Cabinet Office controls policy: version 6

Central government organisations, including departments and the bodies they sponsor, must obtain Cabinet Office approval when they want to spend money on specified activities. Cabinet Office Spend Controls are part of the wider government financial delegations and approvals process set out in Managing Public Money and an important part of the mandate of the government functions. The Cabinet Office operates the Spend Controls on behalf of HM Treasury.

Objectives and benefits

Cabinet Office Spend Controls provide third-line, independent assurance for significant and complex areas of spending. As such, they:

• enable government to operate in a much more holistic and joined-up way – the Spend Controls promote the reuse of technology; interoperability; common terms and conditions; and efficient and collaborative asset utilisation.
• highlight patterns or duplicated spend within and between organisations – the Spend Controls build visibility of spending in particular categories, generating insight.
• support the implementation of government policies and strategies (for example, the government estates and shared services strategies), and adherence to functional and other standards.
• target expertise and additional assurance at complex and risky areas of spend – the Spend Controls improve spending proposals and ensure alignment with government priorities.
• identify issues which, while outside the scope of functional assurance, could point to the need for HM Treasury approval (for example, proposals that are novel, contentious or repercussive).

Spend Controls benefit organisations and the government as a whole – they help to deliver savings and efficiencies, increase delivery confidence, reduce risk, support capability improvements and help ensure improved outcomes for citizens.

Scope of the Spending Controls

Organisations in scope of the Spend Controls

All central government organisations, including departments and the bodies they sponsor, must obtain approval from the Cabinet Office when they want to spend money on specified activities. New organisations are expected to comply with the Spend Controls unless specifically exempted when set up.

The Office of National Statistics (ONS) public sector classification is used to determine which organisations are categorised as central government. This includes: all central government departments, including non-ministerial departments; executive agencies; and other arms-length, non-market bodies that are majority controlled and/or financed by departments (non-departmental public bodies).

To find out whether an organisation is classified as central government, please refer to the Office for National Statistics public sector classification guide.

Organisations outside of central government may, exceptionally, be subject to Spend Controls if this is specified in relevant legislation, the memorandum and articles of association or other documents that form part of the organisation’s constitution, or in a relevant contract or grant agreement.

If in doubt and for further guidance, contact the Cabinet Office’s Central Controls team: cabinetofficecontrols@cabinetoffice.gov.uk

Organisations out of scope of the Spend Controls

All organisations not classified as central government are outside the scope of the Spend Controls (subject to the above exceptions). This includes private sector organisations, devolved administrations, public corporations (public sector market bodies) and local government bodies.

Expenditure covered by the Spend Controls

The Spend Controls apply to commercial contracts, general grants and certain other types of expenditure. A summary of the types of expenditure (‘specified activities’) covered by the controls can be found below

They do not apply to paybill and staff costs, budget transfers, recharge arrangements, grants in aid or formula grants (with the exception of providing data via the grants pipeline). These may however be subject to wider spend controls operated by HM Treasury.

Exemptions from Spend Controls

There is a presumption that all central government organisations are subject to all of the Spend Controls (unless specifically excluded at formation, e.g. through the founding legislation). In exceptional circumstances, exemptions may be granted to specific organisations within scope in respect of some or all of the Spend Controls. Your organisation may request an exemption from the Spend Controls from the Cabinet Office. Such requests will be considered on a case-by-case basis and must be approved by Cabinet Office and Treasury ministers.

Agreements of any exemptions a body holds from the Spend Controls should be recorded in the department’s delegation letter and in the Framework Document, or similar relationship-defining document, between the body and its sponsor department. Where the Framework Document is silent, it should be assumed that all of the Spend Controls apply.

Exemptions will be reviewed regularly, either: at a date specified in the letter granting the exemption; when the status of the body changes; when the framework document is reviewed and updated; as part of the department’s review of ALBs; or where issues are identified that suggest shortcomings in internal controls.

Annex A ‘Exemptions from Spend Controls’ sets out factors considered when granting exemptions and the engagement an organisation must make to request an exemption.

