Procurement in a Nutshell: Peterborough City Council report labels £17m emergency accommodation spend “unlawful”
6th February, 2026
The monitoring officer and section 151 officer at Peterborough City Council have issued a joint report over "unlawful" payments that saw more than £17m spent on emergency accommodation without a formal tendering process, or member approval.
The report was issued under section 5A(3)(a) of the Local Government and Housing Act 1989 and section 114A(2)(a) of the Local Government Finance Act 1988, It highlighted that there was no evidence of any governance authorising the payments, nor compliantly procured contracts attached to the payments.
In particular, the report outlined that:
- The emergency accommodation payments were made over an 11 year period between 2015 and 2026, totalling around £17.4m.
- Over £7.7m of that £17.4m was paid to a single provider over these 11 years.
The spending was categorised as “unlawful” on the basis that there was a failure by the council officers to procure the emergency accommodation provision lawfully, put written contracts into place, and observe governance requirements.
Among the findings, the report stated that payments to at least six providers, which exceeded £500,000 for their services, breached the council’s constitution. The decision to enter into the arrangements were key decisions under the council’s constitution therefore requiring either cabinet member approval or a cabinet decision.
It was acknowledged that the council’s constitution provides that a director may enter into contracts up to £500,000 in value. However, paragraph 5(c), Part 4, Section 11 of the Financial Regulations of the council’s constitution stipulates that “expenditure may only take place where authorisation has been given and procurement and contract rules are followed”.
The council had arrangements with at least 9 providers that met the threshold requirement under the council’s contract rules for a formal tendering process to be completed. However, there was “no evidence” that the council published a tender for the contract.
The report also highlighted that a rule existed where arrangements with a value of less than £25,000 are entered into, a written record of the quotation must be kept. This record should include the specification of services, payment provisions, termination rights and any terms. At least 13 cases of providers with arrangements valued at less than £25,000 did not comply with this rule.
Recommendations
The report went on to make six recommendations, one of those being to include that the emergency accommodation procurement and contract position be “urgently addressed by officers” to be within the “legal, constitutional and contractual requirements”. It also recommended that an external provider deliver training to council officers on the local authority’s statutory duties relating to procurement. Additionally, all senior officers undertake a comprehensive review of all existing arrangements with third parties to ensure they have been lawfully procured, and appropriate governance requirements have been met.
Finally, the local authority should carry out a thorough investigation and take necessary action if an officer’s conduct is found to have caused the council to act unlawfully.
For further information please contact Melanie Pears or Tim Care in our Public Sector team.
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