Dynamic Markets, E-Procurement and the Procurement Act 2023: How Collaboration Can Unlock New Value for Housing Providers

Housing providers are operating in an environment of sustained financial pressure. Construction inflation, regulatory demands (including Awaab’s Law), restricted cash flow and constrained borrowing capacity mean organisations must extract clear, demonstrable value for money from every procurement decision while maintaining service quality.

Value for money is no longer judged solely on headline price. Boards and regulators increasingly expect evidence that procurement decisions balance whole‑life cost, quality, risk, and outcomes, and that savings are realised in practice, not just forecast on paper.

At the same time, the Procurement Act 2023 has reshaped public procurement across the UK (noting devolved bodies), strengthening transparency and remedies for non‑compliance while introducing new flexibility designed to improve efficiency, competition, and outcomes.

For housing providers, this is not simply a compliance challenge. When combined with modern e‑procurement systems and the Act’s new dynamic markets, it represents a significant opportunity to improve value for money earlier, reduce procurement cost, and deliver outcomes faster, particularly for small and medium‑sized housing associations.

Crucially, procurement now has a direct and material impact on value for money, cash flow, operating margins and financial resilience. Delayed procurements, interim extensions and challenge risk, do not just increase cost; they undermine value by deferring savings, increasing risk premiums and reducing the organisation’s ability to evidence strong outcomes.

From Individual Buying to Collective Advantage

Many smaller housing associations face a common dilemma. Individually, their spend profiles are often:

• Too fragmented to secure strong pricing
• Too small to attract the most competitive suppliers
• Disproportionately costly to procure compliantly

This fragmentation weakens value for money at both system and contract level. Repeated full procurements, short‑term extensions and reactive purchasing increase unit costs, delay benefits realisation and make it harder to demonstrate that outcomes achieved justify the cost incurred.

The Procurement Act 2023 does not require organisations to procure alone. Long‑standing procurement principles recognise that aggregation and collaboration can improve value for money, provided transparency, fairness and accountability are maintained.

Dynamic markets and e‑procurement now provide the infrastructure to make consortium‑based procurement both practical and proportionate, aligning cost, outcomes and VfM more closely over the life of the contract, rather than at award stage alone.

What Dynamic Markets Change

From a finance perspective, this separation of supplier qualification from contract award reduces both transaction costs and working‑capital risk. Faster, repeatable competitions shorten procurement lead times, enabling earlier contract start dates, quicker realisation of savings and reduced reliance on short‑term extensions that often carry cost premiums.

Dynamic markets are a new form of commercial arrangement introduced by the Procurement Act 2023, replacing the former Dynamic Purchasing System and offering significantly greater flexibility.

Unlike traditional frameworks, dynamic markets:

• Remain open to new suppliers throughout their lifespan
• Can be used for goods, services and works
• Separate supplier qualification from contract award
• Support repeated competitions using the competitive flexible procedure

From a finance perspective, this separation reduces transaction costs, lead‑time risk and working‑capital pressure. Faster competitions shorten the gap between business case and benefit, bringing savings forward into the financial year rather than deferring them.

The Consortium Model: One Market, Many Landlords

For SME housing associations, a consortium approach allows multiple organisations to:

• Jointly establish a single dynamic market
• Pool demand to create meaningful market scale
• Share procurement overheads and expertise
• Retain autonomy at call‑off stage

In practice, this means one compliant market‑establishment exercise, followed by multiple organisation‑specific mini‑competitions. Each member runs light‑touch competitions as required, drawing from a shared, pre‑qualified supplier base.

This model preserves local decision‑making while unlocking aggregation benefits and reducing the frequency of high‑risk, high‑cost procurement events.

Finance Impact Summary (Board / FD View)

Cash Flow & Liquidity

Improved Value for Money

Aggregating demand increases market attractiveness, improving pricing tension and supplier engagement. Even where individual call‑offs remain modest, suppliers are bidding into a visible pipeline of opportunity, which improves commercial outcomes. [thedocs.wo…ldbank.org]

Reduced Procurement Cost and Complexity

Running a single dynamic market collectively avoids repeated full procurements by each organisation. Legal advice, market engagement, and governance effort are shared rather than duplicated.

