Clare Tetlow, Procurement Lead at Procure Plus, discusses what the Procurement Act means for prompt payment — and why it matters.
Successive governments have recognised that prompt payment is essential for maintaining healthy cash flow, supporting resilient supply chains and strengthening the wider economy. This is particularly important for small and medium-sized enterprises and new start-ups, which often lack the financial buffer of larger organisations.
While all companies are entitled to timely payment, unnecessary delays can quickly undermine smaller firms and, in some cases, become business critical.
For years, the public sector has been required to pay valid invoices within 30 days and to ensure this standard is applied across the full supply chain involved in delivering public contracts.
This principle, originally set out in the Public Contracts Regulations 2015, has been practically upheld by the Public Procurement Review Service, which has consistently intervened to address delays and help suppliers recover overdue payments.
The new Procurement Act maintains the expectation that contracting authorities pay valid invoices within 30 days. However, it goes further by using transparency and reporting requirements to help incentivise prompt payment, strengthen economic health and build supply chain resilience.
At the centre of these changes is the introduction of the Payment Compliance Notice, which brings several key requirements:
- Contracting authorities must now report every six months rather than annually.
- Reporting must begin from the day an invoice is received.
- Authorities must set out the average number of days taken to make payments, as well as the percentage of payments made within 1–30 days, 31–60 days, and 61 days or more.
- Each Payment Compliance Notice must be authorised by a Finance Director or equivalent.
The first reporting period is already underway. It began on 31st October 2025 and will run until 31st March 2026. Within 30 days of that date, the first Payment Compliance Notices will be published on the Central Digital Platform.
Previously, a smaller set of payment information was published annually and in a more dispersed way. The move to the Central Digital Platform consolidates this information, creating a single, accessible source of data that is highly relevant to understanding the performance of public sector contracts.
The broader reporting requirements also reinforce the need for procurement teams to work closely with Finance, Contract Managers and wider colleagues. Ensuring invoices can be easily linked to specific contracts will be essential, as will identifying and managing any delays in line with the Act.
As we move into the new year, a growing body of information will begin to show how the housing sector and other public bodies are responding to the Act. While it is still early in the procurement lifecycle for many new contracts, some data will be available at the end of March, with the dataset expanding over time. Contracting authorities can also choose to include contracts procured under the Public Contracts Regulations 2015 in their reporting to provide a more complete picture.
For Procure Plus, these changes reinforce what has long been central to the way we work. Prompt, transparent payment practices are not just a compliance requirement; they are a foundation for a healthy, resilient supply chain. Our frameworks are built around long-term relationships with contractors of all sizes, including many SMEs, and we see first-hand how reliable cash flow supports quality, stability and confidence throughout delivery.
As the new reporting regime becomes established, we will continue to support clients and suppliers in navigating the Act’s requirements, sharing practical learning from our own procurement activity and helping organisations strengthen their internal processes. The visibility created by the Central Digital Platform will grow over time, and with it, opportunities to benchmark, improve and plan ahead.
While the sector is still adjusting to the Act, the direction of travel is clear: greater transparency, stronger collaboration and a renewed focus on supporting the organisations that deliver essential public services. Procure Plus will remain focused on helping our partners meet these expectations in a way that drives good outcomes for residents, suppliers and communities.
