Current procurement climate may be blocking net zero progress
With the UK’s decarbonisation targets coming under scrutiny, a new white paper has found only a quarter of public sector stakeholders feel their 2035 targets are obtainable within the given timeframe. Procurement changes may be key to getting things back on track – with more than half of respondents explaining current rules present significant barriers to their efforts.
A new white paper from national framework provider Pagabo has revealed significant doubts among public sector procurement professionals over whether the UK’s 2035 decarbonisation targets can be achieved. Drawing on responses from 171 professionals across 147 organisations, the report found that 65% of respondents do not believe the government’s 2035 Net Zero target of reducing emissions by 81% from current levels is achievable.
Confidence was particularly low in regions with more limited specialist supply chains, such as the South West. The research also showed that 59% of public sector stakeholders faced significant barriers to meeting their own net zero targets, with a further 13% having no formal strategy or action plan in place.
While challenges vary, the cost of decarbonisation and the availability of funding were cited most often, alongside skills shortages and capacity constraints. One of the most striking statistics from the white paper is that 75% of respondents indicate cost takes priority over sustainability most or all of the time in decarbonisation procurement – a finding which comes at a significant time for UK procurement, as the Cabinet Office has opened a public procurement consultation to build on existing changes introduced by the Procurement Act 2023.
The report also points to regional disparities in awareness of funding opportunities, with 40% of respondents saying funding options were unclear, and 69% reporting challenges when applying for funding. According to experts at Executive Compass, a UK bid consultancies with a dedicated social value division, the findings show direct implications for businesses bidding for public sector decarbonisation contracts.
“Public procurement will be central to meeting net zero goals,” commented Christian Rowe, CEO of Executive Compass. “If cost continues to outweigh sustainability in decision-making, there is a real risk that environmental and social value benefits will be side-lined, making it even harder to meet national targets.”
As the consultation around the Procurement Act 2023 continues, the government aims to review and simplify the rules to maximise benefits for working people. Among its goals are to simplify social value frameworks and improve procurement processes, changes that Rowe believes could help better align cost, quality, and sustainability if applied effectively.
“A change in the Procurement Act framework to simplify and maximise benefits for working people could offer a real opportunity to lean on social value and sustainability more deeply in tenders,” he continued. “But without consistent funding access, early market engagement, and region-specific support, those opportunities could be missed.”
In light of Pagabo’s findings, Executive Compass emphasises several critical areas for action to improve decarbonisation efforts. This includes ensuring early engagement between contracting authorities and suppliers is key to providing clarity around funding and technical requirements. At the same time, addressing regional knowledge and skills gaps will also be vital to ensure all areas of the UK have equal opportunity to participate, particularly where specialist supply chains are limited. Finally, giving greater weight to social value and sustainability in procurement scoring is essential to help balance immediate cost concerns with the need for long-term environmental and community investment and benefit.