Stronger Supplier Markets

Dynamic markets remain open, enabling new entrants, including SMEs, local contractors and social enterprises to join over time. This aligns with the Act’s objective of supporting diverse and innovative supply chains. [thorntonandlowe.com]

• Reduced reliance on emergency extensions and premium interim contracts
• Faster mobilisation enables earlier realisation of planned savings
• Improved spend capture and commitment control reduces leakage

Operating Margin / Surplus Protection

• Lower unit costs through sustained competition
• Reduced process costs (legal, consultancy, internal time)
• Improved contract performance management limits overspend

Risk Reduction

• Fewer high‑risk procurement events
• Stronger audit trails reduce likelihood of challenge‑driven disruption

Frontline Reinvestment

• Savings and avoided costs can be redirected to tenant‑facing services
• Procurement capacity freed for performance and cost control

The Critical Role of E‑Procurement

E‑procurement portals play a critical enabling role under the Procurement Act 2023. They provide a single, structured environment for planning, competition, award and contract management, with full lifecycle visibility.

For organisations operating dynamic markets or consortia, e‑procurement portals support:

• Centralised supplier onboarding and compliance checks
• Segmentation of markets into lots or service areas
• Automated, landlord‑specific mini‑competitions
• Clear audit trails distinguishing consortium governance from individual awards
• Spend Capture
• Contract Repository (including key dates)
• Supplier Management Tools
• KPI capture and reporting (as required under the Act above certain thresholds)

From a finance perspective, e‑procurement converts procurement activity into forward‑looking management information, enabling earlier intervention where spend drifts and improving forecast accuracy.

How This Improves Cash Flow

Earlier visibility prevents contract cliffs; faster awards bring savings forward; spend capture reduces leakage; audit‑ready records reduce disruption risk.
Net effect: smoother cash outflows, improved forecast variance and protected liquidity.

Managing Risk Under the Procurement Act 2023

The Act’s remedies regime allows suppliers to seek damages, suspension or contract set‑aside where duties are breached. For smaller housing associations, even a single challenge can materially impact cash flow and delivery.

Consortium dynamic markets reduce this exposure by concentrating complexity into one well‑governed process, standardising documentation and embedding evidence capture through systems.

A Strategic Opportunity for the Sector

Dynamic markets, supported by e‑procurement and used collaboratively, offer SME housing associations a route to:

• Protect operating margins
• Stabilise cash flow
• Reduce procurement and legal costs
• Redirect savings into frontline services

Procurement is no longer a back‑office function. It is a financial control lever.

A Practical Example

Consider a group of five SME housing associations procuring repairs and compliance services.

Individually, each might run:

• A full procurement every four years
• Multiple interim extensions
• Separate evaluation and governance processes

As a consortium, they could:

• Establish a shared dynamic market once
• Admit new suppliers continuously
• Run light‑touch mini‑competitions for specific needs
• Achieve better pricing and faster mobilisation

The result is lower cost, improved assurance and stronger market engagement, sacrificing organisational independence and maximising best practice and value across the consortia, whilst developing an engaged, forward thinking, business network of SME, Non-Profit and Charitable bodies to compete with the tier one players.

A Strategic Opportunity for the Sector

The Procurement Act 2023 was designed to simplify procurement while increasing accountability. For housing providers, its real potential lies in how flexibly it can be applied.

Dynamic markets, supported by e‑procurement and used collaboratively, offer SME housing associations a route to:

• Achieve economies of scale without loss of control
• Reduce procurement and legal costs
• Improve cash flow predictability
• Demonstrate value for money more convincingly

In a sector where collaboration is increasingly essential, procurement is emerging as one of the most practical areas in which to make it real.

An Anonymised Case Study: Using a Dynamic Model to Deliver Scale and Control

To understand how dynamic markets can work in practice, it is helpful to look at how housing providers have successfully used Dynamic mechanisms.

