Scotland to double public contract thresholds in red-tape cut for small firms

Scotland plans to double the value limits that decide when public contracts must go through formal procurement rules, in a move aimed at cutting red tape for small businesses. The Scottish Government announced the plans on 31 October 2026.

Under the plans, the threshold for goods and services contracts would rise from £50,000 to £100,000, and the threshold for works contracts would rise from £2 million to £4 million. Contracts above those values must follow the legal rules and duties set out in the Procurement Reform (Scotland) Act 2014.

The thresholds have not changed since the Act was passed in 2014. The Scottish Government said inflation since then has dragged more and more contracts into the formal rules, even though they are still small in real terms. The changes follow a consultation that gathered views from businesses, public bodies, third sector organisations and procurement professionals.

Public Service Reform Secretary Ivan McKee said the changes would create more opportunities for local businesses, small and medium-sized firms and third sector organisations, while letting public bodies buy goods and services more quickly and in a way that fits the size of the contract. Gillian Cameron, from the Supplier Development Programme, welcomed the move, saying it would cut paperwork and make it easier for smaller firms to take part in tenders.

Why it matters

Public bodies in Scotland buy everything from stationery and catering to road repairs and school building work. When a contract sits above the threshold, it must be advertised and run through a formal process with set standards. Raising the limits means more lower-value contracts can be awarded through quicker, less formal procedures instead. For a small local firm, that can mean less time and cost spent on bidding — and a better chance of winning work close to home.

What happens next

The changes are not yet law. They will be made through an affirmative Scottish Statutory Instrument, which needs the approval of the Scottish Parliament. If Parliament approves them, the new thresholds will come into effect on 1 April 2027. The Scottish Government stressed that these are separate from a different set of thresholds, updated every two years under World Trade Organisation rules, which cover higher-value contracts.

This article is for general information and education only. It is not legal or financial advice.

Sources

• https://www.gov.scot/news/reducing-barriers-for-business/ (Scottish Government, 31 October 2026)
• https://caithness-business.co.uk/article/33851 (Caithness Business, 31 October 2026)