UK Budget 2026: care needed on ‘Buy British’ plans, says expert

Dr. Totis Kotsonis of Pinsent Masons was commenting after more details of the government’s plans to reform public procurement rules were detailed in UK chancellor John Healey’s Budget announcement (166-page / 4.5MB PDF) on Wednesday.

Back in the summer, the government set out plans to change how bids for major UK government contracts are assessed from 1 January 2027, with a view to better rewarding suppliers that commit to invest in local jobs and skills. However, the government has now said it intends to pursue wider reforms, which would impact all public contracts in England.

In March 2027, it said, a new national procurement policy statement will be laid in parliament to “prioritise delivery of high-quality jobs, fair pay and skills opportunities, including pathways for young people”.

The government also intends to re-define what constitutes a ‘UK supplier’ for public procurement purposes, by January 2027.

“For too long, broad definitions have allowed companies with little more than a UK post box to be classed as a UK firm,” the government said. “This will help ensure economic resilience in key supply chains, safeguarding UK sovereign capabilities. By maximising the UK’s domestic capabilities, alongside contracting with suppliers from our international allies, the government will ensure that procurement supports communities and that UK public services receive the best solutions on the market.”

For public contracts for large government infrastructure and construction projects, a further changed is planned. Prospective suppliers will be expected to commit to a target of at least 3% for apprenticeships on such projects.

"The government’s pledge to use public procurement to support British businesses will require some careful thinking,” said Kotsonis. “The UK’s room for manoeuvre is constrained by its commitments under the WTO Government Procurement Agreement and bilateral trade agreements, including the UK-EU Trade and Cooperation Agreement, not to discriminate against suppliers and goods from trading partners in covered procurements.”

“Whilst those commitments are subject to exceptions, these are limited in scope and cannot justify a general ‘Buy British’ preference in covered procurements. Attempting to interpret those exceptions more flexibly also creates the risk of reciprocal restrictions on British suppliers’ access to overseas procurement markets. Indeed, the government’s ambition to ‘Buy British’ sits uneasily with its efforts to ensure that UK businesses are not disadvantaged by the EU’s emerging ‘Made in Europe’ policy. The challenge is to support British industry without undermining the very international market access on which British exporters depend. That will not be an easy task,” he said.