Procurement as a Strategic Lever: Insights from the Truth About Local Government Roundtable

With inadequate funding to meet the ever-growing demands on public services, it has never been more critical for local government to extract maximum value from every pound spent. This is especially true in the realm of procurement and contract management areas that have traditionally been viewed as operational necessities, but which now present a strategic opportunity for transformation.

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The introduction of the Procurement Act 2023 (PA23) earlier this year marks a significant shift in the public sector’s commercial landscape. The Act provides councils with greater flexibility and autonomy in how they procure goods and services, opening the door to more innovative, outcome-focused approaches. For local government, this is a moment to reframe procurement not as a compliance exercise, but as a tool for delivering better results for communities.

When you consider that local authorities collectively spent over £80 billion with suppliers in the last financial year, the scale of opportunity is enormous. This should be front of mind for every Chief Executive and senior leadership team. Used strategically, procurement can drive local economic growth, improve service delivery, and foster innovation.

At a recent Truth About Local Government roundtable, participants explored how councils can make procurement and contract management matter more within their organisations. There was a clear appetite to improve effectiveness across the sector, but also recognition of the challenges particularly around commercial capability. Skill levels vary widely, and many councils lag behind private sector counterparts in areas such as negotiation, market engagement, and contract oversight.

One of the most notable changes under PA23 is the ability to negotiate during the procurement process a tool that was previously unavailable to councils. However, this shift requires a new skillset. Many local authorities lack experience in structured negotiation, and investing in training for staff involved in tendering is now a strategic imperative.

Yet, securing a good deal at the point of procurement is only part of the story. The real value is realised through effective contract management. A contract that looks promising on paper can quickly become problematic if not actively managed. Councils must ensure that contracts are monitored, relationships with suppliers are nurtured, and performance is tracked over time especially for long-term or high-risk agreements.

This requires clarity of roles and responsibilities. Every contract should have a designated contract manager who is accountable for delivery and supported with the right tools and training. Whether through internal commercial teams or external development programmes, building contract management capability is essential. Free resources such as basic contract management training via the Government Commercial College are available to all public sector employees and should be widely promoted.

The roundtable also highlighted the importance of pre-market engagement a process where councils consult with suppliers before issuing formal tenders. This practice, now actively encouraged under PA23, allows authorities to better understand market dynamics, explore innovation, and shape more effective procurement strategies. When insights from these engagements are shared across councils, the benefits multiply. Collaboration across the sector can lead to smarter procurement, better outcomes, and more efficient use of collective spend.

While procurement and contract management may seem peripheral amid the sector’s broader challenges, they are in fact central to success particularly in the context of local government reorganisation (LGR). Creating new unitary councils demands a thorough review and integration of existing contracts. This complexity requires skilled professionals who understand procurement, contract management, and commercial strategy. The simultaneous timelines of LGR across multiple areas will place pressure on the availability of these skills, making recruitment and retention a key concern.

Ultimately, local government stands to gain significantly from investing in procurement and contract management capability. The implementation of PA23 provides the momentum to do so. But this must be more than a technical upgrade it requires a cultural shift. Procurement should be seen as a strategic function, embedded across the organisation and championed by senior leaders.

In a time of financial constraint, this is not a luxury it’s a necessity. Ensuring that public money delivers maximum value through well-managed contracts is a responsibility that belongs to the whole organisation, not just the procurement team. Recognising and resourcing this work is an investment in the future of local government.