UK public procurement reform
Campaign update (last revised: 18/05/2026)

New UK procurement rules still do little to factor in ‘corporate tax conduct’

October 2023 saw the finalisation of new UK public procurement legislation that was billed as substantially reforming, post-Brexit, the way the UK government spends money with external suppliers on goods and services.

Given the combined value of such contracts are today worth an estimated £340bn per annum (and account for about a third of public sector spending), the Fair Tax Foundation has been calling for this substantial taxpayer spend to firmly embed responsible corporate tax conduct. In 2019, we presented research which revealed that c.17.5% of UK public contracts were being won by companies linked to tax havens (over the preceding five year period). In parallel, it has been calculated that the UK loses an estimated £14bn in corporation tax revenues as a result of profit shifting alone.

The detailed rules implementing the new legislation were presented in February 2025 in a new National Procurement Policy Statement. This sets out the strategic priorities for public procurement and how national and local contracting authorities (excluding devolved Welsh or transferred Northern Irish procurement arrangements) should put these into practice. In support of the delivery of social and economic value, the Policy Statement stipulates that contracting local and national government should ensure that corporate suppliers are tax compliant.

“Contracting authorities should: Ensure their suppliers are actively working to: tackle bribery, corruption, fraud, modern slavery and human rights violations, environmental impact (including reducing greenhouse gas emissions and minimising waste in their operations); comply with their tax, employment law and other legal obligations, and stamp out late payment of invoices in their supply chains.”

This is welcome, albeit a baby-step forward. The UK Government should go much further and make it clear that public authorities can factor corporate tax conduct into their procurement decision-making, much as they are explicitly encouraged to maximise procurement spend with social enterprises.

Against this worrying backdrop, UK polling finds that two thirds of people believe public procurement should consider the tax conduct of a business before such contracts are agreed.

Encouragingly, there is a growing movement of towns and cities across the UK that want to use their buying power to encourage responsible tax conduct. Our UK Fair Tax Council network has expanded rapidly, and includes municipal powerhouses such as Westminster, Newcastle and Edinburgh.

A small win on supplier ownership transparency

The UK’s new public procurement rules, due to apply from October 2024, do provide for a welcome small step forward on beneficial ownership transparency – the detail of which will be set out in secondary legislation (expected Spring 2024). Government is expected to mandate disclosure by contracting authorities of the beneficial ownership of successful bidders upon award of contract, as previously signalled. Ownership transparency in public contracting matters not only for reducing the risk of abusive tax conduct within supply chains but for shining a light on corrupt actors too. But the detail will matter and to this end the same transparency loopholes that have plagued the UK’s company registration services must be avoided. Structures that disguise the true beneficial ownership of companies, such as shell companies and nominee directors, must be disallowed with the result that we have clarity on who really controls the companies supplying the UK public sector wherever they are based.

We are also pleased to see the addition of new ‘failure to prevent’ offences, including tax evasion, in the list of criteria which would qualify a bidder for exclusion from a procurement exercise. However, the high thresholds and ‘self-cleaning’ provisions mean that these tax-related exclusion criteria are unlikely, if ever, to be triggered.

For supplier tax conduct to be meaningfully considered, further reform is badly needed

We also need the door to be left firmly open for further substantive progress down the line to ensure that responsible tax, and other issues of corporate conduct, are overtly allowable considerations of social value for progressive towns and cities in the future. To this end, we are actively engaging with politicians of all political persuasions – not least as many of the Fair Tax Council resolutions that have been passed up and down the country have enjoyed all-party support. We commend the recent policy proposals of the Labour Party, which would reward suppliers that demonstrate a robust commitment to responsible tax conduct and financial transparency, and which align with our ‘Big Fair Tax Ask’ (see below).

‘The Big Fair Tax Ask’ for UK public procurement

Explicitly allow contracting authorities to reward suppliers that demonstrate a robust commitment to responsible tax conduct and financial transparency. I.e., those that:

• shun artificial tax avoidance, profit shifting and tax havens;
• publish the fullest set of financial accounts (including a breakdown of income, profit and taxes paid across the globe)
• and, disclose their ultimate beneficial owners (with shell companies and nominees disallowed).

This would mean that the general conduct of a corporation could be assessed and factored in, and would break the current need for all ethical considerations to be rooted exclusively in the subject matter of the contract.

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