Many councils spend heavily on technology but still struggle to embed systems that support staff and residents well. We’ve been looking at why, and what might change.

Local government spends around £2 billion a year on IT, with half of that going on software applications. Yet, across the sector, we’re still seeing:

• 94,000 staff hours lost annually to tasks that technology should automate
• Councils are consistently unhappy with the tech they use, with systems that don’t meet the needs of staff or residents
• Poor contract management costing up to 9% of organisational budgets

These issues are familiar to anyone working in digital and data in local government. Technology procurement isn’t just a back-office function – it shapes how we deliver services, impacts staff and residents, and determines whether we get value for money or drive innovation.

What’s holding us back?

As part of a discovery into technology procurement in local government, I’ve spoke to councils across the country, and found:

• Procurement is often reactive, shaped by deadlines rather than strategic planning
• Solutions are sometimes chosen before understanding the problem to be solved
• Time and resource capacity are stretched, making good procurement difficult
• Evaluation takes significant effort and is rarely given the space it needs
• Contracts aren’t commercially minded or precise enough, limiting how well suppliers can be held to account
• Adoption and BAU (Business As Usual) support are challenging once systems go live

In Housing, public data shows that just three suppliers have won nearly 70% of competitive tenders since 2015.

“We decided on a solution before working out what the problem was we were trying to solve.” – Anonymous local authority #1

“We know we get the best outcome when we had a good engagement with an organisation before they buy. … We like to be engaged up front, it helps us create the right solution.” – Supplier

 “The contracts … end up being quite vague and don’t really hold suppliers accountable.” – Anonymous local authority #2 

What needs to change?

We’re ready for a smarter, more consistent approach to procurement. We’re already doing a lot of these things, but we need to move from pockets of innovation to sector-wide transformation.

Collaboration across councils: Share best practice and reusable resources (procurement templates, service patterns, draft architectures, user needs libraries) to shape the supplier market and benchmark procurement.

Systemic, policy-led change: Policy and legislation from central government to better manage risk, including technology standards, data standards and interoperability standards for suppliers to be held accountable to. 

Clear roadmap of the procurement journey: Staff need visibility of every step, role, and responsibility in the procurement process. This clarity enables better planning, efficient delivery, and ensures everyone is aligned from start to finish.

Surfacing real user needs: User-centred procurement leads to better adoption, improved experiences, and technology that truly delivers value.

Outcome focused partnerships with suppliers: Forums for early market engagement, pilot new technologies in sandbox environments, shift towards outcome-based contracts and commercial acumen in-house for contract management. 

Putting it into practice

We’re always working on different procurements at Westminster City Council and we’ve been keen to explore how we can shift the dial; ensuring we don’t simply procure ‘like for like’ or tick off a list of hundreds of capabilities.

What we’ve done so far:

• Brought together experts early in-house from procurement, legal, finance, digital, tech and service areas
• Workshops to map processes and user journeys, as a baseline for needs
• Shadowing officers in their day to day to see how they use the current tools and systems
• Strategic sessions with leadership teams to align with our organisational strategy
• Ran an AI hackathon to explore prototyping in key problem areas and understand how we could do things differently 
• Early market engagement with suppliers before tenders go out
• Learnt from other local authorities via sharing sessions 
• Ensuring suppliers are being asked to demo how their products meet real user journeys as part of tender processes
• Joining together with other local authorities, through LOTI and MHCLG, to engage and influence improvements to existing products with suppliers

The ideal approach: people-first, outcome-driven, collaborative

Procurement isn’t just a list of features. It’s about user experience and has the opportunity to spark service transformation and design better public services.

• People-first technology: Start with real pain points, validate and prioritise.
• Outcome-driven partnerships: Focus on value for users, and show how this can be demonstrated. Make it measurable. 
• Smarter choices through collaboration: Influence suppliers together, share what works, and move faster.

If your council is exploring these challenges or wants to work collaboratively on new approaches to procurement, let’s talk and share, contact us via digital&innovation@westminster.gov.uk. 

Further reading and references:

• Discovery: Procuring Technology for Housing Services (2023)
• TPXImpact (2023): Housing Tools for Social Landlords
• National technological and digital procurement category strategy (LGA) 
• Innovation in Procurement Toolkit (LOTI)
• National Procurement Strategy for Local Government (LGA)
• Contract Management Pioneer Programme (Crown Commercial)
• Procurement Act 2023 Summary Guide
• World Commerce & Contracting (2020): Poor Contract Management Continues to Cost Companies 9% of their Bottom Line 
• Open Contracting Playbook (Better procurement for people and the planet)
• Procurement Act 2023
• Modernising State & Local Government with Cloud (Meritalk)

This blog is written by Katy Beale, Chief Delivery and Engagement Officer, Digital and Innovation at Westminster City Council.