Consultancy Value Programme

OGC has announced that Central Government spend on consultancy has decreased by 31% over three years, from 2005/6 to 2007/8. The 31% decrease is against the spend figure published by the NAO in their 2006 report, Central Government's Use of Consultants.  The figures are based on spend data gathered from 16 Central Government Departments audited by the NAO in 2006, and have been obtained using the same methodology used by the NAO in compiling their report.

This data collection exercise has been carried out by OGC as part of the Consultancy Value Programme and demonstrates that the programme is assisting departments in driving greater value from Government's use of consultants.

How much does Government spend on Consultancy?

The table below sets out the 2007/8 spend by the 16 largest spending departments.

Department	NAO 2005/6 (£m)	2007/8 (£m)	%variance 2005/6 - 2007/8
BIS	54	22	-59%
CLG	36	35	-3%
CO	51	19	-63%
DCMS	1	1	0%
DCSF	22	61	177%
DEFRA	160	37	-77%
DFID	255	21	-92%
DFT	60	58	-3%
DH	126	132	5%
DWP	76	33	-57%
FCO	22	30	36%
HMRC	106	59	-44%
HMT	6	6	0%
HO	138	96	-30%
MOD	213	107	-50%
MOJ	24	56	133%
Total	1,350	773	-43%

Calculation for total Central Government (using NAO methodology)

1,583

909

-43%

Calculation for total Central Government, excl. DFID (using NAO methodology)

1,276

884

-31%

  Notes on figures:

• All numbers rounded to nearest £million.
• Consultancy spend figures are for the core department only to provide a comparator to the NAO 2006 report figures.
• The calculation for a total Central Government spend figure is the same as that used by NAO in their 2006 report (details available in the NAO methodology paper from 2006).
• To align DFID with other government departments, the consultancy figure for 2007/08 reflects spend on services provided direct to DFID. This now excludes expenditure on behalf of and for the benefit of developing countries. As this change significantly reduces DFID's spend figure, a separate calculation has been provided for 2007/8 to remove any distortion in overall reporting. DFID's future reporting of expenditure will also reflect the re-classification of expenditure to align with the Central Government definition of consultancy.
• The £1.8bn total figure reported by NAO was based on spend in the above departments, plus some larger agencies (full details are available in the NAO methodology paper from 2006). If indicative 2007/8 spend from these agencies is included in the calculation the estimated total Central Government 2007/8 consultancy spend figure is £1.1bn. 
• Some of the % variance is the result of machinery of government changes which have occurred since 2005/6, for example MOJ.
  
  

What is CVP?

The Consultancy Value Programme (CVP) sets out requirements on departments to harness value from consultancy spend. It includes all the central government departments with significant consultancy spend, working together to agree best practice and approach.

The Programme provides a structured and co-ordinated way of managing departments' use of consultants, and comprises a series of practical toolkits and solutions for procurement professionals to draw on when considering the use of consultants.

Why CVP?

Consultancy support has proven central to the successful delivery of many Government projects where no internal resource is available - however procurement in this area can be difficult and complex and it is essential that Government gets this right to ensure consultancy spend is accountable, appropriate and cost effective.

OGC, working in collaboration with government departments, is driving forward a new initiative aimed at strengthening measures to ensure value for money for public sector spend on consultants.

What does CVP comprise?

• A business case format of essential considerations Departments will have to use when taking on consultants:

Used across Government this will provide a consistent approach to consultancy procurement and improved assurance for its successful delivery. The format enables identification, delivery and measurement of value through the consultancy engagement.

• A revised and consistent definition of consultancy;

Enables right identification of your service requirement - and appropriate selection of the service providers. It will be important to ensure that government has a much better understanding of market structure and segmentation and uses that knowledge to improve the value which is delivered through engagement of the market.

• 'Gate' & Governance

Using a 'Gate' process as part of business case approval to encourage joined up working between commercial/ procurement, HR, finance & business units to deliver vfm from consultancy spend and demand management at source

• Pricing

Improving the visibility of consultancy pricing and the components that dictate price will enable departments to be better informed of the price they should expect to be offered.

• Consultancy Performance Reviews

A standard consultancy performance review will enable departments to identify and capture the value delivered from consultancy assignments.

A common approach to consultancy performance review will also enable departments to share knowledge and experience in order to support better decision making, and to take a collaborative strategic approach to supplier management enabling Government to act as a single customer.

• Training courses

For procurement professionals and commissioners of consultancy assignments in order to develop best practice for buying consultancy services.

How to engage with CVP

The essential elements of the Programme are included here for download.  We suggest you consult with your Departmental CVP co-ordinator as a first step in any project where you anticipate consultancy support.  

CVP team and contact details

For information please email: CVP@ogc.gsi.gov.uk

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