Policy paper

Cabinet Office controls policy: version 5

Updated 26 April 2021

This was published under the 2016 to 2019 May Conservative government

This policy paper was withdrawn on

This guidance has been superseded by V6 spend controls guidance

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This publication is available at https://www.gov.uk/government/publications/cabinet-office-controls-version-5/cabinet-office-controls-policy-version-5

This policy summary outlines the Cabinet Office spend controls process and its:

  • objectives
  • benefits
  • scope
  • meaning for your organisation

1. Objectives and benefits

Central government organisations, including departments and the bodies they sponsor, must follow the Cabinet Office spend controls process when they want approval to spend money on specific activities. The Cabinet Office controls are part of the wider government approvals process set out in the managing public money guidance.

The objectives of the Cabinet Office spend controls process are to:

  • improve the cross-government approach to spending
  • improve capabilities and efficiency within government organisations, for example, commercial and technical expertise
  • increase savings by promoting reuse of technology and discouraging wasteful spending
  • support implementation of government policies

The Cabinet Office aims to achieve these objectives by implementing the following principles:

1.1 Engage early with government organisations

The Cabinet Office works collaboratively with government organisations to understand their plans as early as possible and help them make timely, effective spend and procurement decisions.

1.2 Improve spend transparency and planning

Organisations must share all planned spend relevant to the Cabinet Office controls to improve planning and transparency of spending.

1.3 Focus spend controls discussions on standards

The Cabinet Office works with organisations to apply functional standards consistently. For example, the Commercial Operating Standards are functional standards, which define how government organisations should operate when making commercial decisions.

1.4 Make sure there is spend oversight and accountability

Civil servants of an increasingly higher grade must take responsibility for approving activities as the activities move through the spend controls process.

1.5 Align controls with existing organisational processes

The Cabinet Office has developed the spend controls processes to use existing internal governance and approval routes where possible, to avoid duplication.

1.6 Provide a clear path for spend activity that does not meet standards

When your organisation has not met functional standards or where your organisation has not yet transitioned to the new process, you will use the existing commercial and digital and technology spend controls. The Cabinet Office Minister makes the final decision in these cases.

The Cabinet Office spend control processes will benefit government organisations by:

  • focusing more government expertise, time and effort on spend activities that need more oversight
  • recognising patterns or duplicated spend within and between organisations
  • helping them plan and make decisions
  • promoting government assurance that is sensible and proportionate
  • recognising and strengthening the ability of technologists to challenge decisions within organisations

2. Expenditure covered by the spend controls

The 9 categories of controls are listed in the table.

Control Scope and approval limits for whole of life contract (ex. VAT where applicable)
Advertising, marketing and communications You must submit requests for advertising, marketing and communications spend of £100,000 or more through controls.
Commercial control and dispute disclosure You must record all future commercial spend activity in a document known as a pipeline when:

- the activity is worth £10 million or more (excluding VAT)

- you plan to create framework agreements and dynamic purchasing systems where the cumulative value of spend is expected to be £10 million or more (excluding VAT)

- you make any material changes (new activities, extensions or contractual changes) to services, which result in a contract variation of £10 million or more (excluding VAT)

You do not need to record a contractual change of less than £10 million in your pipeline even when it results in the total contract value increasing to £10 million or more.

The Commercial Operating Standards require organisations to create a commercial pipeline. You should allocate time to create a pipeline.

If you have not transitioned to the commercial pipeline spend controls, you should follow commercial guidance (version 4).

Email your department contact if you are unsure which process you should use.
Digital and technology There is no threshold to the spend control pipeline and you should add all of your digital and technology projects and programmes. This lets the assurance function in your department and the Cabinet Office review any areas of low, but disproportionately complex or risky activity and allow you to spot any novel or contentious spend when you categorise activities during the triage process.

It is mandatory to assure all non-BAU spend above £100,000 for digital and £1 million for technology through your assurance boards. It is recommended that you do the same for all cases below this threshold to identify duplication, savings, reduce risk and to get a complete picture of your digital and technology spend. Your CDDO senior technology adviser will work with you to clarify if an activity is novel, contentious or Business as Usual (BAU) spend.

The pipeline must include digital and technology activity covering the next 5 quarters, and should be updated regularly as part of the joint assurance process. GDS recommends adding spend activity to the pipeline 15 months before the start of your project as good practice.

