Explanatory note

Section 17(5) of the Local Government Act 1988 (c. 9) (“the 1988 Act”) contains a list of matters (non-commercial matters) by reference to which specified authorities may not exercise the functions listed in section 17(4) of that Act, which include functions in relation to proposed public supply or works contracts with the authority.

This Order applies to all best value authorities within the meaning of section 1 of the Local Government Act 1999 (c. 27) and parish councils in England to which section 17 of the 1988 Act applies. The Order provides that, in relation to below-threshold contracts only (as defined by section 5(5) of the Procurement Act 2023 (c. 53)), the matter contained at section 17(5)(e) of the 1988 Act ceases to be non-commercial matter but only to the extent that either paragraph (2) or (3) of article 3 of the Order applies to the procurement for that contract.

Article 3(2) applies where a relevant authority prevents contractors not based within the United Kingdom from participating in the procurement of a relevant contract, whereas article 3(3) applies where a relevant authority prevents contractors not based within the local area from participating in the procurement of a relevant contract. If an authority is advertising the contract, then it must specify in the advertisement of the tender whether the contract is being reserved for contractors in the United Kingdom or the local area and specify what the local area is.

Article 4 of the Order makes amendments to regulation 24 of the Procurement Regulations 2024 (S.I. 2024/692) in order to reflect the requirement on authorities contained in article 3(8) to provide certain information in a below-threshold tender notice when relying on article 3 in respect of a notifiable below-threshold contract.

A full regulatory impact assessment has not been prepared as this instrument will have no impact on the costs of business and the voluntary sector.