Procurement TOM and Third Party Spend Review
The Context
Luton Borough Council is undergoing a significant transformation to realise the ambitions of its Luton 2040 vision. As part of this change, the Council identified procurement as a key enabler for improved efficiency, value for money and financial sustainability. With the Procurement Act 2023 coming into force, there was a clear need to modernise the procurement function, strengthen governance and enhance commercial capability. Human Engine was commissioned to design a new Target Operating Model and review contracts to identify opportunities for savings and improved delivery.
Our Approach
We led a comprehensive programme spanning operating model redesign and commercial savings discovery, structured into four key phases:
Engage and Explore:
Reviewed procurement policies, processes, structures and performance metrics.
Conducted 20+ engagements across corporate procurement, service leads and senior officers.
Conducted a top 100 contract review to identify cashable savings, efficiencies and governance improvements.
Analysed contract portfolio by category and value, focusing on high-impact areas such as passenger transport, property maintenance and ICT.
Benchmarking including team size, structure, thresholds and practices against other councils and best practice.
Validated recommendations with key stakeholders including project sponsors and senior leaders.
Devise and Develop:
Assessed the previous procurement model and compliance with the Procurement Act.
Developed a new operating model with updated structure, roles and governance approach.
Developed business cases with quantified savings opportunities, validated with finance and service leads.
Produced a full implementation plan with timelines, milestones and resource requirements.
Iterate and Improve:
Integrated feedback and refined savings opportunities and contract management improvements.
Confirm and Conclude:
Delivered the final operating model, savings tracker and implementation roadmap.
Outputs and Outcomes
This combined programme delivered a modern, strategic commercial function for Luton Council and a clear path to measurable savings:
A new procurement operating model was adopted, aligned to best practice and the Procurement Act 2023, including a shift to category management and a new team structure with 7 additional posts.
Strengthened governance and processes to ensure proportionate and streamlined procurement and contract management oversight.
Over £2m in procurement-related savings identified through the contracts review, supporting the council’s wider transformation and budget position.
Improved transparency and compliance, with clearer roles, responsibilities and performance management built into the new model.
Strong internal ownership of the model, with buy-in from procurement leads, services and senior leadership to support implementation.
This work enabled Luton Council to build commercial capability, unlock savings and prepare for a more strategic, value-focused approach to procurement and contract management.
About Us
Human Engine is a leading management consultancy with specialisms in strategy, transformation, digital, commercial, procurement and projects.
Founded in 2018, we have partnered with more than 50 local authorities, central government, NHS organisations and national charities to help transform their strategies, operations and cultures.
Our mission is to help individuals and organisations to do the best work of their lives. We do this by blending first-hand, practical experience of the problems we help our clients solve with award-winning consulting expertise and an approach based on trust, collaboration and partnership.