The UK construction industry is entering a pivotal phase in 2025, shaped by evolving global events, economic shifts and the increasing regulatory demands that are now reshaping how procurement teams operate. While challenges such as political uncertainty, supply chain disruptions and rising costs continue to test resilience, there are also significant opportunities to drive innovation, sustainability and efficiency in procurement.
Building a robust and adaptable supply chain will be essential for public sector procurement teams looking to navigate these complexities. From embracing digital transformation to leveraging modern construction methods, the industry has the potential to turn obstacles into catalysts for progress.
To explore these developments, we spoke with Stephen Crichton from Ridge, who shared his expert insights on how procurement teams can strengthen their supply chains, mitigate risks and position themselves for long-term success. Let’s dive into the details.
Global Shifts and Supply Chain Resilience
The start of 2025 has been turbulent for the UK supply chain, heavily influenced by international political events. Crichton notes,
“2025 has been a bumpy start for the UK, primarily led by events over in the USA.”
With Donald Trump’s return to the presidency, uncertainty looms over potential trade policy changes, tariffs and regulatory shifts.
That being said, irrespective of America, the UK construction industry continues to grapple with it’s own economic uncertainty, still feeling the aftershocks of the mini-budget. Crichton highlights how,
“Local Authorities and Developers are held back by the cost of borrowing, weak consumer confidence, and patchy demand from buyers.”
Local governments, already constrained by years of budget cuts, now face additional financial pressure, with an unprecedented number of councils seeking emergency bailouts. This financial strain limits their ability to drive market stimulation, leaving procurement teams navigating an increasingly fragile supply chain.
The effects of supply chain disruption are evident, as businesses struggle with ongoing instability and project delays.
“Sadly, businesses still appear to be feeling the impact of supply chain disruption, which has dampened market confidence, causing project delays,” says Crichton. “The recent demise of JS Wrights, a regional engineering company established in 1890, suggests even more uncertainty in the first quarter of 2025.”
As these challenges continue, procurement teams must implement strategic measures to mitigate risks and strengthen resilience in an unpredictable economic landscape. Key approaches include early engagement with suppliers to anticipate potential disruptions and diversifying supplier networks to enhance flexibility and reduce reliance on a single source.
Embracing Innovation to Strengthen Supply Chains
The UK construction industry has long been a global leader in innovation. However, as Crichton points out,
“The only problem appears to be convincing those that engage in construction to have a coordinated plan on how we maintain innovation through the development and delivery stages of a building project.”
The challenge isn’t a lack of technology but rather a need for widespread adoption and strategic implementation across the sector.
One key area of focus is digital transformation, particularly through AI and Building Information Modelling (BIM).
“As an industry, we all need to embrace AI and understand the benefits it can have in construction, says Crichton. “The government mandates for BIM Level 3 on all projects, demonstrating a commitment to streamlining processes and reducing waste. This in turn feeds into the requirement for all public sector frameworks insisting its suppliers have the requisite skills to align with a BIM strategy that fully supports the Government’s digital agenda.”
The Future of Modern Methods of Construction (MMC)
Modern Methods of Construction (MMC) have long been positioned as a solution to material shortages, workforce constraints, and sustainability goals. However, Crichton points out,
“MMC has always been the subject of debate, often plagued by the same discussions around how it can be effective when you have stunted growth, insufficient demand for your product, and unpredictable delays around planning and workforce challenges.”
While the efficiency and sustainability benefits of MMC are clear, concerns around cost and scalability continue to hinder widespread adoption.
A recent case study example by Ridge for a regional elderly care home provider highlighted these challenges, revealing,
“a 15% uplift in the costs of offsite prefabrication against that of traditional build.”
For MMC to become a viable alternative, there needs to be a more structured approach to demand generation.
“The only way of solving this and developing better MMC is for suppliers to be guaranteed a sufficiently large order book, which is driven by Government policy and investment.”
The Impact of National Insurance Increases on the Supply Chain
Rising costs continue to put pressure on the construction sector, and the increase in National Insurance is another financial strain at a time when the industry is struggling to gain momentum. Crichton highlights the broader implications, stating,
“Anything that puts the cost of construction up at a time when the industry is already struggling to gain momentum is going to add further cause for concern to supply chains.”
While the tax increase poses immediate challenges, there is also an argument that it could generate long-term benefits.
“There’s the argument that the increase in taxes will fund wider programmes such as infrastructure, which will help kick-start work for the SMEs that are vital to the industry’s wider supply chain.”
However, uncertainty remains around how quickly this funding will reach supply chains and whether it will be enough to offset the rising cost pressures. Procurement teams will need to adopt a strategic approach, balancing short-term cost concerns with long-term opportunities for stability and growth.
Decarbonisation as a Key Factor in Procurement Decisions
Sustainability has become a fundamental requirement in public sector procurement. As Crichton notes,
“Sustainability continues to grow in significance and become a regular quality question on UK public sector tenders.”
Procurement teams are increasingly expected to align their strategies with government sustainability targets, ensuring that supply chain partners prioritise carbon reduction and responsible material sourcing. This shift is not just about compliance but more about embedding long-term environmental responsibility into construction practices.
With the UK’s sustainability agenda driving change, tenders now demand more transparency in material selection, renewable energy use, and carbon reduction commitments.
“We are seeing more opportunities land that specifically ask how the successful supplier will be required to use sustainable construction materials and include renewable energy for the end users.”
Beyond materials, sustainability evaluations now include waste reduction strategies and cleaner transportation methods.
Building Resilience Within the Supply Chain
Building resilience in your supply chain is crucial for navigating economic shifts, geopolitical risks and material shortages. A key strategy is to ensure a broad and competitive supplier base.
“Frameworks that offer a limited choice of suppliers often end up resulting in over-inflated prices due to lack of competition.”
Crichton explains. Over-reliance on a single-source supplier can create significant risks, particularly in construction, where subcontracting multiple tiers down the chain can lead to loss of control over quality and pricing. A well-structured framework with a diverse range of pre-approved suppliers is essential for maintaining stability.
Procure Partnerships Framework takes a proactive approach to mitigating these risks by ensuring strong, pre-approved supplier competition. 87 contractors have been appointed on the second-generation National Framework. Moreover, each value band per region has eight contractors, with six contractors on average expressing an interest to tender per project. This structure allows for flexibility and competition, preventing supply chain bottlenecks.
The Role of Frameworks in Strengthening Supply Chains
Public sector frameworks play a vital role in ensuring the smooth delivery of government-funded construction projects by reducing risks, streamlining procurement, and fostering collaboration. As Crichton explains, “Public sector frameworks are there to assist in the development and delivery of government-funded projects. Frameworks, such as Procure Partnerships Framework, cut out a lot of work through the vetting stages that ensures those on their list have already completed a rigorous shortlisting exercise that meets the clients’ requirements and ultimately procurement best practice.”
To find out how Procure Partnerships Framework can support you to strengthen your supply chain, contact a regional Key Account Manager today or visit the website at www.procurepartnerships.co.uk
