Consultancy and professional services (C&PS) spend control
This Spend Control ceased as a requirement on 1st February 2023. Other Cabinet Office Spending Controls remain operational.
Definitions of types of services
1. Consultancy services
These are services:
- that provide advice to fill a knowledge gap. This can be to identify options and recommendations, or advice to assist with implementing solutions; it will usually be related to business change or transformation, so will be time-limited
- where the individuals (consultants) delivering the service (output) will operate outside of the client organisation’s structure and staffing establishment
- where payment is based on the delivery of a defined service (output). This may require a team of consultants working for an extended period of time, or could require a single consultant whose fee will be calculated based on the time taken to deliver the output
- that should not involve the individuals (consultants) working in a Business as Usual environment (eg. advising on legal risk or technical matters). Such contracts should usually be categorised as professional services, rather than consultancy services
2. Professional services
These are services:
- that are not defined as consultancy
- that are not purely or mostly advisory (unless the advice is part of a formal report that is required to undertake business as usual activities eg. a legal opinion or technical report)
- where the individuals delivering the service (output) will operate outside the client organisation’s structure and staffing establishment
- where payment is generally based on the delivery of defined outputs or outcomes (eg. task and finish work)
- that, as with consultancy, deliver a service (output) that may require a team working for an extended period of time, or may be provided by an individual whose fee will be calculated based on the time taken to deliver the service
- that are often delivered in a BAU environment, but may relate to the delivery of a project or programme. They can be responsible for a non-BAU output (eg. legal advisers recruited to provide advice on a specific issue)
- that seek to fill gaps to assist the procuring organisation to deliver or implement an operational service, including those that are BAU. As such, professional services should not be purely (or mostly) advisory and contracts should be defined according to the delivery of outputs and deliverables rather than the number of days of effort utilised
- where for the purposes of the control there is no need for individuals to demonstrate any specific skills, qualifications or experience
- where contractors can be paid according to time worked or for delivery of a defined output or service. This can include Managed Services (MS)
3. Managed service or Business Process Outsourcing?
Managed services (MS) are services that:
- are defined as a team of people who have been engaged to do a specified piece of work
Business Process Outsourcing (BPO) services are:
- where a third party supplier has been contracted to deliver an entire business process.
Compared to BPO, MS contracts tend to be lower value, involve fewer workers and be shorter term. MS also tend to be managed within the department or central government body, whereas BPO are externally managed day-to-day and report to the department or central government body using Key Performance Indicators defined in the contract. For the sake of simplicity, if in doubt organisations may assume that such contracts are classified as MS if they are under £10m in value, or BPO if not.
When does spend still need Cabinet Office approval?
Spend on external labour will still need approval from Cabinet Office when:
- it is contingent labour, as defined in the Contingent Labour Spend Control
- Digital Outcomes and Specialist contracts (DOS) are required, when the spend then falls within the scope of the Digital and Technology spending control.
- consultancy, professional services or managed services form part of a larger piece of work they will need to be referred to one of the other spending controls if their thresholds are reached. In such cases, you should apply the spending control that relates to the largest share of the total contract spend (eg. a contract that contains both consultancy and spend on property leases should be referred to the Property Spend Control). Cabinet Office’s controls teams will then liaise to provide you with a single approval decision).
- it is defined as Business Process Outsourcing (BPO), whereby a third party supplier is contracted to deliver an entire business process, which must be referred to the Cabinet Office under one of the other spending controls if their thresholds are reached (eg. the Commercial or Digital and Technology controls)
Internal Governance
Consultancy contracts should be approved by the spending organisation’s Minister (for government departments) or Accounting Officer/Chief Executive Officer for other central government bodies, including any options for extensions.
Internal approval processes should:
- be in line with guidance set out in the Consultancy Playbook on how to commission and engage with consultants more effectively, achieving better outcomes, better value for money and improved Civil Service capability through the transfer of knowledge and skills.
- ensure that spending on C&PS is in line with your organisation’s workforce strategy for how it plans to use permanent staff rather than consultants and professional services where this is possible and represents value.
- include consideration of whether there is a suitable Crown Commercial Service (CCS) framework agreement, which provides an efficient route to market whilst allowing users to reduce cost, mitigate risk and maintain delivery assurance. CCS has a range of frameworks for consultancy, including but not limited to: Management Consultancy Framework MCF3. If there are other frameworks your organisation uses, eg. for recruitment of sector specialists, which are more relevant to the context of the contract, these should be identified.
Contact cabinetofficecontrols@cabinetoffice.gov.uk for further information or to discuss any issues you have in applying this spending control.
Last updated 1 February 2023 + show all updates
-
Spending reform: 21 Dec 2022 _Ministers MCO and CST letter to departments on Spending Controls Reform refers. This spend control is being discontinued effective 31st January 2023 in line with the agreed lifting of burdens / realignment of focus and impact of Cabinet Office Spend Controls. Following Workshops during January on an operational level the Removal of the controls is welcomed. Higher level contracts >£20M are still covered in other Controls ( Commercial / Digital/ CL etc) Operationally for ease of reference for F/ Y end Audit where reliance was placed on these controls the detail of the control will remain on GOV. UK for a further two months.
-
Guidance updated to support a new version of the consultancy and professional services spend control submission portal.
-
The implementation period of the control is live from 01 October 2021. Guidance has been amended to reflect disclosure requirements, thresholds and interim processes.
-
Paragraph 2 - guidance on the requirement to submit consultancy and professional services spend data to Cabinet Office added.
-
Whole page and all attachments updated.
-
Updated to include the new threshold for consultancy spend controls.
-
First published.