The Leicester City Council meeting on 3 July 2025 was scheduled to address contract procedure rules and the Governance and Audit Committee's annual report. The meeting was also scheduled to cover declarations of interest, petitions, questions from the public and councillors, and any urgent business.

Contract Procedure Rules

The council was asked to approve revised Contract Procedure Rules (CPRs), following the implementation of the Procurement Act 2023, which came into effect on 24 February 2025. The Procurement Act 2023 replaces and combines the following:

• the Public Contracts Regulations 2015
• the Utilities Contracts Regulations 2016
• the Concession Contracts Regulations 2016
• the Defence and Security Public Contracts Regulations 2011

The report pack stated that these regulations will continue to apply to procurements started under the old rules.

The revised rules also address the introduction of the Health Care Services (Provider Selection Regime) Regulations 2023, which apply to procurements of relevant health care services.

According to the report pack, key changes under the act include:

• Greater transparency
• Greater review of potential conflicts of interest
• New procurement processes
• More focus on contract management
• Introduction of a Central Digital Platform
• Supplier Exclusion and Debarment List
• Greater oversight
• Change of terminology used

The report pack stated that the act introduces additional requirements to ensure improved transparency, including an increased number of procurement notices that must be published at different stages of the procurement process on the Central Digital Platform¹. A publicly visible Contract Award Notice must now be published before the contract can be issued to the awarded supplier, triggering a standstill period² prior to the award. The council is also required to publish an annual Pipeline Notice for each contract opportunity with an estimated value of £2 million or above that is to be procured in the next 18 months.

In relation to each procurement covered by the act, the council has a responsibility to identify, keep under review and mitigate any conflicts of interest, including potential or perceived conflicts of interest. A Conflicts of Interest Assessment must be carried out and maintained at all stages of the procurement process, including the contract management stage.

Some of the previously available multi-stage procedures have now been replaced by a single Competitive Flexible Procedure (CFP). Additionally, a single-stage Open Tender procedure has been retained in the act.

The act introduces significant changes in relation to the contract management stage, including associated reporting requirements. The council is required to publish a copy of the contract and an annual report on the top three key performance measures for all contracts over £5 million. Where applicable, details of poor performance must also be disclosed, as well as an annual Payments Compliance Notice for all contracts over £5 million.

Some changes have been made to the mandatory and discretionary exclusion grounds, and a centrally managed Debarment List has been introduced. A new national Procurement Review Unit (PRU) has been established with responsibility for oversight of public procurement, replacing the Public Procurement Review Service (PPRS). The act also introduces new language and definitions, which are reflected throughout the revised CPRs.

The Governance and Audit Committee considered the Contract Procedure Rules at its meeting on 23 June 2025. During the meeting, it was noted that providing a separate document showing the changes was difficult as the changes were significant, with terminology and flow of the rules changing to reflect the Procurement Act. The Director of Finance was scheduled to provide an online briefing session to all councillors ahead of the council meeting on 3 July, to provide an overview of the new act and the changes to the Contract Procedure Rules.

A member of the committee enquired about the possibility of additional focus on the local supply chain. It was noted that the Principles and Objectives within the Contract Procedure Rules detail the aims of procurements, and one of these is supporting small and medium suppliers to submit tenders. The council provides support to suppliers wanting to submit bids to the council through provision of information on their website and in-person training. It was further noted that there were a variety of options available, which included strengthening wording to place additional focus on the local supply market in the Preliminary Market Engagement section and could be explicitly stated on the council's procurement website pages and scoring system.

Following questions about how the council was embedding and testing the principles of the Contract Procedure Rules in council processes, it was noted that internal auditors had been commissioned to review procurement areas within the council and that any areas of concern would result in recommendations. The committee will be provided with an update on the outcome of these audits in their regular updates from internal audit.

Members noted that the changes made to the Contract Procedure Rules would result in more costly procurement and queried how the council could streamline costs while adhering to the new requirements of the Procurement Act. The Director of Finance noted that the changes were being managed by the current resources available, resulting in additional strain on teams to ensure the council's compliance with the act. It was further noted that the emphasis was to ensure the processes were as efficient as possible.

Governance and Audit Annual Report 2024-25

The council was asked to receive the Governance and Audit Annual Report 2024-25, setting out the committee's work and achievements over the municipal year 2024/25. The committee's terms of reference require the submission of an annual report on its activities, conduct, business and effectiveness.

The report pack stated that the Governance and Audit Committee considered a wide range of business in fulfilment of its central role as part of the council's system of corporate governance, risk management, fraud and internal control, and conducted its business in an appropriate manner through a programme of meetings and fulfilled the expectations placed upon it. Its membership includes an independent member.

The committee's terms of reference are regularly reviewed and formally confer upon it the role of 'the board' for the purposes of the Public Sector Internal Audit Standards, which are the recognised professional standards for local authority internal audit.

During the municipal year 2024/25, the committee met on seven occasions. All meetings were properly constituted and quorate. The committee's terms of reference require it to meet at least four times during the year.

The key outcomes from the committee's work included:

• Internal Audit: The committee considered the Internal Audit annual plans and monitored delivery and outcomes during the year. The committee also received the Internal Audit annual reports and opinion on the adequacy and effectiveness of the council's framework of governance, risk management and control for 2023/24.
• Counter-Fraud: The committee maintained an effective overview of the council's measures to combat fraud and financial irregularity, considering counter-fraud reports and reviewing and supporting the council's participation in the National Fraud Initiative³.
• External Audit: The committee considered the external auditor's plans and progress and the outcomes of this work, with particular reference to the annual audit of the council's statutory financial statements and value for money arrangements.
• Risk Management: The committee maintained a regular overview of the council's risk management arrangements, including the council's strategic and operational risk registers, identifying potential emerging risks to the council and its services, together with the Risk Management Strategy and Policy and the Corporate Business Continuity Management Strategy.
• Corporate Governance: The committee fulfilled the responsibilities as 'the board' for the purposes of the City Council's conformance to the Public Sector Internal Audit Standards.
• Financial Reporting: The committee received and approved the council's statutory Statement of Accounts for 2023/24 and associated external audit reports.