CONTRACT MANAGEMENT The Procurement Act: A changing landscape

Natalie Silver

Natalia has worked for Local Partnerships since 2022 as Director in the Commercial Team, taking a lead in the Contract Management Pioneer Programme as well as in areas of leisure services, community asset transfers, programme management, and corporate transformation. She previously worked in a wide range of local government services in frontline delivery and immediately prior to joining Local Partnerships, was a Director for Corporate Services at Herefordshire Council.

In this article Natalia explores the changing landscape of contract management, drawing on her work with councils on the Contract Management Pioneer Programme supported by Crown Commercial Services, and which recently won Best People Development Project at the Government Commercial Function awards 2025. 

Background 

The Procurement Act is something of a deceptive title as it also places significant emphasis on contract management. The Act drives transparency, performance management and value for money, all familiar concepts in local government, with legislation aiming to improve quality and consistency across both procurement and contract management. 

As estate surveyors and property managers you will have multiple experience in contract management in an advisory capacity and directly managing suppliers - therefore be familiar with the national and local drivers to improve contract management. 

Some of those drivers can be tracked back to the collapse of Carillion in January 2018, which was felt across different sectors due to major contracts in property, capital initiatives, housing, prisons, hospitals and even school meals - with around half of their 43,000-workforce based in the UK. The House of Commons briefing found Carillion had been too optimistic about its contracts and paid dividends on expected, not actual, profits. The warnings were not picked up and its auditor was fined £21m for giving the company a clean bill of health. If this seems long ago, we continue to see the impacts of conflicted procurement, neglected contract monitoring and poor governance, as councils find themselves in massive debt or leading to disastrous impacts, as in the Grenfell Tower disaster. 

Obviously, not all consequences of inadequate contract management are on that scale. However, often cited is the leakage figure of 9% (World Commerce and Contracting) in financial loss due to poorly managed contracts. Though this does not specifically relate to local authorities, it is transferable, with councils losing money or at least losing value in the absence of monitoring supplier delivery. 

While councils have established centralised procurement functions that provide consistency and expertise, the same is not true for contract management. Managing contracts remains largely devolved, with responsibility for monitoring and managing third-party delivery placed on officers within service areas. Aside from major contracts such as waste and highways, contract management is often only one element of a wider role, with officers facing competing demands in an increasingly pressured environment. 

At Local Partnerships, we have been involved in delivering the Contract Management Pioneer Programme (CMPP). The programme is funded by Crown Commercial Service, recognising that investment now can transform future contract management practice and culture. CMPP focuses on driving value in local government, council by council, individual by individual. 

More than 100 local authorities are now involved in CMPP – of different types, sizes and at different stages of development. The programme has three distinct elements: 

1. Accredited training for individuals provided by the Government Commercial Function, delivered in modules and tailored to learners’ levels of contract management experience 

2. Facilitated support provided by Local Partnerships for councils who have learners on the accredited training 

3. Productions of tools, templates and guidance in collaboration with councils, which are published for anyone to download. 

Being clear on the expectations for contract management 

From our work with councils, a number of common issues consistently emerge. One of the most significant is the lack of clarity around expectations in the management of contracts. Officers often develop their own approaches, learning on the job and operate in isolation. This can lead to missed good practice, duplication of effort and inconsistent standards. 

One effective response is to create a contract management framework that complements the formal Contract Procedure Rules. A framework sets out principles, monitoring requirements, approaches to risk, change and poor performance, and clarifies roles across the commissioning lifecycle. We worked with Norwich City Council to develop a framework template that councils can adapt to their own needs (see tool 13). 

Procurement and contract management is often caught between legislation and local demand, service requirements and what the supplier can deliver (Figure 1) 

Figure 1: Roles

Being proportionate through tiering 

Contracts vary in scale, value and impact, and should therefore be managed proportionately. Tiering enables councils to assign appropriate resources by assessing contracts against value, impact and risk, informing monitoring, assurance and reporting requirements. 

Two tools support this approach: a full tiering tool developed with Central Bedfordshire Council, and a lighter-touch segmentation tool developed with Westminster City Council for situations where many contracts need to be assessed at once. Both can be adapted to reflect the council’s local priorities (tools 6 and 24). 

Figure 2 : Tiering

Addressing capacity 

Proportionate monitoring is essential to managing capacity. Officers are often pulled in multiple directions, with contract management forming only part of their role. There can be a temptation to rely on suppliers to manage meetings, agendas, and reporting that suits their systems rather than what the council needs. While often well intentioned, this risks ceding control and allowing suppliers literally to set the agenda. 

Capacity can also be improved by stripping back unnecessary activity. Processes can form organically over time, with layers of different activity that can create duplicated effort, repeated actions and bottlenecks based on a single point of failure. Our Business Process Mapping toolkit provides a step-by-step guide for councils to record and streamline commissioning processes to address these issues: BPM Toolkit. 

Skills and capabilities 

Capability and capacity are closely linked, with contract managers expected to know and do a great deal. Research conducted with Michael Page Recruiting found that CVs for procurement, commissioning and contract management jobs were heavily weighted towards technical skills, while the implications of the Procurement Act requires softer skills such as negotiation, analysis, performance and project management – therefore a potential mismatch in what is being offered to what is needed. 

