The Procurement Act 2023 came into force in February 2025, with key post-award reporting duties following in 2026. By the end of October 2026, the first payment-reporting deadlines will have passed in both England and Wales. This article explains what the duties require, why indirect spend is harder to evidence, and what to put in place before the next notice falls due.
The requirements have pushed the Procurement Act deeper into post-award management. Public bodies must now publish detailed information about their payment performance and how major contracts are performing.
Payment performance will form part of the public record. Certain breaches and unresolved poor performance must also be published. Suppliers can raise payment and contract-management concerns with the Public Procurement Review Service, while patterns of repeated non-compliance may lead to investigation by the Procurement Compliance Service.
Your Procurement and Finance processes must meet the new duties in practice, not just in declared policy.
What the duties require
Contracting authorities in England and Wales must now publish payment performance every six months. This includes local authorities, universities and blue light/emergency services. It also applies to NHS bodies for qualifying contracts under the Act, including purchases of medical equipment, IT systems, catering, estates and corporate consultancy. Healthcare services procured under the separate provider selection regimes in England and Wales are outside these reporting requirements.
This six-monthly duty is set out in a Payment Compliance Notice under Section 69 of the Act and includes average payment time and the proportion of invoices paid within the specified timeframes. The notice must be approved by the senior officer responsible for Finance.
For qualifying procurements to which the Section 70 payment reporting applies, where the procurement procedure began on or after 1 April 2026, individual payments above £30,000 (including VAT) must also be published quarterly and linked to the correct procurement, contract, and supplier identifiers.
Contract performance reporting is now closer and more frequent. Public contracts worth more than £5 million will generally require at least three KPIs, with performance published at least annually. Information about certain breaches and unresolved poor performance must also be published within 30 days. This applies where a breach results in full or partial termination, an award of damages or a settlement agreement, or where a supplier is not performing to the authority’s satisfaction and fails to improve after being given a proper opportunity to do so.
You will need reliable payment data and a clear record of the contracts, suppliers, performance issues and decisions covered by each notice.
Why indirect spend is harder to report on
The new duties depend on a traceable record across the Source-to-Pay process. An invoice that arrives without a valid PO number can leave Finance tracing the payment through separate supplier, contract, and procurement records before it can verify the reporting data. If supplier performance is not recorded when it occurs, Procurement may lack the evidence needed to support a contract performance notice.
Authorities need visibility of what they purchased, which contracts governed those purchases, how suppliers performed, and when payments were made. That is easier said than done when records rely on manual entry and ad hoc reconciliation.
How to stay ahead of the new duties
Make payments traceable. Use the required identifiers to link each qualifying payment to the relevant contract and supplier.
Record performance decisions when they happen. Keep evidence for each KPI assessment, and record any response to poor performance.
Set responsibility for each notice. Name who prepares each notice and secure Finance approval where required.
Test the records before the deadline. Use current records to produce a draft notice and resolve anything you cannot verify.
Procurement, Finance, and contract owners need to prepare before notices are due. Waiting until the deadline approaches leaves too little time to determine what happened or to fix inaccurate records.
How stronger processes support compliance, efficiency and savings
Caerphilly County Borough Council manages 95% of its sourcing processes through our Sourcing solution. Built-in procedures, controls, and authorisation criteria support procurement across departments. The Council also uses Proactis for purchasing, contract management, and supplier management, giving them visibility of approximately £196 million in annual third-party expenditure. This gives Procurement a central record of its suppliers and contracts.
The University of Sussex uses a range of our solutions, including Contract Management, to help measure and report on KPIs across its contracts. Contract owners can record performance directly in the platform, giving Procurement a central view of contract performance. The University also uses Unit4 invoice data to monitor payment times and identify where invoices are being held up.
Proactis integrates with ERP and finance systems, connecting procurement activity with the financial records used for reporting.
Make sure the evidence exists before the next notice is due
Use our Source-to-Contract assessment tool to test whether your current process creates a reliable record of contract performance and supplier information ahead of the next reporting round. You can also talk to us to find out how we can help you meet the requirements of the Procurement Act 2023.