Triggers

The Spend Controls are triggered at defined thresholds and approval points.

Thresholds

For expenditure within the scope of Spend Controls, you must request approval where: the relevant financial threshold is reached; or where other thresholds apply (for example, the duration of the contracted spend).

The threshold level varies depending on the expenditure category, complexity and specific agreements with individual organisations. If in doubt, assume that the default thresholds set out at types of spend in scope apply.

Financial thresholds

The financial threshold relates to the relevant contract or transaction. It does not relate to total project or programme expenditure, which will include other costs and cost categories.

The threshold value may relate to aggregate spending eg. where contracts are changed or extended (see types of spend in scope for the policy for the relevant spending category).

The default thresholds above which approval to spend is required are set out under types of spend in scope. Your department’s or organisation’s delegation letter will tell you whether bespoke arrangements have been made with your department or organisation (ie. whether the threshold is higher or lower than set out under types of spend in scope).

It is your organisation’s responsibility to ensure that all spending within scope of the control is submitted for approval. If in doubt, assume the spending is subject to control or contact the Cabinet Office Spend Controls team at cabinetofficecontrols@cabinetoffice.gov.uk for further information.

Duration thresholds

The duration threshold (the duration of the contract) only applies to certain Spend Controls ie. consultancy and professional services, and contingent labour.

Where both a financial and duration threshold apply, you should request approval if either or both thresholds are reached i.e. even if the proposed spend is below the financial threshold, the control requirement will be triggered if the duration threshold is reached.

Bespoke thresholds

The default position is that the financial thresholds set out under types of spend in scope apply to all central government organisations. This ensures a level of simplicity and fairness. However, different thresholds may be agreed with individual organisations where appropriate.

Factors that will be considered include: assessments of capability and adherence to standards; the size and scale of spending activity; compliance of the organisation with Spend Controls; and any exceptional circumstances such as bodies set up to respond to specific events or emergencies. Consideration of different thresholds will be at the Cabinet Office’s discretion, and usually given at the point an organisation becomes subject to controls or where there is clear evidence that current thresholds are no longer appropriate. These changes will need to be agreed with the Cabinet Office and HM Treasury.

Annex B ‘Thresholds Policy’ sets out in greater detail the circumstances in which a bespoke threshold may be agreed and the process for updating an organisation’s thresholds.

Approval points

Approval point timing

The Cabinet Office does not direct organisations on what to commit expenditure on and when, however it can advise organisations on how they can and cannot commit expenditure. Spend approval is required in real time, before procurement or equivalent activity commences and before spending is committed (usually at the Outline Business Case and Full Business Case (OBC and FBC) stages).

Organisations or ALBs should engage with the Cabinet Office as early as possible – ideally well before the OBC and FBC stages. Early review and assurance means there is a greater opportunity for functional experts to add value, resolve issues early, and avoid delays in approval.

Early engagement should be undertaken through forward looking spending pipelines, and may be supported by a Strategic Outline Business Case or Programme Business Case. Where assurance is undertaken as part of the pipeline approach, the Cabinet Office will decide whether approval is required at the point that spend is committed.

Joint approvals

Where proposed spending would trigger more than one spend control, organisations should alert all the relevant Cabinet Office functional assurance teams. The functions should then liaise with each other and the central controls team to ensure that each control is considered. Approval to spend should not be granted until the case is approved explicitly under all relevant controls.

Expectations and principles

Organisations subject to Spending Controls

All central government organisations are expected to comply with the letter and the spirit of spending control policies and procedures. The following expectations and principles apply to organisations subject to the Spending Controls:

Expectations

• Pipelines – Organisations must develop and maintain spending pipelines covering planned expenditure for the following 15 months (minimum). This is a requirement for commercial, digital and technology, grants, facilities management and property activities and good practice in other areas.
• Internal assurance and approval – Organisations must ensure robust internal assurance and approval processes for spending activities.
• Standards – Organisations must use functional standards to ensure clear accountability, sufficient capability and expected practices support the development of spending proposals: https://www.gov.uk/government/collections/functional-standards.
• Real-time controls – Organisations must ensure timely engagement with the centre to ensure that controls apply in real time, before spend is committed.