Interestingly, on the project management point, we are finding councils are integrating their procurement processes and contract management requirements with how they manage projects across the organisation, adopting project management tools, templates and software. 

The workforce is also recognising the need for new skills. In a survey of 37 councils, with responses by 148 officers working in contract management – the top requirement for training was financial analysis, closely followed by performance management and negotiation skills (ref: 12.-Capability-Survey-Results.pdf) 

Figure 3: Skills required

Roles that support the contract manager 

Contract managers should not feel isolated. Larger contracts often have project teams, but many contract managers work alone. We consider it a key requirement to have a named Senior Responsible Owner (SRO) for every contract, providing oversight, accountability and escalation routes. The SRO will often be, though not always, the line manager of the contract manager, and they will usually have senior responsibility for several contracts in addition to their day job. It means the contract manager has a reporting line and can raise issues, concerns and share ideas. 

The procurement team may step back in when it needs to play “bad cop” with the supplier, reminding them of the obligations they accepted during the tender process. The team will also support contract managers during the contract change process, sometimes aid self-assessments and will obviously support the re-procurement process. 

The legal service sits further in the background, to be engaged when the contract escalates into a dispute. However, legal teams often say they were brought in too late and could have helped with mitigation measures before the situation caused a significant impact. 

Audit can also play a valuable proactive role during contract management, rather than providing a retrospective view at the end of a contract – usually brought in when things go wrong. With clear parameters, audit teams can identify where issues may arise and give councils time to address risks before they escalate. 

Senior management and assurance boards 

We all know from working in local government that senior managers and members don’t like surprises, but do like confidence that contracts are being effectively managed. While they may accept that issues will arise, they need assurance that problems are being identified early and that proactive action is being taken. This is where contract management assurance boards can play a valuable role, acting as a line of defence and identifying where additional support or intervention is required. 

Members of the assurance board should have the authority to remove organisational barriers, allocate resources, and help troubleshoot problems. The board can also review the overall “health of contract management” and take action where needed. This assessment of “health” can be informed through: 

• Profiling – value of contracts, number of contracts by tiering levels, trends in direct awards, directorate profiles, profile of suppliers including number of local/SMEs providers, invoices paid to target date 

• Performance – overview of performance by RAG rating, KPI delivery and social value contribution, profile of over or under spend 

• Added value – innovation schemes that add value, market development, meeting net zero, support for the local economy 

• Compliance – roles and accountabilities in place, monitoring expected requirement, ensuring risk management is up to date. 

See our guidance on assurance boards (tool 23), reporting contract management health (tool 18) and governance (tool 27). 

Key performance indicators and social value measures top of form 

KPIs feature prominently in the Procurement Act. For contracts over £5m KPIs must be published at least annually, and suppliers will

understandably be reluctant to have poor performance exposed. Each KPI has its own journey - an essential part of the specification, but with a wider direct or contributing factor to achieving the ambitions as outlined in the corporate plan. Achieving the right KPIs is therefore essential - this means establishing a robust baseline, a clear methodology, and meaningful targets, ideally including stretch targets. 

At the same time, KPIs must be realistic. They should be informed by market engagement (another key feature of the Procurement Act) as no one wants the contract to fail (apart from a competitive supplier!). There are cases where, even though the KPIs were agreed by the supplier, the council was considered to be “unreasonable” in setting the expectation too high and, in part, blamed for the contract collapsing. 

Social value represents one of the most significant shifts in procurement and contract management, yet practice remains inconsistent. Some councils treat it as an add-on, while others, such as Westminster City Council, has embedded it strategically, enabling social value to deliver tangible benefits and savings, to the point where the council can review its procurement pipeline to see if social value could deliver that contract. It is often low value in the scheme of things, but a direct saving for the council nevertheless. 

A key message on social value is to treat it the same as a KPI, as a commitment made by the supplier, which means regular monitoring, rather than assessing delivery at the end of the contract. 

To finish…savings and culture change 

A key driver for councils is to achieve budget reductions. Savings can be built into procurements and set as targets for suppliers. In practice, however, achieving savings often requires difficult decisions about scope, particularly given the pressures of inflation, wage growth, and energy costs, all of which work against reducing expenditure. A related challenge is ownership: who “owns” the savings generated through effective procurement and contract management - and who owns the failure when those savings do not materialise? This question is especially important when making the case for investment in centralised contract management support, which is often expected to be funded from future savings. 

While these issues have a contract management dimension, they are also cultural, reflecting established customs and practices within the council. Although legislation sets expectations for contract management standards, how contracts are managed in reality is equally a cultural issue. 

Some councils are taking this so seriously that improving contract management practice now forms a core part of their wider transformation programmes. 

Figure 4: National Survey

CMPP exists to support councils through this change, offering free resources, support and training. The programme is full for 2025/26, but councils are encouraged to get in touch to learn more about the 2026/27 intake. 

Also, if you are involved in any form of contract management in local government – in a support role or in managing suppliers – please complete the National Survey of Contract Management. This will provide a benchmark and baseline for councils across the country. The National Survey of Contract Management