On 1 November 2021, the UK Government published its updated procurement thresholds.

These will apply to all contracts advertised on and from 1 January 2022. But, note that healthcare services for the purposes of the NHS are likely to be removed from the ambit of the Public Contracts Regulations 2015 to the extent that the new Provider Selection Regime is introduced under the Health and Care Bill which is expected to come into force on 1 April 2022.

A key difference between the new and old financial thresholds is that the new rates are inclusive of VAT, instead of net of VAT. Therefore, contracting authorities will need to consider whether or not VAT will apply to relevant contracts and the relevant rate which might be applicable. If VAT does apply, this must be included in the assessment of the contract value in order to determine whether or not the contract will exceed the relevant thresholds.

The Public Procurement (Agreement on Government Procurement) (Thresholds) (Amendment) Regulations 2021 (SI 2021/1221), which introduce the new thresholds, are silent on the threshold which will apply to the Light Touch Regime, therefore it is assumed that the thresholds for contracts covered by the Light Touch Regime under the Public Contracts Regulations 2015 will not be amended but note that the existing figure will be inclusive of VAT.

It is also important to remember that, as of 16 August 2021, NHS England and NHS Foundation Trusts now come within the definition of Central Government Authorities thereby falling within the lower services and supplies thresholds.

*Central government authorities include the Department of Health, the NHS Business Services Authority, NHS Trusts, NHS England and NHS Foundation Trusts.

**Sub-central contracting authorities comprising all other contracting authorities which are not central government authorities (which would include, for example, HEE and CCGs).