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Use of consultants and temporary staff

문서에서 Treasury Minutes Progress Report (페이지 87-91)

6: Committee of Public Accounts conclusion:

For many of its crisis interventions, the Department does not have a full understanding of how much of the taxpayer’s pound is spent by which bodies and on what.

Recommendation:

As a matter of routine, the Department should identify all the bodies involved in providing assistance, the funding each receives and the main costs incurred. It should use this information to help manage risk and identify cost-effective partners and practices.

6.1 The Government agreed with the Committee’s recommendation.

Target implementation date: December 2017.

6.2 The Department welcomes the Committee’s recognition of the importance the Department attaches to managing risk and identifying the most cost effective partners and practices for responding to crises. In line with this, the Department completed a review of four key UN agencies (the UN High Commissioner for Refugees, UNICEF, the World Food Programme and UN Office for the Coordination of Humanitarian Affairs). The review built on the outcome of the Department’s Multilateral Aid Review and makes a number of recommendations for the UN’s operations in protracted crises, including the need to improve unit cost data; ensure local, regional and international procurement options are considered when making decisions; and using benchmarking to mitigate the risk of collusion.

6.3 These are in line with commitments made by the UK and other donors, UN agencies and Red Cross agencies as part of the ‘Grand Bargain’ at the World Humanitarian Summit in May 2016.

6.4 In March 2017, the Department introduced Delivery Chain Mapping to track how funds are being used through the delivery chain, in addition to due diligence assessments – this requirement includes humanitarian assistance.

Introduction from the Committee

The main 17 Government Departments and their agencies paid permanent staff salaries totalling £17 billion in 2014–15. Departments also spent between £1.0 billion and £1.3 billion on consultants and temporary staff, who are paid as independent suppliers rather than as employees. They can fulfil anything from highly specialist roles through to providing cover during peaks in demand for less skilled work, and the approach to managing these resources needs to be tailored accordingly. Both consultants and temporary staff are sometimes used to fill gaps in the skills of the civil service.

In 2010, as part of its plan to reduce the deficit, the Government introduced a more coordinated approach to the procurement of common goods and services, including for consultants and temporary staff. A series of cross-Government contractual agreements (frameworks) are managed by the Crown Commercial Service, an agency of the Cabinet Office. The Government also introduced new spending controls which required departments to obtain ministerial approval before appointing external resources, and to inform the Cabinet Office before appointing consultants for more than 9 months.

Background resources

• NAO Report: Use of consultants and temporary staff – Session 2015-16 (HC 603)

• PAC Report: Use of consultants and temporary staff – Session 2015-16 (HC 726)

• Treasury Minutes: July 2016 (Cm 9323) Updated Government response to the Committee

There were 6 recommendations in this report. As of the last Treasury Minute (Cm 9323) 1 recommendation was implemented. 5 recommendations remained work in progress, all of which have now been implemented, as set out below.

1: Committee of Public Accounts conclusion:

Departments have not made progress with their workforce planning which means they do not know their future resource needs and will have to resort more often to using consultants and temporary staff.

Recommendation:

The Cabinet Office needs to set out clearly how it will define success in developing key skills across government. By January 2017 it should have in place realistic targets for the skills it expects to be held within specialist functions and the senior civil service by the end of this Parliament.

1.1 The Government agreed with the Committee’s recommendation.

Recommendation implemented.

1.2 The Government believes the most effective method of developing key skills is through cross-departmental functions. 10 core functions have been identified as key to transforming and increasing the performance of the Civil Service over the next 5 years.

1.3 Work has already developed in the Commercial and Digital, Data and Technology and Project Management functions to improve capability in these areas. Civil Service HR continues to support the progress of Civil Service professions. The Department has considered the correct level of HR support for each of the professions to support the development of capability plans in each function, including putting targets and more robust measures in place.

