The authority to place internal requisitions, and the responsibility for raising requests for the publication of official Purchase Orders, rests with the Head of the Business Unit who may delegate this authority to Heads of Sections or other nominated budget holders within his/her Business Unit. [It is imperative that all staff involved in the procurement process understand that the Procurement Department holds sole responsibility for committing RoS funds through the publication of an official Purchase Order.] Since budgets are normally set and agreed annually, Budget Holders must ensure that acquisitions which involve the use of lease, rental or any other type of term agreement which will extend beyond the current fiscal year, must be authorised, in writing, by the Head of Procurement. It is vital that this written authorisation is sought and received before the Budget Holder authorises the requisition.

Control of procurement expenditure is part of the budgetary control process. Where authority has been delegated, accountability and responsibility must be explicitly defined and not informally understood. It should be noted that delegation of authority to others will not absolve the Business Unit Head of ultimate accountability for the proper execution of the procurement processes.

It is essential that the proper Procurement Policy and Procedures are followed and that no verbal or written commitment is made to purchase goods or services until a properly authorised and approved Purchase Order has been raised and published by the Procurement Department.

For purchases being considered with the Government Procurement Card (GPC), please refer to Section 12 of the Finance Manual.

Non-procurement staff must not sign any agreement or contract or commit RoS funds through implication or any other means to any potential supplier. Commitment of RoS funds can only authorised by the Procurement Department.

Any failure to comply may be construed as fraud and the appropriate disciplinary action taken against the offending officer. Appropriate professional guidance on general matters and those associated with procurement legislation is available from the Procurement Department.

Important - Hiring Consultants

In the case of consultancy purchases these must be approved by the appropriate levels of management:

1.    Initial discussions about appointing consultants (or any professional services) should be held with the Head of Procurement, in order to ensure compliance with the relevant and most current RoS and SG policy and procedures.

2.   If after these discussions the appointment of consultants is still considered necessary, then a business case (see Appendix D) should be made and the cost of the proposed services established.

3.    The business case and cost information must then be sent to the Deputy Keeper Legal and Corporate Services (as RoS Accountable Officer).  The Deputy Keeper Legal and Corporate Services will consider the case and where applicable put it forward along with a recommendation for the consideration of the Keeper.

4.   Following business case approval by the Deputy Keeper Legal and Corporate Services, contracts up to £10,000 can be approved by an EMT member.

5.   The Keeper will give a written decision on approval or rejection of any proposal over £10,000. 

6.   All contracts between £10,000 and £50,000 can be agreed by The Keeper.

7.   All contracts over £50,000 need to be agreed by the Cabinet Secretary Finance and Sustainable Growth.

8.   Details of all external consultancy contracts let by RoS e.g. costs and subject matter will be collated by Procurement and submitted to a central government register via Scottish Procurement Directorate.

Steps 1-7 must be followed prior to awarding any contract for the consultancy.

On completion of the consultancy assignment, the owner of the project must undertake a post project review using the template in Appendix E.

For the purposes of the approval process set out in this Manual, external consultancy is defined as follows:

DEFINITION OF CONSULTANCY

"Investigating problems, providing analysis or advice, or assisting with the development of new systems, new structures or new capabilities within RoS"

(Cabinet Office Definition of Consultancy 1994)

This definition focuses on the use of "management" consultants rather than the routine procurement of particular professional/technical services or research. It excludes a raft of areas where considerable government expenditure should be supported by careful governance and auditable management and has limited the opportunity to optimise use of Government resources. 

To ensure best practice, the original definition of consultancy used in the Scottish Government has now been expanded to include a wide range of professional services which are subject to similar risks and for which spend has to be particularly carefully managed, (See Table 1).  In addition to management consultancy, the expanded definition includes IT consultancy, financial consultancy, construction or infrastructure related consultancy, research and evaluation, and policy development (including feasibility studies).  It is important to note that definitions are applied to the services being procured, not the label of the supplier or person providing them.

A number of the categories listed in Table 1 fall outwith consultancy, (and are clearly labelled as such). They also constitute areas of high spend and must be subject to sound management controls and as such are subject to the same RoS internal control and approval process as applies to consultancy.

There is a distinction between wider external resource definition and the sub section of that which constitutes ‘consultancy’.  Elements of HR work will come under the definition of consultancy whilst others better fit under separate HR related services or specialist advice.

Consultancy does not include staff substitutions, (i.e. the use of ‘’consultants’’ to perform tasks for which skills and resources are not available internally) or ‘’contracted services’’ (i.e. the purchase of clearly defined and essentially routine services from an external provider). For example, although a ‘’consultant’’ might be engaged to undertake a specific IT project (e.g. software development and implementation of an e-HR system) this would not fall within the current definition, whereas engaging a consultant to review ‘’ RoS IT strategy and make recommendations with regard to adopting an e-HR system’’ would. If in doubt contact the Procurement Department for further advice on interpreting the use of consultants. For further information on SG guidance relating to the use of consultants please click here.

The scope of this section relates to those areas identified as ‘Consultancy’. 

Accountability for the use of consultants rests with The Keeper. Compliance will be monitored in the Certificate of Assurance and adherence to processes monitored in the Certificates of Assurance are subject to audit.

Notes to Table 1

• Please use Table 1 in conjunction with the three part test below.
• Feasibility studies and Impact Assessments are purchased widely by the Scottish public sector across all areas of external resource.
• Table 1 does not provide an exhaustive list of what may be considered ‘external resource’ or ‘consultancy’.  The need for careful consideration of purchases in all areas, (listed or otherwise) is undiminished.
• CGCoPE or NCoPE already have, or plan, framework contracts in many of the areas listed above. Where no Scottish solution is in place, there may be an accessibleUKframework. 

The Three Part Test

Consultancy is project-based with responsibility for the final outcome resting with the client. 

A three part test for consultancy requires that the following three conditions should be met to be true consultancy:

1. Throughout the engagement, there must be ongoing two-way exchange of intellectual or professional information between the purchasing authority and a professional supplier, concerning the planning and/or delivery of project or organisational goals.

2. The engagement and the need for the engagement end at the completion of an agreed output rather than the end of a pre-determined length of time (subject to desired project timescales).

3. Day-to-day task management remains with the supplier.

For example:

• A land surveyor is not a consultant because in performing their task, information flow is not two-way and not ongoing (i.e. following the surveyor’s appointment, the survey is performed and a report produced without the need for further discourse). This might be defined as a Technical or Expert Service.
• A middle-level manager employed on a temporary contract would not be a consultant, as the engagement is likely to be underwritten by a time-defined contract of employment rather than an agreed output. This is an example of Interim Management or Temping.
• A Facilities Manager, employed by a Facilities Management supplier, would not be a consultant, as there will still be a requirement for the role to be filled (the relationship) after the current contract has expired. This is an example of Outsourcing.
• However, an external resource or advisor brought in to undertake a feasibility and scoping exercise to help evaluate proposed policy would meet all three conditions. This is an example of Consultancy.

To ensure value for money, business areas must be prudent in their use of consultants and only engage external consultants where other options have been exhausted.  Information on the options for optimising use of resources is available below.

Policy

It is Scottish Government policy that consultants are only employed when:

• management is determined to take action to bring about change and demonstrate commitment to act upon the substance of the outputs;
• the work cannot be handled internally, i.e. we are sure that the required knowledge and
• expertise is not available in-house or from some other source;
• they can bring relevant new knowledge and experience which adds value to the
• Scottish Government’s business;
• the number of assignments does not exceed in-house capacity to manage them effectively;
• there is demonstrable and achievable VFM as a result of their employment; and
• all of the necessary authorities have been given.