Principles

• If in doubt, assume controls apply – All central government organisations are considered to be in scope of all Spending Controls unless a specific exemption is granted by the Cabinet Office. If in doubt, or where emergency procedures apply, organisations should assume Controls apply and engage with the central teams. Contact details can be found at the bottom of this guidance.
• Transparency – Organisations should share all relevant information, and meet requirements to publish transparency data.
• Early engagement – organisations should engage with central Cabinet Office functional teams early – as strategy is being developed and well before spend is committed. Contact details can be found under key contacts.
• Accountability – Accounting Officers remain accountable for spending in their organisation and for ensuring compliance with Cabinet Office spending control requirements.
• Organisations should be open and transparent when providing the Cabinet Office with evidence and data to support their approval request. Not disclosing the full nature or necessary details of the requirement could: result in delay as further information is requested; hinder the outcome of the request; and / or increase the number of conditions attached to the approval.

Cabinet Office

Cabinet Office teams should:

• SLAs – publicise and meet ‘service level agreements’ to ensure timely assurance and approval processes.
• Proportionality – ensure that Spending Controls are applied in a proportionate way and support the use of existing organisational approval processes
• Join-up – ensure that central assurance and approval processes are joined up where multiple controls are triggered.
• Urgency – at the outset of a crisis, Cabinet Office and HM Treasury should consider adjustments to control requirements, potentially including an appropriate level of flexibility on thresholds, and / or tighter timetables for approvals.

Compliance, breaches, retrospective approvals and transparency

Compliance

The Spend Controls are part of HMT’s scheme of financial delegations, so non-compliance with the letter or spirit of Spend Controls and / or failure to meet expected standards may result in additional approval requirements (for example a reduction in Spend Control thresholds), and / or sanctions. Conversely, where organisations consistently meet or exceed required standards and demonstrate strong governance and capability in an area of spending covered by a control, they may earn greater autonomy from the requirements to seek Cabinet Office’s approval (for a defined period and / or until leadership in the organisation’s functional area changes).

Pipelines are mandatory for Commercial, Grants, Property, Facilities Management and Digital and Technology spending. The effective operation of these pipelines is necessary for compliance with the Spend Controls. Other spending must follow the early engagement process set out on each control’s guidance page on gov.uk.

Annex C ‘Expectations and Compliance’ sets out in greater detail the expectations for organisations as part of the controls framework and lists behaviours that may result in additional oversight or compliance measures.

A transaction undertaken by a government organisation that is itself exempt from the Spend Controls but done on behalf of an organisation that is in scope of those controls, may be subject to Spend Control. For example, a property transaction where an exempt organisation takes a leasehold or freehold interest in a property for the purpose of providing accommodation for an in-scope government occupier will be subject to the property control. In addition, the requirement for Cabinet Office Spend Control approval may be a condition of a relevant grant agreement or contract.

Breaches of Spend Controls

Failure to gain the necessary Cabinet Office Spend Control approval, or failure to meet the conditions set for approval, means that spending is outside an organisation’s delegated authority and therefore irregular (see Managing Public Money sections A2.2.8 and A2.2.14-18). Similarly, any resources committed or expenditure incurred in breach of a condition attached to Cabinet Office Spend Control approval is irregular.

Spend control breaches must be brought to the attention of the Cabinet Office and your HM Treasury spending team as soon as possible. For bodies sponsored by departments, breaches should be referred to the Cabinet Office and HM Treasury via your sponsoring department. Retrospective approval of spending subject to Cabinet Office Spend Controls will only be provided in exceptional circumstances. Where retrospective approval is not given, the organisation must inform the NAO and follow the guidance set out in Managing Public Money.

Breaches of controls and failure to report such breaches may also result in sanctions or changes to delegated thresholds above which organisations are required to seek Cabinet Office approval for spending (see below).

