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STATES OF JERSEY
USE OF CONSULTANTS – FOLLOW UP (R.37/2024): EXECUTIVE RESPONSE
Presented to the States on 7th June 2024 by the Public Accounts Committee
STATES GREFFE
2024 R.37 Res.
REPORT
FOREWORD
In accordance with paragraphs 69-71 of the Code of Practice for engagement between Scrutiny Panels and the Public Accounts Committee' and the Executive', the Public Accounts Committee (PAC) presents the Executive Response to the Comptroller and Auditor General's (C&AG) Report entitled: Use of Consultants – Follow up (R.37/2024, presented to the States Assembly on 6th March 2024).
Deputy I. Gardiner
Chair, Public Accounts Committee
COMMENTS
The Committee has reviewed the Executive Response to the report Use of Consultants – Follow up' and has the following comments to make in respect of it.
Action Plan – Better Management Information
The PAC notes that within the response, action three of the action plan relates to collecting better management information in respect of workforce reporting and analysis. This focuses on data in respect of the current workforce and numbers, future forecasts, budget, current vacancies and upcoming recruitment campaigns to be completed, contingent labour and consultants. The intention is for this to provide workforce insights and identify improvement opportunities across Government and within departments. The PAC notes that this will, however, not include Health and Community Services (HCS) and Children, Young People, Education and Skills (CYPES) in the first instance.
The PAC would question why these departments are not being included at this time, especially noting the level of expenditure on consultants within HCS. Furthermore, noting the overspend within HCS in 2023 of c£30 million and an expected £18 million in 2024, the PAC would also question whether this decision is correct given the amount of work being undertaken by the turnaround team to address spending within HCS. The PAC would suggest that further consideration is given to how better management information can be recorded within HCS in order to help identify and reduce the spend on consultants within this area. Likewise, within CYPES, the PAC would highlight that the current reliance on agency staff within Children's Service has been reduced during 2023 (43% at present), however, this will need to be considered further to ensure value for money is being achieved, alongside ensuring a high standard of care and overall stability of the workforce.
P.59/2019 reporting
The PAC notes that the States Assembly decision in relation to P.59/2019 Consultants: Reporting on their use by the Government of Jersey (P.59/2019), requires six-monthly reports to be made to the Assembly on the use of, and spend on consultants. It is noted within the action plan accompanying the Executive Response, that a step will be built into production of this report to remind Chief Officers of their obligations under the Public Finances Manual (PFM) to publish consultants' reports. This is to be supported by Corporate Portfolio Management Office (CPMO) revisions to tools and guidance and
Commercial Services procurement user guide revisions. The PAC would like to see further detail as to how these guidelines will be checked and complied with in practice. Furthermore, the PAC notes that the Connect ITS programme (Ariba SAP system) that was implemented in 2023 (to replace a number of procurement systems) has a number of bolt-on' elements which are intended to be introduced in the coming months/years. The SAP Request for Quote (RFQ) is intended to be rolled out in order to improve work order recording under framework agreements as the contract information is captured within the work order itself. The PAC would like to see further evidence as to how this will enhance the work order process and how compliance with the framework will be evidenced. Advice and guidance is available in relation to Contract Management, however, the PAC notes that this can be made available rather than will be available. From the perspective of the PAC, this appears to be non-committal and it would expect to see further information as to how this guidance is used as part of the procurement process. The PAC would also question whether the costs associated with the additional bolt on element of the SAP system have been budgeted for within the existing heads of expenditure associated with this particular programme and will be requesting further information as to whether this is the case.
Use of Finance Business Partners
The PAC notes that Finance Business Partners (FBP's) are assigned to each department to act as a conduit to the Treasury and Exchequer, and effectively act as a gatekeeper' in holding the Chief Officer, and department to account for the use of funds assigned within their Heads of Expenditure. Whilst no reference is made to these roles within the Executive Response, the PAC would question what their role should entail in relation to consultants within departments and how they drive value for money for the use of consultants by departments. The PAC will likely question this point further within its review of procurement processes which it intends to launch in due course. Recommendation 4
R4 Undertake a specific review of the current and planned future use of consultants and contingent labour performing project managemen t roles. Use this review to identify alternative delivery models to drive | Agreed | If not implemented, opportunities will be missed to fill vacancies with permanent staff, or to develop skills within GoJ (including via skills transfer), which may use of consultants and contingent labour is not minimised. | Interdependencies with: • Departmental workforce plans, succession plans and talent development plans. • HCS Financial Recovery Plan workstream on resource planning aims to reducing expenditure on fixed term contracts, locums, and agency staff | Actions outlined in Strategic Workforce Planning - Skills & Succession which will deliver improved succession management, skills development, as well as accurate information and controls on use of contingent workers. |
improved value for money. |
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| • CYPES work to mitigate reliance and spend on agency social care as well as improve outcomes for children • Vacancy management and regular housekeeping of establishment |
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The PAC notes that this recommendation is accepted, however, it is of the opinion that the response to this recommendation is limited and lacking detail. It notes that the actions outlined in the Strategic Workforce Planning – Skills and Succession are intended to deliver these improvements in relation to the future use of consultants, however, the PAC would expect to see further detail in relation to how this will be achieved in practice and what steps are being taken to ensure the actions outlined in the response are achieved.