Thirty Sixth Report of Session 2015-16 Cabinet Office

Use of consultants and temporary staff

2: Committee of Public Accounts conclusion:

Departments have not made progress with their workforce planning which means they do not know their future resource needs and will have to resort more often to using consultants and temporary staff.

Recommendation:

By December 2016, all Departments should produce a strategic workforce plan that covers their entire group for the next five years, identifying expected ‘skills gaps’ and other resource needs and how they will be filled (including by consultants and temporary staff). The Cabinet Office should provide the Committee with an update, naming those Departments still lagging behind, in March 2017.

2.1 The Government agreed with the Committee’s recommendation.

Recommendation implemented.

2.2 All Departments have submitted strategic workforce plans and the Cabinet Office is working with them to continually iterate and improve their workforce plans, whilst developing the wider infrastructure to support more effective workforce planning processes.

2.3 Departments are strongest in identifying key workforce risks, skills gaps and resourcing plans to address those gaps. The Cabinet Office recognises that sometimes there are gaps in scarce skills and experiences, however, this is not unique to the Civil Service. The Cabinet Office is taking steps to address capability gaps in scarce skills particularly in commercial, project delivery and digital. Delivering the Civil Service Workforce Plan, launched in 2016, will provide the mechanisms to attract and retain specialist skills and experience.

3: Committee of Public Accounts conclusion:

The numbers of temporary staff employed by departments has been growing since 2011–12 and specialist temporary staff often cost twice as much as permanent staff. ̘

Recommendation:

By autumn 2016, all Departments should have established regular reviews of the need for temporary staff across their whole group, the time in post and the progress made in filling more of these posts with permanent staff. The Cabinet Office should cover this issue in its update to us in March 2017.

3.1 The Government agreed with the Committee’s recommendation.

Recommendation implemented.

3.2 Workforce plans, developed by Departments, all include a review of temporary staff across their whole group. To improve monitoring, and ensure usage is appropriate, the Cabinet Office, the Treasury and the Crown Commercial Service are conducting an exercise into contingent labour HR data. This is to ensure that all functions are working to the same contingent labour definitions going forward so that the Cabinet Office knows what the current position is; understands where the data is less robust; and the governance arrangements are in place within departments operating to ensure appropriate usage.

4: Committee of Public Accounts conclusion:

The Committee is not convinced that Departments are doing all they can to ensure that temporary staff pay the right tax. ̘

Recommendation:

HM Treasury should re-evaluate its guidelines to Departments in the light of Budget 2016. It should also require that Departments immediately review whether their off-payroll staff should be on PAYE and, after April 2017 that departments review the calculation of tax for a sample of any temporary staff who continue to be contracted as a company.

4.1 The Government agreed with the Committee’s recommendation.

Recommendation implemented.

4.2 As announced at Budget 2016, the off-payroll working rules (more commonly known as IR35) have been reformed for the public sector. The Treasury has reviewed its off-payroll guidance (otherwise known as the CST’s review of the tax arrangements of public sector employees in 2012) and is content that the guidance is in line with the reforms to IR35. Departments are required to comply with Treasury guidance, which will be reviewed annually.

4.3 On IR35 reforms, HMRC have worked closely with the Crown Commercial Service to produce guidance for public authorities and support them to implement changes following changes to IR35 legislation. HMRC have also issued guidance for individuals and authorities affected by the off-payroll reforms.

5: Committee of Public Accounts conclusion:

Departments use central procurement agreements for only half of consultancy and temporary staff assignments, reducing government’s ability to get the best deals.

Recommendation:

From April 2016, all Departments should use Crown Commercial Service agreements as their default option for appointing consultants and temporary staff, except in rare instances where, for example, particularly specialist skills are required and for which the business case provides a clear justification for use of other procurement routes.

5.1 The Government agreed with the Committee’s recommendation.

Recommendation implemented.

