As councils across the UK prepare for Local Government Reorganisation (LGR), the spotlight is on contracts. At a recent virtual round table hosted for senior council leaders, contractual readiness was one of the key themes prevailing – how does a council ensure contractual readiness for LGR?
Contracts can often be overlooked yet are critical for smooth reorganisation transition and continuity of service. Senior leaders in councils should ensure their authorities are commercial covered to continue to provide services to their communities, but also agile and resilient in the face of change – that’s the advice of Barry Snow, Civiteq’s commercial and procurement specialist. Read on for advice on getting your contracts ready for change.
Understanding your starting point
The first step is clarity. It is essential that you clearly understand your current contract landscape and all related services. Build on existing contracts registers to confirm the strategic importance, criticality and necessity of the services provided under each contract and whether you have a paper or digital copy of the contracts (and where they are stored).
Under LGR, council names and structures will be changing so all contracts will need to be amended accordingly. Senior leaders can use the contracts register to plan the necessary changes resulting from LGR and the potential impact on the council.
The risks of poor contract management
From our experience working across UK councils, we have observed that many councils struggle to practice strong contract management. Often, contract administration is not controlled, contracts are not owned by individuals (responsibility falls to teams), and documentation and electronic storage is scattered or incomplete. The lack of control and accountability can lead to significant risks for local authorities, aside from the legal and compliance obligations placed on them:
- Contract documentation becomes out of date and not representative of services being provided
- Checking and validating contract particulars becomes an onerous and inefficient activity
- Service providers are not being held accountable for the obligations and deliverables stated in contracts, including preparation for exit or novation
- Service performance is not baselined against contracts and supplier peers, so not enabling market comparison
- Duplication of cost by paying for the same or similar services twice
If your contracts register establishes ‘what’ needs to change under LGR, contract management gives you a foundation for ‘how’ things need to change.
Taking action now
Preparation should not wait until the eve of LGR and there are keys activities that can be done straight away.
Know where you are now
Build on the contracts register by consolidating and centralising all contract data, documentation and electronic storage. If necessary, call an ‘amnesty’ and request departments share all contracts with procurement (or a project management office).
In preparation for LGR, you will need to know which contracts can be novated to the new organisation(s), which will need to be cancelled, and what auto-renewing contracts need to be stopped, so having a central repository will make the exercise far less time-consuming.
We often hear that AI tools can be used to interrogate contract data to extract key information to help with planning. However, AI is only as good as the data it can extract or has access to so building a complete repository of contracts is the first stage of enabling that functionality.
Planning for the future
Establish clear contract ownership and accountability. Nominate individuals to be responsible for driving the right action for each contract, and to represent the contract/service at a procurement board.
Put in place procurement governance based on an agreed contract transition strategy. Councils must continue to review and renew existing contracts whilst also procuring new contracts as they move towards an LGR deadline. A contract transition strategy with a set of guiding principles (such as length of contract, flexibility, adaptability, and novation capability) to be governed at a Procurement Board will prepare councils for the transition to their new organisation.
The value of an experienced partner
While councils can undertake this work themselves, partnering with a specialist partner such as Civiteq brings added value. With deep experience in local government and market insight across suppliers and products, a partner can accelerate the process, ensure nothing is missed, and help future-proof contracts for the new landscape.
By acting now, council leaders can reduce risk, avoid costly mistakes, and set a strong foundation for success in the new era of local government.
For more information about our commercial and procurement services, get in touch for a chat.
Have a chat with our Account Director, Alex Fillingham, to discuss your preparations for LGR.