Contingent Labour Spend Control
Follow this guidance to ensure approval requirements are met for all contingent labour spend with day rates of £750 and above, or 12 months duration or longer.
Documents
Details
This guidance sets out:
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the Policy for Cabinet Office’s Contingent Labour (CL) spending control.
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the types of labour covered by the CL control and how these differ from the separate spending control covering Consultancy and Professional Service (C&PS) contracts.
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for individual CL recruitment, the day rates and duration thresholds above which the CL control applies, and who has the authority to approve contracts above each threshold.
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for bulk recruitment campaigns, the threshold above which Cabinet Office approval must be sought.
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the interim process in place from 1st November 2021 for submitting data to the Cabinet Office and approving spending under the control, before the control is fully rolled out in 2022.
This guidance will expire on 31st December, to be replaced by final guidance of the finalised control arrangements published on gov.uk.
Policy summary
The purpose of this control is to ensure that CL contracts meet relevant commercial and human resources standards and are not used where better value alternatives are available. It does this by ensuring that there is a justifiable need for CL, they are engaged, used and managed cost effectively, and adequate arrangements are made to recruit permanent or fixed term staff (if the requirement is longer term and this would achieve better value for money) in the meantime.
What is in scope of this spend control?
This control covers central government organisations’ spending on CL. This is non-civil service temporary labour - contractors, agency workers and temps - who will often, but not always, be recruited to undertake work in a BAU environment (see Annex 2 for guidance on determining BAU). These contracts will generally pay on a time-based rate rather than delivery of an output or outcome.
The following is out of scope of this control:
- consultancy: This is defined as the purchase of advice to fill a knowledge gap. This can include identification of options and recommendations, or assisting with implementing solutions, but should not be business as usual (BAU), therefore will be time-limited. Consultancy advice may relate to strategy, structure, management or operations of an organisation. Consultants should only be engaged where in-house skills are not available.
- professional Services: These types of services seek to fill gaps to assist the procuring organisation to deliver or implement an operational service. As such professional services should not be purely (or mostly) advisory.
- secondments of workers from other organisations
- contingent labour contributing towards construction of a capital asset
Spend control threshold
All CL contracts with day rates of £750 or over or durations of 12 months or over are within the scope of the spending control. CL contracts that have been extended such that their total duration triggers the 12 month threshold are also in scope of the control. In all cases, day rates should include agency fees (excluding recoverable VAT, as the proceeds go to government, with no additional cost to the exchequer)
In addition, bulk recruitment campaigns (recruiting more than one person in a single campaign), with total costs of £500k (excluding recoverable VAT but including any fees) or over are in the scope of the control. Note: where you have received internal approvals for dissimilar roles batched together these do not count as bulk recruitments, so are outside the scope of the bulk CL recruitment element of the control.
All spending in the scope of the CL control should be disclosed to the Cabinet office using the online portal accessible at: https://cpsp.mendixcloud.com/p/CL
Interim spend control approval process
From 1st November all central government bodies should enter data on CL spending within scope of the control (at the above thresholds) on to the online portal linked in paragraph above. Cabinet Office will be operating interim arrangements for this spending control from this date. During this phase, our principles will be to adopt a light touch approvals process to avoid causing delays to organisations’ spending except where doing so adds value to their plans. Over the interim period we will develop a high quality approvals process.
From the start of the interim period (1st November) central government organisations will be required to secure Cabinet Office’s approval for all CL contracts for individual people with day rates of £1k (excluding recoverable VAT) or over, or durations of 18 months or over. For CL working in junior roles at Civil Service grade Executive Officer or equivalent who trigger the 12 - 18 month duration thresholds, we will generally approve spend without detailed assurance (but may dip sample cases and identify those with particularly long tenures for further scrutiny). Bulk recruitments with total costs of £500k (excluding recoverable VAT) or more should also be referred.
Although ministerial (or AO if there is no minister) approval will be required for CL contracts triggering the £750 day rate or 12 month duration, organisations are encouraged to develop and implement their own internal processes to achieve this as efficiently as possible (eg. cases for ministerial approval / AO could be batched with a recommendation from a senior official, approvals board or other equivalent body for final ministerial / AO approval).
Using the online portal
Submitting data / requesting approval
You do not need to submit data on CL contracts with day rates below £1k and less than 18 months duration which have been filled via Public Sector Resourcing. For all other CL contracts, you should submit data to the Cabinet Office using the online portal: https://cpsp.mendixcloud.com/p/CL. The online portal will ask you to provide information listed in Annex 1. The portal allows you to attach relevant documents (eg. a business case) to your approval request, and refer to this in several data fields rather than rekeying information.
Once you have entered the required information, you will be issued with a case reference and access code. This will enable you to check on your case’s progress and update information as required. If your case requires Cabinet Office approval (triggering the £1k day rate or 18 month contract duration for individual recruitments, or the £500k total cost for bulk recruitments) under the light touch interim arrangements you will receive approval confirmation within five working days.
Urgent cases
In exceptional cases, where you require an urgent spending approval decision from Cabinet Office, the five working day turnaround can be reduced. You should identify such cases by ticking the ‘urgent’ box. This will prompt you to provide a justification for the timescale. Acceptable justifications include:
- there is a need to recruit CL to address a critical delivery requirement, to urgently address an imminent risk to safety, a critical incident or a political imperative (previous examples of critical incidents include Covid-19 and Brexit procurements).
- not recruiting CL urgently would lead the organisation to suffer a financial loss or penalty.
- you will also be required to provide an explanation for why the need for CL was not identified sooner to allow for the normal five day turnaround. If your organisation has required urgent turnaround of cases in the last year, this should also be stated.
In exceptional circumstances (for example the rare scenario where urgency prevents time-critical, unanticipated spend from being approved in the normal fashion) a request for retrospective approval may be considered by Cabinet Office. You should contact the team at the email address below should you wish to seek retrospective approval.
Contact for further information
Please contact cabinetofficecontrols@cabinetoffice.gov.uk for further information or to discuss any issues you have in applying this spending control.