5.2 The Cabinet Office controls process seeks to ensure that all Departments obtain value for money in their consultancy and contingent labour procurements. Where Crown Commercial Service (CCS) agreements are appropriate for use and offer the best value for money, they should normally be chosen as the procurement route. In some circumstances, for example where very specialist skills are required, there may nonetheless be a strong case for Departments to use other procurement routes. The Cabinet Office is working to strengthen the current controls process for consultancy and contingent labour.

5.3 CCS is replacing the existing frameworks with new commercial vehicles that improve the buying experience for Departments, supporting their requirements based on extensive customer and supplier engagement. These new arrangements will be the preferred contracting route for Departments for appointing consultants and temporary staff across Government. The first vehicle – Management Consultancy Framework – is in the process of being put in place. The second vehicle – Public Sector Resourcing – is planned for 2018.

2: Committee of Public Accounts conclusion:

Departments have not made progress with their workforce planning which means they do not know their future resource needs and will have to resort more often to using consultants and temporary staff.

Recommendation:

By December 2016, all Departments should produce a strategic workforce plan that covers their entire group for the next five years, identifying expected ‘skills gaps’ and other resource needs and how they will be filled (including by consultants and temporary staff). The Cabinet Office should provide the Committee with an update, naming those Departments still lagging behind, in March 2017.

2.1 The Government agreed with the Committee’s recommendation.

Recommendation implemented.

2.2 All Departments have submitted strategic workforce plans and the Cabinet Office is working with them to continually iterate and improve their workforce plans, whilst developing the wider infrastructure to support more effective workforce planning processes.

2.3 Departments are strongest in identifying key workforce risks, skills gaps and resourcing plans to address those gaps. The Cabinet Office recognises that sometimes there are gaps in scarce skills and experiences, however, this is not unique to the Civil Service. The Cabinet Office is taking steps to address capability gaps in scarce skills particularly in commercial, project delivery and digital. Delivering the Civil Service Workforce Plan, launched in 2016, will provide the mechanisms to attract and retain specialist skills and experience.

3: Committee of Public Accounts conclusion:

The numbers of temporary staff employed by departments has been growing since 2011–12 and specialist temporary staff often cost twice as much as permanent staff. ̘

Recommendation:

By autumn 2016, all Departments should have established regular reviews of the need for temporary staff across their whole group, the time in post and the progress made in filling more of these posts with permanent staff. The Cabinet Office should cover this issue in its update to us in March 2017.

3.1 The Government agreed with the Committee’s recommendation.

Recommendation implemented.

3.2 Workforce plans, developed by Departments, all include a review of temporary staff across their whole group. To improve monitoring, and ensure usage is appropriate, the Cabinet Office, the Treasury and the Crown Commercial Service are conducting an exercise into contingent labour HR data. This is to ensure that all functions are working to the same contingent labour definitions going forward so that the Cabinet Office knows what the current position is; understands where the data is less robust; and the governance arrangements are in place within departments operating to ensure appropriate usage.

4: Committee of Public Accounts conclusion:

The Committee is not convinced that Departments are doing all they can to ensure that temporary staff pay the right tax. ̘

Recommendation:

HM Treasury should re-evaluate its guidelines to Departments in the light of Budget 2016. It should also require that Departments immediately review whether their off-payroll staff should be on PAYE and, after April 2017 that departments review the calculation of tax for a sample of any temporary staff who continue to be contracted as a company.

4.1 The Government agreed with the Committee’s recommendation.

Recommendation implemented.

4.2 As announced at Budget 2016, the off-payroll working rules (more commonly known as IR35) have been reformed for the public sector. The Treasury has reviewed its off-payroll guidance (otherwise known as the CST’s review of the tax arrangements of public sector employees in 2012) and is content that the guidance is in line with the reforms to IR35. Departments are required to comply with Treasury guidance, which will be reviewed annually.

4.3 On IR35 reforms, HMRC have worked closely with the Crown Commercial Service to produce guidance for public authorities and support them to implement changes following changes to IR35 legislation. HMRC have also issued guidance for individuals and authorities affected by the off-payroll reforms.