It should be noted that HCS had considerable extra spend on consultants in 2023 and a plan is in place to reduce the reliance on this. The PAC would like to see evidence of how this plan is being delivered and how it is achieving value for money for the taxpayer as this is a significant area of spend in relation to consultants. It is also noted that a Member of the HCS turnaround team has recently left their position, and the PAC has concerns over the future membership and work of this team, which it will seek further clarity on.
Recommendations 9 and 10
R9 Develop and implement a standard, consistent process for the evaluation of consultancy engagements. Ensure the process includes consideration of | Not agreed | A mitigation of not adopting this recommendation is that there is an existing Closure Document which exists in the GOJ Project Delivery Frameworks, which is a requirement under the Public Finances Manual. This document provides the ability for projects to undertake a post-project review of team performance. It relates to project performance and not | The contract manager and Accountable Officer are responsible for continuously evaluating the performance of consultants, and any performance issues should be addressed whilst the engagement is underway. Arguably, a post- evaluation exercise is too late. Allocating resources to centrally coordinate and collate information |
the following questions: • Was the project completed on time and to budget? If not, why? • Were project objectives achieved? • Was the quality of work satisfactory? • Will recommendations be implemented? • Were problems encountered on the assignment? • How did the firm and/or individual consultant perform? |
| specifically the performance of consultancy engagements. | generated through an evaluation process is unlikely to be prioritised amongst other competing priorities. However, guidance and tools can be made available to support Accountable Officers to undertake evaluation activity, particularly for consultancy engagements attached to projects. |
R10 Develop and implement a formal system of documenting and monitoring consultant recommendations across States of Jersey departments. | Not agreed | Non-implementation increases risk of lack of visibility of progress against consultant recommendations, internally and with States Members. However, if non-exempt consultant reports are published routinely, this risk becomes tolerable, as this will enable scrutiny by Public Accounts Committee and other Scrutiny/ oversight groups. On balance, it is considered that the added value is not commensurate with the additional resource that would be needed to coordinate a central monitoring system. | There are not currently the resources or systems in place across GoJ to implement this recommendation effectively. At this time, additional resource to implement this recommendation is not a priority. It is the responsibility for Accountable Officers to manage consultant engagements and resultant recommendations in line with Departmental and Ministerial priorities. Central controls will not be implemented, and it will be for departments to decide how they apply compliance monitoring, for example using a tracking system. In addition, Chief officers/ SROs are held to account through existing governance, performance framework and Scrutiny processes. |
The PAC notes that these recommendations have both been rejected with a mitigation of not adopting them being that there is an existing Closure Document which exists in the Government of Jersey Project Delivery Frameworks, which is a requirement under the Public Finances Manual. The PAC notes this response, however, it also notes that the recommendations have been made by the C&AG in order to assist in improving the manner in which evaluation of engagements and projects are undertaken in respect of
consultants. Whilst the existing documentation is noted, the PAC is concerned that by not accepting these recommendations, the Government is essentially stating that improvements are not required, despite the C&AG highlighting these areas for improvements. Without an effective evaluation process, the PAC would question how Government is ensuring value for money without the implementation of these two recommendations.
Recommendation 7
R7 Develop and implement standard approaches to managing and reporting on consultants across the Government, including very clear requirements on the reporting of planned and actual skills transfer where this is a clear part of a commissioned piece of work. | Agreed | If appropriate guidance on contract management is not issued, then suboptimal contract management could mean that contract outcomes, including skills transfer are not achieved, risking VFM. | The contract manager and Accountable Officer are responsible for the successful outcomes of any engagement and guidance, if not followed, will not eradicate this risk. Skills transfer obligations should be managed in the same way as any other contract requirement/outcome and performance evaluation. It is not seen as prudent to create additional requirements for contract performance management. | Actions outlined in Contract Management & Value for Money Toolkit guidance will include contract management. |
The PAC notes that this recommendation has been accepted by Government and links to developing and implementing standard approaches to managing and reporting on consultants across Government. This is welcomed by the PAC. However, the PAC has noted that this recommendation also links to improvements to evaluation processes in terms of reporting on the actual and planned skills transfer. The importance of the evaluation process was highlighted by the C&AG within recommendation nine of the report which has not been agreed by Government. This does not marry up in the PAC's view and taking forward recommendation seven is reliant on the implementation of the evaluation process set out in recommendation nine. The PAC would, therefore, question what is being done to address this potential disparity between responses.
