On 23 September 2026 Havant Borough Council's monitoring officer and section 151 officer reported about £16.6 million paid to temporary accommodation providers since 2019/20 with no written contracts officers could find. What it costs when a supplier, the Procurement Compliance Service or the public record finds the same thing first, and six questions to ask this quarter.
If your authority reconciled last year’s payments to its contracts register this quarter, on temporary accommodation, agency staff, care placements or software, what would it find, and who would find it first? Havant Borough Council has just answered the first question in public: about £16.6 million paid to temporary accommodation providers since 2019/20 with no written contracts evidenced, found by its own officers reading the payments data. Before the detail, six questions; each carries a price when someone else answers it for you.
Six questions to put to yourself before you read on
- If a section 108 notice from the Procurement Compliance Service arrived tomorrow, could you put the documents on the table within 30 days or are they lost in emails and SharePoint?
- How much of last year’s third-party spend can you tie to a signed contract on the register?
- Which suppliers have been paid more than £30,000 in total over the last two financial years with no contract, no waiver and no notice?
- Where has one supplier’s spend crossed a procurement threshold in pieces, invoice by invoice, without any formal contract?
- For each direct award since the Act commenced, do the transparency notice and the contract award notice tell the same story, or could you have been challenged?
- Which contracts have been extended or varied since the Act commenced without a contract change notice?
What follows is what Havant’s officers found, why it took a statutory report to find it, and what it costs when someone else finds it first.
What did Havant’s statutory officers report?
The finding reached Cabinet on 23 September 2026 in a joint report from the authority’s monitoring officer and section 151 officer. At least thirteen providers had been paid more than £30,000 in total; four had been paid between £665,273 and £6,233,207.49, above the threshold the report cites. No dishonesty or misconduct was found. The review began in December 2025, eight months after procurement came back in-house, when officers started examining expenditure data across all services (Havant Borough Council, Cabinet, 23 September 2026; The News, Portsmouth, 16 September 2026).
| Finding | What the report says |
|---|---|
| Payments reviewed | About £16.6 million, financial years 2019/20 to 2026/27, up to and including 7 July 2026 |
| Paid from 2022/23 onwards | About £13.6 million, which is 82% of the total (13.6 divided by 16.6) |
| Highest single year | About £3.8 million in 2024/25 |
| Providers paid more than £30,000 in total | At least thirteen |
| Providers above the procurement threshold | Four, with cumulative payments from £665,273 to £6,233,207.49 |
| Threshold the report applies | £663,540 including VAT since January 2022 |
| Written contracts | None evidenced: officers could not identify any, and service level agreements were used instead |
| Authority for the payments | No proper delegation identified, so the report considers the payments unlawful |
| Dishonesty or misconduct | None identified |
Source: Havant Borough Council, Cabinet, 23 September 2026, Item 13, joint report of the Monitoring Officer under section 5A(3)(a) of the Local Government and Housing Act 1989 and the Section 151 Officer under section 114A(2)(a) of the Local Government Finance Act 1988; LocalGov, 24 September 2026.
The report measures the payments against the authority’s Contract Procedure Rules and Financial Procedure Rules, the Public Contracts Regulations 2015 and the Procurement Act 2023, because the spend spans both regimes. It finds that best value was probably not achieved. Advice was taken from King’s Counsel and Cabinet agreed a remedial action plan; the Leader’s statement accepted that the authority could not evidence that the spend had been handled properly (LocalGov, 24 September 2026).
Why did it take a statutory report to surface it?
Because the spend never presented itself as a procurement. Payments went out against service level agreements, invoice by invoice, to providers who were keeping people housed. No procurement, so no tender notice on Find a Tender. No written contracts, so nothing on the contracts register. No delegation approving the payments, so no decision point at which the rules would have been applied. Every control an authority runs on its procurements looks at the procurements it knows about, and uncontracted spend sits outside that view by definition.
It is found from the other end: from the payments ledger back to the contract that should sit behind each supplier. Once found, the statutory officers had little discretion, because a section 114A report and a section 5A report are duties, and both are public. Havant’s remedial action plan commits the authority to an authority-wide assurance review of every procurement and contractual arrangement within six months, mandatory training within three, central recording of every waiver and exemption, a twelve-month programme to regularise the accommodation spend, and quarterly reporting to its Corporate Governance Board (Appendix 3, Remedial Action Plan, 23 September 2026).
