Procurement, capacity and change: lessons from 2025 for the year ahead

As the sector reflects on 2025, one message has come through clearly within local government, and for consultants and contractors: public sector delivery is shifting in ways that will shape how projects progress in the year ahead.

In 2025, public sector procurement authority SCAPE published ‘A Year of Change: Public Good, Public Building – What the Nation Needs Now’, an insight report drawing on extensive engagement with local authorities, SCAPE’s delivery partners and regional leaders. It highlighted the pressures and opportunities influencing the sector, offering a grounded view of the conditions that will carry into 2026.

As we settle into the direction of travel set by the Autumn Budget 2025, the economic picture remains steady rather than transformative. Rather than signalling major change, the Budget provided clarity on the operating environment for 2026: one in which efficient procurement, stronger delivery structures and better use of existing capacity will play an increasingly important role.

Procurement: delivering more with less

It is clear within our report that procurement has become one of the biggest factors of project pace. Fragmented routes to market, lengthy tendering timelines and limited early contractor involvement were repeatedly cited by local authorities as persistent causes of delay – often outweighing planning or design issues.

As councils take on increasingly complex capital programmes, many do so with reduced internal teams and stretched commercial capacity. Our report’s findings suggest that the sector move towards simpler, more predictable procurement pathways to reduce duplication, bring contractor expertise into projects earlier and provide consistent governance regardless of local capacity.

Local capacity and skills

Skills and capacity challenges remained a defining feature of 2025. Our report highlighted significant skills shortages across both public and private sectors, which has implications for site labour and the commercial, procurement and planning teams which councils rely on to deliver programmes.

Extended threshold freezes reinforce the pressure to retain and attract staff in a competitive market. Combined with an ageing workforce, the sector faces a widening gap between delivery expectations and available expertise. The government’s continued emphasis on developing the skills pipeline – including support for apprenticeship pathways – is welcome, but it will take time to flow through to delivery-ready capacity.

This year, the emphasis is on designing systems requiring less internal resource. Streamlined procurement models, clearer governance, early contractor involvement and standardised processes can all help councils maintain pace even when teams are thinly stretched.

Devolution: an enabler of smarter, faster delivery

Another notable insight from the report’s findings is that devolved regions demonstrate more agile delivery capability. They repeatedly reported a stronger ability to align procurement with local priorities, coordinate delivery pipelines and accelerate decision making.

As further local government reorganisation progresses over the next two years, this dynamic will become increasingly relevant. While transition periods may create temporary slowdowns, mature combined authorities have the potential to deliver more coherent, strategic commissioning and procurement.

2026: procurement as strategy

Our insight report sets out what public sector bodies will need to deliver in the new year: clearer, more efficient procurement routes; stronger internal capacity; and decision making structures grounded in local priorities. With limited financial change and increasing delivery expectations, the sector’s greatest opportunities lie in strengthening the systems moving projects from intent to execution.

In 2026, pressures that shaped 2025 – from capacity constraints and skill shortages to ongoing planning reform and shifting local structures – are unlikely to recede. Our report makes clear that that the potential for change lies in how the sector organises itself to respond. By approaching procurement as a strategic mechanism for creating clarity, consistency and earlier collaboration, councils can ease some of the strain points in the system and build delivery models that are more predictable, better governed and more resilient to the pressures ahead.