Annex D ‘Breaches of spend controls’ sets out in greater detail actions an organisation must take if they breach Spend Controls and how the Cabinet Office can be expected to respond to a breach of the Spend Controls.

Retrospective approval

The Cabinet Office will not generally consider requests for retrospective approvals. 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. Handling should be agreed with the relevant functional and central controls teams at cabinetofficecontrols@cabinetoffice.gov.uk when the spend control breach is identified.

Transparency

Departments and organisations are responsible for publishing quarterly data summaries of spending proposals approved through Cabinet Office Spend Controls.

Approved expenditure requests should have the case name, amount of spending approved and date of approval published each quarter. For more information on this requirement please contact cabinetofficecontrols@cabinetoffice.gov.uk.

No information at or above an OFFICIAL – SENSITIVE classification should be submitted as part of your approval request or published.

Types of spend in scope of the Spend Controls, and thresholds

The expenditure categories (‘specified activities’) that are subject to Spend Controls are as follows (all thresholds are exclusive of recoverable VAT).

• Advertising, Marketing and Communications
• Commercial
• Digital and Technology
• Consultancy and Professional Services (C&PS)
• External recruitment: Contingent Labour
• National Property Control
• Facilities Management (FM)
• Redundancy and Compensation
• Learning and Development

Advertising, Marketing and Communications

• Summary: Organisations must submit requests for advertising, marketing and communications (AMC) spending for professional assurance. Before the beginning of the financial year, organisations must submit initial short business cases for major campaigns and programmes of communications with a projected total spend of £100,000 or more during the next financial year as part of the Communication Single Budget (CSB) process.
• Threshold: £100,000 or more (this applies to total campaign spend even where the individual proposal is less than the approval limit). Any campaign spend under £100k also needs to be shared with Cabinet Office for approval by Number 10.
• Timing: Proposals should be submitted at least 21 days before a decision is required. The 21-day turnaround should be factored into your planning to meet any internal or campaign delivery deadlines.
• Links:
  https://www.gov.uk/guidance/advertising-marketing-and-communications-spend-controls and
  https://gcs.civilservice.gov.uk/guidance/marketing/delivering-government-campaigns/professional-assurance/

Commercial

• Summary: The Commercial Operating Standards require organisations to create a commercial pipeline to record future commercial spend activity above approval limits, looking ahead at least 18 months and up to 3 years. Based on an assessment of risk and complexity, assurance on selected items from the pipeline may be delegated to organisations. Where activities recorded on the pipeline are subject to formal control approval, or for items not included on a commercial pipeline, you should follow commercial controls guidance.
• Threshold: All future commercial spend activity, framework agreements or material changes to services worth £10 million or more are subject to commercial controls. Some organisations have different control limits which are communicated by settlement letters.
• Timing: Pipelines should be kept up to date and reviewed regularly. Formal spending control approval should be requested at the procurement (Outline Business Case) and contract award (Full Business Case) stages at least 28 calendar days before a decision is required.
• Links: https://www.gov.uk/guidance/commercial-spend-controls-version-5

Digital and Technology

• Summary: Departments should record all existing and planned digital spend in a digital and technology pipeline, looking ahead at least 15 months. This should also include any novel or contentious digital and technology spend, regardless of value. The pipeline should be updated regularly as part of the joint assurance review process. Where activities recorded on the pipeline are subject to formal control approval, or in circumstances where your organisation has not transitioned to the digital and technology pipeline, you should follow Digital, Data and Technology controls guidance (version 4).
• Threshold: The control applies to digital spend over £100,000 and technology spend over £1 million. Departments must ensure all digital and technology spend, regardless of value, is included on their pipelines.
• Timing: A 28-day service level agreement applies.
• Links:
  https://www.gov.uk/guidance/digital-and-technology-spend-controls-version-5 and
  https://www.gov.uk/guidance/digital-and-technology-spend-controls-non-pipeline-process-version-4

Consultancy and Professional Services (C&PS)

