Public Procurement: Protecting National Security and Strengthening Economic Resilience

On 19 June the Government announced the publication of new policy guidance to protect the UK’s national security through public procurement.

In March, I announced plans to ensure Government Departments make use of the national security exemption in the Procurement Act 2023, where lawful and appropriate, to ensure procurement protects our national interest. Today, we move from policy intent to delivery.

This new guidance targets four critical sectors where global shocks can directly threaten national security: steel, shipbuilding, artificial intelligence, and energy infrastructure.

At a time when our national security and economic security are inextricably linked, true resilience requires supporting critical sectors and securing supply chains so they can be relied upon during times of crisis. This means understanding that foundational assets like steel and shipbuilding are critical capabilities essential to the UK’s national security, and treating them as such. It also means recognising that emerging essential assets like artificial intelligence and energy infrastructure must not be left vulnerable to supply chain disruption.

For far too long, public procurement has been too narrowly focused on short-term requirements and with too little regard to long-term resilience and national and economic security. This has, over time, eroded our national capability, exposing the UK to increasing national security risks. To fix this, HM Treasury is updating guidance to accounting officers to frame value for money as a balanced judgement of strategic alignment, long-term resilience, and risk.

To co-ordinate commercial pipelines and intercept vulnerabilities in the four critical sectors identified, the Government have also appointed departmental sector leads across the Department for Business and Trade, the Ministry of Defence, the Department for Science, Innovation and Technology, and the Department for Energy Security and Net Zero.

This guidance provides central Government practitioners with the clarity and confidence to lawfully deploy the national security exemption under the Procurement Act 2023 in these four sectors in order to safeguard essential capabilities, boost resilience and protect national security. Relevant private utilities in energy infrastructure and wider public sector bodies are also strongly encouraged to apply this guidance.

These measures are targeted at procurements in these sectors which are indispensable to our national security. Our priority is to ensure an existing legal exemption is used appropriately and consistently with our international trade agreements.

We recognise that our global trading partners and close allies will often have suppliers well-placed to help us meet our security needs. Our approach is built on collaboration; trusted international partners and global suppliers are at the heart of our procurement strategy, bringing the innovation and resilience we need to stay secure. However, national security requires constant vigilance and an active Government.