The Context

A group of six small and medium‑sized housing associations, each managing between 3,000 and 8,000 homes, faced similar challenges:

• Rising costs across repairs, compliance and specialist services
• New regulatory requirements, driving additional spend and certification
• Limited internal procurement capacity
• Repeated use of short‑term contract extensions due to the time and cost of full procurements
• Difficulty attracting larger, more capable suppliers for smaller individual contracts

Individually, none of the organisations had sufficient scale to reshape the market. Collectively, however, their combined spend was significant.

The Solution: A Shared Dynamic Model

The associations agreed to collaborate and establish a shared Dynamic model covering:

• Responsive repairs
• Gas servicing and compliance
• Electrical testing and remedial works
• Asbestos surveys and fire risk assessments

One organisation acted as the lead authority, with governance arrangements agreed up‑front to preserve accountability and audit clarity.

The model was established through a single compliant procurement process, assessing supplier capability, financial standing, accreditations and exclusion grounds once at the outset.

Crucially, the model:

• Remained open to new suppliers, allowing local SMEs to join over time
• Was structured into service‑specific lots, enabling suppliers to bid only where they were competent
• This allowed partner organisations to “down select” relevant suppliers only
• Was supported by a shared e‑procurement platform, ensuring consistent processes across all members

How Call‑Offs Worked in Practice

Each housing association retained control over its own spend.

When services were required, the relevant organisation ran a mini‑competition through the model:

• Short, focused reopening of competition documentation
• Limited evaluation criteria tailored to the service
• Faster award and mobilisation

This approach avoided repeated full procurements while maintaining competition, compliance and transparency.

Outcomes and Benefits

Importantly, the reduction in procurement effort did not simply create efficiency savings; it released internal capacity. Procurement and contract management teams were able to focus on performance, cost control and supplier improvement—areas with a direct and sustained impact on operating expenditure and service quality.

While the consortium avoided publishing headline “savings” claims, several tangible benefits were observed:

• Reduced procurement timescales, particularly for specialist and compliance services
• Improved supplier engagement, with both national providers and local SMEs participating
• Greater pricing consistency, enabling more accurate budget forecasting
• Lower internal procurement effort, freeing capacity for contract management and performance improvement
• Reduced risk of challenge through standardised compliant processes and documentation

From a governance perspective, audit and assurance reviews highlighted the strength of the model audit trail, particularly compared to historic ad‑hoc procurement approaches.

All relevant Notices were published to ensure compliance using standard Notice templates, saving time, effort and maximising value for money.

Lessons for Dynamic Markets Under the Procurement Act 2023

Participants recognised that the Dynamic model had already delivered meaningful benefits.

Dynamic markets, as introduced by the Procurement Act 2023, remove several of the previous Public Contract Regulations constraints by:

• Allowing broader use across works, services and goods
• Providing greater flexibility through the competitive flexible procedure
• Aligning more closely with modern e‑procurement platforms

For the consortium, the transition from DPS to a Dynamic Market is seen not as a radical change, but as a natural evolution of a model that has already proven its value.

In financial terms, dynamic markets shift procurement from a cost centre to a value‑preserving function. Savings achieved are not one‑off headline reductions but recurring benefits that strengthen margins, stabilise cash flow and create capacity to reinvest in frontline services.

How we can help

Altair supports Local Authorities, Charities, Housing providers and other Clients at every stage of the procurement journey, combining deep sector expertise with practical delivery.

Our procurement and commercial services focus on helping organisations strengthen compliance, improve value for money and embed a commercial mindset that stands up to regulatory and audit scrutiny.

We have supported housing associations to design and run compliant procurement strategies, develop and operate DPS‑style solutions, and transition confidently towards Dynamic Market models under the Procurement Act 2023.

This includes work alongside sector partners involved in ongoing Dynamic Market development activity in Scotland, where collaborative and flexible procurement routes are already delivering efficiencies at scale.

To help organisations get started, Altair offers a free 30‑minute procurement and commercial clinic, providing an opportunity to discuss current procurement processes, compliance challenges, explore options such as Dynamic Markets or consortium approaches, and identify practical next steps with no obligation.

Get in touch with Kevin today – Kevin.Harding@altairltd.co.uk