The pipeline should include all known future spend above these thresholds, even if your organisation has not secured funding source.

Email gdsapprovals@digital.cabinet-office.gov.uk if you need clarification on the digital and technology pipeline process.
Consultancy You must submit all consultancy expenditure £100,000 and over, or 3 months duration or longer to the Cabinet Office.
Property Government organisations should follow this guidance to request spend approval on leaseholds, property acquisitions and disposals.
Facilities management You must have all new and extended facilities management contracts approved, regardless of their cost.
Redundancy and compensation The Cabinet Office must approve all redundancy and compensation schemes.

HM Treasury will not approve access to any ring-fenced expenditure without Cabinet Office approval for the scheme.
External recruitment The Cabinet Office is not directly involved in recruitment approvals.

The Secretary of State is responsible for approvals in ministerial departments and in-scope non-departmental public bodies (NDPBs). Non-ministerial departments will have their chief executive approve recruitment appointments.

Departments must submit quarterly recruitment forecasts and accompanying narrative to Cabinet Office.
Learning and development (Civil Service Learning) You must submit requests for generic learning and development services (new or contract extensions) outside the core curriculum. You must also request approval for department-specific learning and development services above £10,000 (new or contract extensions).

3. Organisations in scope of the spend controls

The spend controls apply to all organisations classified as central government by the Office of National Statistics (ONS). This includes:

  • all central government departments
  • executive agencies and trading funds
  • non-market bodies that are majority controlled and/or financed by departments (both non-departmental public body and other central government bodies)
  • certain Arms-Length Bodies (ALBs)

To find out if an organisation is classified as central government, please refer to the Office for National Statistics National Accounts Sector Classification index and the annual public bodies reports from the Cabinet Office.

For any questions or concerns, please contact the Cabinet Office Public Bodies Reform team at publicbodiesreform@cabinetoffice.gov.uk.

4. Which organisations are exempt from the spend controls?

Private sector organisations, devolved administrations and public corporations (public sector market bodies) are not in scope for the spend controls. Others have been given a specific exemption. Bodies which are currently not subject to controls include:

  • public sector broadcasters
  • local NHS bodies
  • further education colleges
  • universities and academy schools

It is good practice to agree any exemptions when a new body is being planned and before it is set up. Any agreed exemptions should be recorded in the Framework Document between the body and its sponsor department.

5. Spend controls responsibilities for your organisation

Your organisation is responsible for implementing the spend controls process correctly. Use the Cabinet Office criteria to help you do this.

Follow common standards You must make sure your organisation:

- starts the spend controls process by assessing activities internally and adding them to your pipeline

- provides clear accountability for spend activity assessments

- meets any conditions set by the assurance board or joint assurance review

- fills in expenditure request templates thoroughly		  
Share spend plans with the Cabinet Office Organisations should engage with the Cabinet Office by providing pipeline records and forward looks.  
Report data on your spend requests Your organisation is responsible for publishing quarterly data summaries of requests you have asked Cabinet Office to approve.

HM Treasury guidance requires all organisational spending over £25,000 to be published online. Approved expenditure requests for the digital and technology, advertising and marketing, recruitment, property and consultancy controls must also be published.		  

In addition to the above controls, all expenditure requests that are above departmental delegated limits must also be submitted to the relevant HM Treasury spending team for approval.

6. Breaches of spend controls

Breaches of the controls are serious and may be considered as irregular spend. Where breaches occur, the organisation’s accounting officer must notify the National Audit Office (NAO). The Comptroller and Auditor General (C&AG) may then qualify his or her opinion on the account and the Public Accounts Committee (PAC) may decide to hold an oral hearing.

HM Treasury is informed if your organisation does not follow the controls framework, usually after an audit. Your organisation may face financial sanctions to recover any money that is spent without approval.

The Cabinet Office will not process requests for retrospective approvals seeking to regularise irregular spend. In the rare scenario where urgency prevents time-critical, unanticipated spend from being approved in the normal fashion, handling should be agreed with the relevant control team.

An organisation should not treat a breach of spend controls as providing cover for further non-compliance. If a breach occurs through failure to correctly secure approval for an Outline Business Case (OBC), the organisation is still required to comply with the controls process for the subsequent Full Business Case (FBC).

7. Contacts

Email cabinetofficecontrols@cabinetoffice.gov.uk for general questions about the spend controls policy.

For queries about specific spend controls email:

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