External recruitment: Contingent Labour

• Summary: Organisations procuring contingent labour must seek approval internally or from Cabinet Office (via the online portal below) according to the thresholds below.
• Approval thresholds: From 1st November 2021 Contingent Labour (CL) contracts with day rates of £750 or over or durations of 12 months or over must be approved by a departmental minister (or Accounting Officer for organisations with no minister). For contracts with day rates of £1000 or over or durations of 18 months of over, organisations must also receive Cabinet Office’s approval. In addition, bulk recruitment campaigns (recruiting more than one person in a single campaign), with total costs of £500k or over are in the scope of the spending control must be approved by the Cabinet Office. (All amounts above should be excluding VAT but including any fees).
• Timing: Disclosures of contracts should be made to the Cabinet Office (via the CL portal case management system) as soon as possible after you have received internal approval from your organisation.
• Links: https://www.gov.uk/guidance/contingent-labour-spend-control and https://cpsp.mendixcloud.com/p/CL

National Property Control (NPC)

• Summary: Government organisations shall develop a Property Event Pipeline in line with the published standards and guidance. The pipeline should represent a forward look of all property transaction event activity in scope of the NPC. Organisations shall submit a control request for property acquisitions (freehold, leasehold or licences) and to continue tenancy (non-exercise of breaks, extension or renewal of leases).
• Threshold: Expenditure over £100,000 for the duration of the commitment (freehold acquisition cost or total rental expenditure to lease expiry)
• Timing: Pipelines should be kept up to date and reviewed regularly. Organisations are advised to engage with the NPC team at the strategy development stage (at least 6 months prior to your required approval date, depending on the type, value, scale or complexity of the property approval being sought). Formal NPC approval shall be requested at least 28 calendar days before a decision is required; organisations are advised to engage much earlier than the SLA timescale to allow for the project and approval request to progress in parallel.
• Links: [https://www.gov.uk/government/publications/property-spend-controls] (https://www.gov.uk/government/publications/property-spend-controls)

Transitional Arrangements: The requirement to develop Property Event Pipelines came into effect from 1 April 2021. In recognition that it may take time to create Pipelines, transitional arrangements apply. The NPC Team will work with organisations to understand their portfolios and agree a proportionate approach to assembling their initial Pipeline.

Facilities Management (FM)

• Summary: The overarching aim and purpose of the Facilities Management (FM) Controls is: “To improve efficiency in Facilities Management through the centralised approval of all new, extended or variations to FM contracts.” Departments must submit an FM contract pipeline for all FM contracts, expiring in the next 3 years, through their yearly departmental Strategic Asset Management Plan return. .
• Threshold: FM contracts with a total value of £500k or less should be notified via the FM pipeline, these do not require formal approval. All contracts over £500,000 should seek approval via the FM Control submission form. FM contracts over £10 million will be jointly assessed by OGP and the Commercial Function (using FM and Commercial assessment criteria respectively).
• Timing: You should engage with the FM control team at the strategy development stage (approximately 6 months prior to your required approval date, subject to the complexity of the case). Formal approval should be requested at the procurement (Outline Business Case) and contract award (Full Business Case) stages. Details of contract awards should be submitted for information. A 10 working day SLA applies to cases between £500K and £10m; for cases of £10m or more a 28 day SLA applies.
• Links: https://www.gov.uk/guidance/facilities-management-spend-controls

Redundancy and Compensation

• Summary: The Cabinet Office must approve all redundancy and compensation schemes and certain individual exit arrangements made under the terms of the Civil Service Compensation Scheme.
• Thresholds: Bulk exit schemes for more than 20 staff must be approved by Cabinet Office ministers; schemes for fewer staff are approved at official level. All individual exits with a value of more than £95,000 must be approved by Cabinet Office ministers.
• Timing: Service Level agreement 25 calendar days
• Links: https://www.gov.uk/guidance/redundancy-and-compensation-spend-controls