What does it cost when someone else finds it first?
Five routes lead to the same finding. Only one of them runs on the authority’s timetable.
| Who finds it | Example | What it costs or puts at risk | Time limit |
|---|---|---|---|
| A losing bidder, during standstill | Parkingeye v Velindre, 1 May 2026: automatic suspension kept in place | The award cannot be signed; the incumbent stays; legal costs on both sides to trial | 30 days from knowledge (section 106); suspension automatic (section 101) |
| A supplier seeking set-aside after award | Apasen v Tower Hamlets, 28 August 2026: strike-out refused; £38.5 million of direct awards in issue | Contract set aside unless an overriding public interest applies; the cost of re-procuring is disregarded (section 104) | The earlier of 30 days from knowledge and six months from signature (section 106) |
| The Procurement Compliance Service | Scope and remit, version 1.1, 15 May 2026 | At least 30 days to produce documents (section 108); published recommendations and progress reports (section 109) | None on a referral |
| The public record | Spend over £500 (Local Government Transparency Code 2015); payments over £30,000 on new contracts (section 70), next notices due 30 October 2026 | Anyone can set the payments list against the contracts register | None |
| Your own statutory officers | Havant, 23 September 2026 | A published report, twelve-month regularisation, mandatory training, a six-month review, quarterly reporting | Duty arises on awareness (section 114A, Local Government Finance Act 1988; section 5A, Local Government and Housing Act 1989) |
Source: Procurement Act 2023, sections 101 to 106 and 108 to 110; Cabinet Office, New legislative requirements under the Procurement Act 2023, version 12, March 2026 (section 70 applies to public contracts whose procurement began on or after 1 April 2026, with each quarter’s notices due within 30 days of the quarter end); the judgments and documents named in each row.
The first two rows are this year’s two judgments under the Act, and neither has yet been decided on its merits. In Parkingeye v Velindre University NHS Trust and Cardiff and Vale University Health Board, the tender notice gave an estimated value of £100,000 excluding VAT, the income the health board expected, for a car park contract the judgment records as worth at least £10 million and possibly more than £20 million to the supplier (paragraphs 39 and 55). The incumbent lost, issued its claim on 19 January 2026, and on 1 May 2026 the court refused to lift the automatic suspension, because section 102 puts the public interest in lawful award first. Under the Public Contracts Regulations 2015 suspensions were lifted in roughly 75% of cases (Browne Jacobson, LocalGov, 15 May 2026). The authority cannot sign and the incumbent cannot be replaced for as long as the case runs.
In Apasen v London Borough of Tower Hamlets, a transparency notice published at 11:07 on 13 March 2025 gave the urgency justification for direct awards of home care contracts, and the contract award notice published at 14:20 the same day did not. The authority’s application to strike out the set-aside claim failed on 28 August 2026, with the five remaining lots, worth £38.5 million excluding VAT, still in issue. Section 105(4) matters here: a notice that did not give accurate information is treated as though it was never published, and an unpublished contract award notice opens the set-aside route for up to six months after signature.
The legal bill is the smaller part. In Good Law Project v Minister for the Cabinet Office the Cabinet Office estimated more than £450,000 to defend a one-day hearing over a direct award, and the court capped recoverable costs at £120,000 per party (Local Government Lawyer, 28 April 2021). The larger part is the service: an award that cannot be signed, an incumbent that cannot be replaced, or a contract set aside regardless of what re-procuring it will cost.
What are your six answers worth?
Havant has given its officers six months to answer those questions for every arrangement it holds. The answers come from the payments ledger, not the procurement files: reconcile third-party spend to signed contracts, list what does not reconcile, rank it by value and by the route that should have applied, and decide what to regularise first. Our consultants run that reconciliation as a fixed-scope Procurement Act 2023 Compliance Review, present the findings to the executive leadership team, and train the officers who will hold the position afterwards.
What does this mean for suppliers?
If a public body pays you with no contract behind the payments, you have no contract to enforce: regularisation means competition, and Havant has given itself twelve months to run it, so watch for the pipeline notices that follow reports like this one. If you are a bidder who lost, the clock is 30 days from knowledge, the notices are evidence, and the court in Parkingeye said the public interest will generally tend in favour of keeping the suspension in place (paragraph 31).
