Procurement Policy Note (PPN) / Welsh Procurement Policy note (WPPN) will be issued every two years to revise thresholds. Authorities should diarise a review for November 2027.
Conclusion
The new thresholds represent a material shift for many contracting authorities. Reviewing pipelines, updating internal governance and ensuring staff understand the new requirements will help avoid non-compliance and ensure smooth operation under the Procurement Act 2023.
How can we help?
For further information about issues raised in this article, please contact a member of our Procurement team.
Nicola Cullen
Associate
