Question to the Cabinet Office:

To ask the Minister for the Cabinet Office, what guidance his Department has issued on (a) the selection and use of KPIs in government procurement and (b) whether failure to meet KPIs is grounds for termination of contracts.

The Procurement Act 2023, introduced by the previous Government, empowers contracting authorities to terminate their contracts for serious breaches of contract or poor performance. It also now makes it a statutory requirement for contracting authorities, where appropriate, to set and publish at least three key performance indicators for public contracts with an estimated value of more than £5 million.

Additionally, the Cabinet Office provides guidance on the selection and use of Key Performance Indicators (KPIs) through the Sourcing Playbook. This guidance provides that all new projects should include relevant and proportionate performance measures designed to incentivise delivery.

While specific grounds for termination are subject to individual contract terms, it is the responsibility of each contracting authority to manage supplier performance.