Havant’s report describes seven years of ordinary payments, with no dishonesty found, that ended as a published finding of unlawful expenditure. What changed in 2026 is not the spend but who can see it and what they can do about it: a supplier with a 30-day clock and a suspension that holds, a compliance service with a 30-day notice, and a payments record anyone can read. Of the five routes in the table, the only one whose timing an authority chooses is its own review, and it starts with the six questions above.
Questions section 151 officers and heads of procurement are asking
What did Havant's statutory officers' report of 23 September 2026 find?
That about £16.6 million was paid to temporary accommodation providers between 2019/20 and 7 July 2026 without written contracts or a compliant procurement that officers could evidence; that at least thirteen providers were paid more than £30,000 in total and four were paid between £665,273 and £6,233,207.49; and that, with no proper delegation identified, the payments are considered unlawful. No dishonesty or misconduct was identified and Cabinet agreed a remedial action plan (Havant Borough Council, Cabinet, 23 September 2026).
What is a section 114A report?
Section 114A of the Local Government Finance Act 1988 requires the chief finance officer of an authority operating executive arrangements to report to the executive if it appears that a decision has been made, or is about to be made, that involves unlawful expenditure. The monitoring officer has a parallel duty under section 5A of the Local Government and Housing Act 1989 to report a contravention of law. Havant's two officers reported jointly (Havant Borough Council, Cabinet, 23 September 2026).
Can a contract be set aside under the Procurement Act 2023 because a notice was wrong?
Yes. Section 105(4) treats a notice that did not give accurate information about the contract as not published, and an unpublished contract award notice is a set aside condition. Where a condition is met and a breach is established, section 104 requires the court to set the contract aside unless there is an overriding public interest, with the option of shortening the contract instead, and damages in either case (Procurement Act 2023, sections 104 and 105).
How long does a supplier have to bring a challenge?
Thirty days from the day the supplier first knew, or ought to have known, of the circumstances. For set-aside claims the limit is the earlier of that 30 days and six months from the day the contract was entered into. The court can extend for good reason, but not beyond three months from the date of knowledge (Procurement Act 2023, section 106).
What can the Procurement Compliance Service require of an authority?
Documents and assistance under a section 108 notice, with at least 30 days to comply; action in response to recommendations under section 109, to which the authority must have regard; and progress reports, which are published on GOV.UK along with the investigation report. It prioritises institutional and systemic non-compliance rather than single procurements (Cabinet Office, Procurement Compliance Service Scope and Remit, version 1.1, 15 May 2026).
Sources: Havant Borough Council, Cabinet agenda for 23 September 2026, Item 13, Procurement of Temporary Accommodation, joint report of the Monitoring Officer and the Section 151 Officer, and Appendix 3, Remedial Action Plan; LocalGov, Council tightens governance after temporary accommodation procurement gap found, 24 September 2026; The News, Portsmouth, reports of 16 September 2026 and 25 September 2026; Parkingeye Ltd v Velindre University NHS Trust and Cardiff and Vale University Health Board [2026] EWHC 1019 (TCC), judgment 1 May 2026, paragraphs 39 and 55; Browne Jacobson, Procurement Act 2023 first legal challenge: lessons for local authorities, LocalGov, 15 May 2026; Apasen Ltd v London Borough of Tower Hamlets [2026] EWHC 2239 (TCC), judgment 28 August 2026, with Find a Tender notices 2025/S 000-009158 and 2025/S 000-009237, 13 March 2025; Local Government Lawyer, High Court judge criticises disproportionate £450k costs estimate, 28 April 2021 (Good Law Project v Minister for the Cabinet Office [2021] EWHC 1083 (TCC)); Cabinet Office, Procurement Compliance Service Scope and Remit, version 1.1, 15 May 2026; Cabinet Office, New legislative requirements under the Procurement Act 2023, version 12, March 2026; Procurement Act 2023, sections 101, 102, 104, 105, 106, 108, 109 and 110; Welsh Government, Procurement Act 2023 guidance: remedies, 3 March 2025; Local Government Transparency Code 2015; Local Government Finance Act 1988, section 114A; Local Government and Housing Act 1989, section 5A; Local Government Act 1972, section 135.