Local authorities have spent much of the last year focusing on procurement procedures, notice publication and the practical implications of the Procurement Act 2023 at award stage. A different issue is now moving into sharper focus: contract performance transparency.
Since 1 January 2026, section 71 of the Act has been in force. That matters because councils are no longer dealing only with how a contract is procured. They are also dealing with a live statutory regime for recording and publishing aspects of supplier performance during the life of a contract.
For local authority procurement and contract management teams, this is a significant shift. It means poor contract management is no longer just an internal governance problem. In some cases, it can now become published performance information with wider implications for future procurements.
Why this is a live issue now
The key change is the introduction of the contract performance notice.
This is a new notice under the Procurement Act 2023. It is used to publish information about supplier performance against key performance indicators, and in some cases to record breaches of contract or failure to perform to the authority’s satisfaction.
For councils, this is important because it pushes contract management into the formal transparency framework of the Act. Authorities that have concentrated heavily on tender compliance but have not strengthened post-award performance management may now find they have a gap in their overall procurement governance.
In simple terms, the regime now expects authorities not only to set performance expectations properly, but to assess, record and publish certain outcomes in a structured way.
Which contracts are affected
There are two related but distinct issues.
The first concerns KPIs. Before entering into a public contract with an estimated value of more than £5 million, a contracting authority will generally need to set at least three KPIs. Those KPIs must then be published, and the three regarded as most material to contract performance must be identified in the contract details notice.
That will affect a number of larger local authority contracts, especially in areas such as major services, strategic outsourced provision, facilities management, highways, waste and other high value operational arrangements.
There are exceptions. The obligation does not generally apply to frameworks themselves, although it can apply to call-off contracts over £5 million. It also does not generally apply to concession contracts or light touch contracts.
The second issue is broader. The requirement to publish information about certain breaches of contract or supplier failure to perform is not limited to contracts over £5 million. It can apply more widely across public contracts, including situations where the authority has had to escalate performance concerns in a meaningful way.
That wider point is what makes this especially relevant to councils. Even authorities without a high volume of very large contracts still need to understand the publication implications of serious supplier underperformance.
What councils actually have to publish
Where KPIs are required under the Act, authorities must assess performance against them at least once in every twelve-month period during the life of the contract and again on termination. The resulting assessment information is then published in a contract performance notice.
This is not simply a private contract review dressed up as compliance. It is published information on the central digital platform.
Importantly, the performance notice focuses on the three KPIs considered most material at the time the notice is published. That may not always be identical to the KPIs that looked most important at contract award. In a long contract, what matters most during mobilisation may be different from what matters most during steady state delivery.
That means councils need a more thoughtful KPI approach from the outset. Weak, generic or badly drafted KPIs are no longer just poor contract management practice. They create future publication problems.
Poor performance can now have procurement consequences
The more strategic issue is what happens when a supplier seriously underperforms.
A contract performance notice is also used to publish information about certain breaches of contract and cases where a supplier has failed to perform to the authority’s satisfaction. If a supplier has been given a proper opportunity to improve and still fails to do so, publication obligations may arise. If there has been a breach that leads to partial termination, damages or a settlement agreement, publication obligations may also arise.
This matters because the notice is not only about transparency. It also feeds into the wider exclusion regime under the Act.
In practical terms, a published notice relating to breach or poor performance can become part of the objective record another contracting authority may consider when deciding whether a supplier is excludable in a future procurement. For councils, that turns performance management into something far more consequential than a service review meeting or a dispute file.
It also means authorities need to be disciplined and fair. A poorly evidenced performance process could create unnecessary risk for the authority, while a weak process could mean genuinely serious supplier issues are never escalated properly.
Why local authorities should pay attention now
Many councils already monitor contract performance, but not always in a way that aligns neatly with statutory publication requirements.
Some authorities still rely heavily on narrative reviews, inconsistent scorecards or informal supplier management meetings. Others have KPIs in contracts, but they are too vague to support robust assessment. In some cases, improvement notices or rectification plans exist operationally but are not documented in a way that would support later publication decisions.
That is where the Procurement Act 2023 changes the practical picture.
The issue is no longer just whether contract managers are holding suppliers to account. It is whether the authority’s contract management model is strong enough to support lawful, accurate and defensible publication where the Act requires it.
This is particularly important in councils where procurement, legal, commissioning and operational contract management are handled by different teams. If those teams are not aligned, the authority can easily miss a trigger point, publish too late, or struggle to evidence why a supplier was said to have failed to improve.
What councils should do next
The first step is to review high value contracts and template documents now. Authorities should check whether contracts likely to exceed £5 million are being drafted with meaningful KPIs that can genuinely be assessed over time.
The second is to strengthen the link between procurement and contract management. The officers designing the procurement should be clear about how performance will be measured, who will assess it, and how evidence will be retained.
The third is to review escalation routes for poor performance. Authorities should be clear about when underperformance becomes a formal failure to perform, what opportunity to improve has been given, and how that decision is documented.
The fourth is to update governance and training. Contract managers need to understand that performance issues may now have publication and exclusion consequences. Procurement teams also need visibility of serious contract failures because those issues can affect future supplier selection decisions.
The main takeaway
For local authorities, the Procurement Act 2023 is now reaching beyond procurement process and into live contract management.
The practical question is no longer only whether the council can run a compliant tender. It is whether the council can operate a compliant, evidence-based and publication-ready approach to supplier performance once the contract is in place.
Authorities that act now will be in a stronger position to manage performance properly and publish with confidence. Authorities that do not may find that the new regime exposes weaknesses in KPI design, contract oversight and internal governance that were previously easy to overlook.