Learning and Development

• Summary: Organisations should submit requests for generic learning and development services (new or contract extensions) outside the core curriculum, and for department-specific learning and development services above the threshold.
• Threshold: Approval is required for organisation-specific learning and development services above £10,000 (new or contract extensions).
• Timing: Applicants are not required to justify their learning request but must clearly define the learning need so the application can be directed to the appropriate supplier. Once applicants have submitted details of their requirements, they will be contacted within five working days to discuss the progression route.
• Links: https://www.gov.uk/guidance/learning-and-development-civil-service-learning-spend-controls

Additional Cabinet Office functional controls

Grants

• Summary: All relevant general grants spend activity is subject to a 3-step spend controls process for review and should be disclosed via a grants pipeline. The following are out of scope of the control, but must still be submitted via the grants pipeline for information: formula grants; grants in aid; and general grant schemes below the threshold that are not manifesto-related. Manifesto-related general grants schemes below the threshold are in scope of the control. The 3-step process is: triage of activity into 3 tiers (£10m, £100k – £10m, £100k); scrutiny from the Complex Grants Advice Panel, for eligible schemes; and approval through Functional Standard-compliant internal governance processes.
• Threshold: Level 1 General Grant Management Function (GGMF) support is generally applicable to schemes of £10m plus.
• Timing: The service level agreement is to be defined. Please contact your GGMF contact for further details.
• Links: https://www.gov.uk/government/publications/grants-standards

Counter-fraud

• Summary: Organisations should work with the Cabinet Office Counter Fraud Centre of Expertise to review commercial and grants pipeline spend activity, and assess their compliance with the government Counter Fraud Functional Standard GovS 013 and the organisation’s counter fraud strategy.
• Threshold: Organisations should always ensure significant fraud risks are addressed in line with their counter-fraud strategies. Organisations with a budget in excess of £100 million should also ensure that spend proposals are compliant with the government functional standard GovS 013: counter fraud. For spending proposals over £100 million, organisations must complete a high-level Fraud Risk Assessment and develop an action plan to deal with pre- and post-payment risks and submit this as part of their spend control approval request.
• Timing: See timing for relevant Spend Control(s).
• Links: https://www.gov.uk/government/groups/counter-fraud-standards-and-profession

Joint Cabinet Office and Treasury controls

The following pay and recruitment and retention controls operate under a separate framework to the Cabinet Office Spend Controls, but are summarised here for convenience.

• Remuneration packages for senior public officials (as defined in the guidance) at and above £150,000 must be submitted to the Cabinet Office (Workforce Team) and approved by the CST (SLA 21 calendar days) pro rata per annum and/or bonus arrangements in excess of £17,500 pro rata per annum.
• Bonus arrangements in excess of £17,500 (including in-year and end-year awards made to an individual within a performance year) must be submitted to the Cabinet Office (Workforce Team). Total end-year awards should not exceed 3.3% of the SCS paybill and should only be awarded to box 1 performers. In-year awards must be limited to a maximum of 20% of staff, with individual awards limited to £5,000 (SLA 21 calendar days).
• SCS pay on appointment exceptions must be agreed by the Permanent Secretary and the relevant Head of Profession. For Directors General roles the agreement of the DG pay committee must also be sought via the Cabinet Office (Workforce Team) (SLA 14 calendar days).
• Pivotal Role Allowances are aimed at retaining members of the SCS in highly specialised roles and those delivering the riskiest major projects across government. All pivotal role allowances need approval by the Cabinet Office Minister; the CST must also sign off proposals to pay in excess of £15,000 per annum (SLA 21 calendar days)
• Delegated pay business cases over the figure in the remit guidance require Cabinet Office minister and CST approval (SLA 25 calendar days).
• Director General appointments must always be approved by the Senior Leadership Committee. Business cases must be sent to the Cabinet Office (SLC Secretariat) (SLA 14 calendar days).

HM Treasury controls

In addition to the above controls, all expenditure requests that are above departmental delegated limits – and those which are novel, contentious and/or repercussive – must be submitted to the relevant HM Treasury spending team for approval.

Email cabinetofficecontrols@cabinetoffice.gov.uk for general questions about the spend controls policy.
For queries about specific spend controls email: