Day rates over £750 to require ministerial sign-off in new Cabinet Office contractor controls

Written by Richard Johnstone and Sam Trendall on 4 July 2019 in News

Permanent secretary John Manzoni reveals new policy

Credit: PA

Cabinet Office permanent secretary John Manzoni has revealed that new restrictions on the use of contractors in the department have been introduced, including a requirement for ministerial approval of any temporary staff employed on rates of £750 or more a day.

In a letter to Public Administration and Constitutional Affairs Committee chair Bernard Jenkin, Manzoni revealed that ministers had decided to introduce new controls following “a recent internal audit” of their use. This follows the revelation last year that the department had 13 contractors who receive at least £1,000 a day, nearly double the number in any other department.

Day rates in excess of the £750 threshold are fairly common among tech contractors. In the ‘digital specialists’ section of the Digital Marketplace, there are currently five notices where the public body in question has specified a maximum day rate for the specialist help they are seeking. For three of these, the figure is £750 or above.

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Manzoni, who is also chief executive of the civil service, said that there was “already a cross-government requirement for departments to publish information on numbers and spend on contractors and temporary staff in departmental annual report and accounts”.

He said the roles contractors are brought in to perform “are often highly specialised, where we have been unable to source the requisite skills and knowledge within the civil service” and “as such the costs involved reflect market value”.

But addressing a query from Jenkin about the department's use of temporary and interim staff, Manzoni revealed that the additional controls were being implemented under a plan developed by the Cabinet Office’s HR department to ensure the right approvals were in place to ensure value for money.

“From July 2019, ministers have decided to introduce an enhanced approvals process,” he said. Any business cases with day rates of £750 or more, or involving consultants working for more than 18 months, will require sign-off by Cabinet Office minister Chloe Smith. Plans to use consultants with a rate between £500 and £750 a day, or with a duration of between 12 and 18 months, will need Manzoni’s approval as Cabinet Office accounting officer, while day rates of less than £500 or a contract for less than 12 months will still need to be approved by a Cabinet Office head of unit.

Figures published last July showed the central department had more than twice the number of contractors paid at least £1,000 a day of any other department. The Department for Transport and the Department for Work and Pensions both had six.

Setting out the figures in a written answer to Conservative MP Philip Davies, Cabinet Office minister Oliver Dowden said at the time that the Cabinet Office used contingent labour to supply specialist skills and capability not readily available within the civil service.

“Out of these, nine are deployed to work on departmental transformation projects in other government departments; three have been engaged for 1-2 months; and one has been engaged for 14 months,” he said.



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