Conclusion
Overall, the PAC is pleased to note improvements will be taken forward in relation to the use of consultants as a result of the C&AG report and recommendations. It has noted, however, that the action plan is reliant on work being undertaken across all departments and a consistent method of recording, reporting and evaluating the use of consultants is required. It would highlight the following key points in relation to this response:
• Management information across HCS and CYPES around use of consultants is not intended to be collected when identifying areas for improvement across Government, at this time. The PAC would question this point, especially in
relation to HCS, given its overall spend on consultants and ongoing work being done in relation to the financial recovery plan for health.
• Further details are required as to how the Government intends to improve reporting to the States Assembly in relation to P.59/2019.
• Clarification of the role of Finance Business Partners in relation to driving value for money in the use of consultants needs to be provided to the PAC. Further detail is required as to how the Government intends to implement recommendation four of the C&AG report as the response appears limited and lacking in detail.
• Recommendations nine and ten are not agreed by the Government due to existing processes for evaluation being in place. However, the PAC is of the view that existing processes have been highlighted for improvement by the C&AG in the report, and consideration should be given as to how the Government is achieving value for money without making these improvements.
• Recommendation seven has been accepted by Government, however, this is contingent on improved evaluation processes being in place which have been rejected within recommendation nine of the report. The PAC would question how these two points marry up given their reliance on each other.
The PAC intends to launch a review into procurement across the Government of Jersey, and this report and response will be considered as part of this review. Moreover, the implementation of the recommendations of the report will be assessed during this review.
Chief Executive and Treasurer of the States Executive Response to C&AG Report: Use of Consultants – Follow Up Summary of response:
The Chief Executive and Treasurer of the States welcome the report from the Comptroller and Auditor General. The recommendations have been used to develop a strategic action plan, based upon the risk profiles of the recommendations, and a consideration about the root cause themes leading to the recommendations.
The response and action plan below have been considered and devised collaboratively by colleagues across several enabling functions; namely People and Corporate Services and Treasury, including CPMO. There is broad agreement to most of the recommendations. However, R9 and R10 are not agreed, as it is assessed that the resource investment to achieve full implementation would outweigh the value gain, and the risks could be mitigated at a departmental level with additional guidance and reiterating existing Accountable Officer obligations.
The action plan outlined below includes 4 key elements of focus:
• Strategic Workforce Planning - Skills & Succession
• Contract Management & Value for Money
• Better Management Information
• Definitions and monitoring
There are several actions in the plan that require collaboration and coordination across two or more support functions to implement, which will ensure consistent communication and advice to managers, budget holders and decision makers. As a result, it is expected that improvements will be secured in planning for the use of consultants and other temporary expertise and capacity, in the evaluation of outcomes and VFM as well as reporting.
There are several dependencies highlighted in the responses and actions outlined, the most prominent being that the improvements proposed enhance frameworks which are aimed at supporting and assisting Departmental teams to improvement planning, execution, and evaluation of resources. The ultimate success is therefore dependent on Department Team's buying into and compliance with good practice. There are also several specific dependencies, for example, relating to systems development which would require support from Modernisation & Digital or alignment with systems changes the dates for which are to be confirmed.
Progress against the action plan will be tracked internally, and all Chief Officers will have oversight of implementation through the periodic reporting cycle. The requirement to implement agreed actions is monitored through the Chief Officers objectives and discussed as part of performance discussions with the Chief Executive Officer.
Prioritised improvement plan to address recommendations:
Action theme | Actions | Target date | Responsible Officer |
Strategic Workforce Planning - Skills & Succession |
Launch succession planning guidance, training, and tools to ensure managers have greater confidence and competence in conducting succession planning.