5: Committee of Public Accounts conclusion:

Departments use central procurement agreements for only half of consultancy and temporary staff assignments, reducing government’s ability to get the best deals.

Recommendation:

From April 2016, all Departments should use Crown Commercial Service agreements as their default option for appointing consultants and temporary staff, except in rare instances where, for example, particularly specialist skills are required and for which the business case provides a clear justification for use of other procurement routes.

5.1 The Government agreed with the Committee’s recommendation.

Recommendation implemented.

5.2 The Cabinet Office controls process seeks to ensure that all Departments obtain value for money in their consultancy and contingent labour procurements. Where Crown Commercial Service (CCS) agreements are appropriate for use and offer the best value for money, they should normally be chosen as the procurement route. In some circumstances, for example where very specialist skills are required, there may nonetheless be a strong case for Departments to use other procurement routes. The Cabinet Office is working to strengthen the current controls process for consultancy and contingent labour.

5.3 CCS is replacing the existing frameworks with new commercial vehicles that improve the buying experience for Departments, supporting their requirements based on extensive customer and supplier engagement. These new arrangements will be the preferred contracting route for Departments for appointing consultants and temporary staff across Government. The first vehicle – Management Consultancy Framework – is in the process of being put in place. The second vehicle – Public Sector Resourcing – is planned for 2018.

Introduction from the Committee

In 2014, the European Union budget received €143.9 billion (£116.0 billion) in contributions from 28 member states and other sources, and made €142.5 billion (£114.8 billion) in payments. The UK contribution to the EU budget, after taking into account the UK rebate of £4.9 billion, was £11.4 billion. It received £5.6 billion in public- and private-sector receipts from the EU budget, thus making the UK’s net contribution £5.7 billion. If private sector receipts are excluded, the net contribution in 2014–15 was equivalent to 1.4% of UK Government total departmental expenditure. Overall, the UK was the third-largest net contributor of all member states in 2014.

The European Court of Auditors (the external auditor of the EU) concluded that the 2014 accounts of the EU were true and fair, and that revenue was legal and regular. However, it reached an adverse opinion on the legality and regularity of payments, identifying an estimated level of error of 4.4% (above the materiality threshold of 2%—the level below which the European Court of Auditors judges that errors do not have a material significance). Payments have breached this threshold for the last 21 years. Although not an indicator of fraud, this represents money that was not used or administered in accordance with EU regulations and national rules.

Background resources

• NAO report: Financial management of the European Union budget in 2014: a briefing for the Committee of Public Accounts – Session 2015-16 (HC 799)

• PAC report: Financial management of the European Union budget in 2014 - Session 2015-16 (HC 730)

• Treasury Minutes: November 2016 (Cm 9351) Update from Treasury

Since the Committee’s report was published, the British people have voted to exit the European Union (EU). Until exit negotiations are concluded, the UK remains a full member of the EU and all the rights and obligations of EU membership remain in force. While Departments continue to receive EU receipts, they will seek maximum value for money from these receipts through efficient implementation, meeting EU standards for financial management and closely monitoring flows of money from the EU.

Following the referendum, the UK will not have the same interest as it does as an EU member in the next Multiannual Financial Framework (MFF), and the effectiveness of the EU budget after the UK’s exit from the EU. However, the Treasury has enhanced its central oversight of EU spending in the UK to ensure effective coordination across Whitehall before the UK exits the EU. The Government’s response to this report reflects the updated arrangements in Whitehall on the management of EU money.

Updated Government response to the Committee

There were 8 recommendations in this report. As of the last Treasury Minute (Cm 9351), 6 recommendations were implemented, and the Department did not accept 1 recommendation. 1 recommendation remained a work in progress, which has now been implemented, as set out below.

4: Committee of Public Accounts conclusion:

문서에서 Treasury Minutes Progress Report (페이지 87-91)