| Q2 2024 Q4 2024 Q4 2024 Q2 2025 | Deputy Chief People Officer |
Contract Management & Value for Money |
| Q3 2024 Q3 2024 | Director Commercial Services |
Better Management Information |
| Q4 2024 Q4 2024 | Group Director Finance Business Partnering and Analytics and Deputy Chief People Officer, as appropriate. |
Definitions and monitoring |
| Q4 2024 Q4 2024 Q2 2024 | Group Director Finance Business Partnering and Analytics Director Commercial Services Group Director Finance Business Partnering and Analytics |
Risk Assessment and decision rationale
Recommendations | Is the recommendation agreed? | Risk of non-implementation | Other considerations in prioritisation | Link to improvement plan |
R1 Review and update the definitions of contingent labour, consultancy expenditure and professional services so that there is consistency and clarity on process and coding. | Agreed | If this recommendation is not implemented, there will be a lack of consistency in reporting and data quality, resulting in a potential lack of confidence in GoJ reporting of consultancy and contingent labour spend which affects reputation. Current approach results in significant manual data manipulation, inefficient processes, and sub-optimal use of resources/ capacity, as well as resulting in delays in reporting. | Successful implementation will require input from many stakeholders, including P&CS /Commercial Services – Non-Payroll/ Finance BP/ Group reporting. There may also be systems obstacles, as changes will need to be made in Connect Finance (COA and enterprise structure). Change management plan will be required across the organisation, using several channels managed by different depts e.g. Commercial services for contracts for services P&CS for interims, fixed term contracts via payroll, P59/ SEB, Budget holder training and advice (FBPS/Group reporting/SAP) would be necessary to signal changes, educate requisitioners and budget holders and therefore embed improvements. Education and communication are iterative and constant processes of engagement. Communication with States Members may be required due to impact of updated definitions on P59 reporting. | Actions outlined in Definitions and Monitoring will enable provision of clear guidance on choice of codes with limited range of examples making it simpler for the coder. This activity also supports response to R3 and assist in streamlining production of P59 report, improve efficiency of data collation (through greater automation) and processing to publication. |
R2 Ensure that departments are provided with regular reports on contingent labour and consultancy expenditure so that such expenditure can be scrutinised and challenged by officers, both at departmental level and at corporate level. | Agreed | Currently, lack of frequency – and therefore timeliness – of available information means that reports are not generally used by management for decision making purposes: currently collated on a 6 monthly basis to produce the P59 report and extremely labour intensive. | A Power BI dashboard and analysis covering the period 2021-2023 has been developed to inform decision making and planning for 2024-25. It will be possible to build further for use in departmental SLTs. Delivery is subject to dependencies on resource capacity in the A&MI team and technical/ systems capabilities as may require M&D support for further roll-out across the organisation and the volume of budget managers. There are also gaps where information is not held in digital format which must be requested from Departments, which will need to be addressed. | Actions outlined in Better Management Information Which will provide improved decision- making information |
R3 Review and, where possible, streamline the process for compiling the P.59/2019 reports to the States Assembly. In doing so: • consider whether to recommend amendments to the report requirements to the States Assembly to assist in more cost-effective production; and • ensure that these reports are produced on a more timely basis. | Agreed | The current process of data extraction & collation is extremely labour intensive –several factors mean there is significant manual intervention to categorise and verify the data. Resources deployed vs. output does not equate to good VFM. There is a requirement to report on data points which are not held on system. This results in a multi-step collation and verification process involving a wide range of stakeholders which creates risks of delays and data inaccuracies. | Some elements of the collation process have been automated. Understanding how States Members use the information, could highlight options for how reporting could be improved and streamlined. However, this may lead to changes to the P59 Proposition requirements. However, this may require political sponsorship and Assembly agreement. | Actions outlined in Definitions and Monitoring Interdependency with R1 – which will enable further automation. Improved data quality could reduce the number of data verification steps, facilitating more efficient production of reports. |
R4 Undertake a specific review of the current and planned future use of consultants and contingent labour performing project management roles. Use this review to identify alternative delivery models to drive improved value for money. | Agreed | If not implemented, opportunities will be missed to fill vacancies with permanent staff, or to develop skills within GoJ (including via skills transfer), which may use of consultants and contingent labour is not minimised. | Interdependencies with: • Departmental workforce plans, succession plans and talent development plans. • HCS Financial Recovery Plan workstream on resource planning aims to reducing expenditure on fixed term contracts, locums, and agency staff • CYPES work to mitigate reliance and spend on agency social care as well as improve outcomes for children • Vacancy management and regular housekeeping of establishment | Actions outlined in Strategic Workforce Planning - Skills & Succession which will deliver improved succession management, skills development, as well as accurate information and controls on use of contingent workers. |
R5 Enhance the management information produced, reviewed, and challenged in respect of expenditure to include:
| Agreed | Much of the governance steps identified in the recommendation are already in place or in train. For example, Commercial services and Finance Business Partners have an approval workflow role for Breaches and Exemptions, which are reported regularly. Retrospective supplier approval can also be interrogated through existing reports. | It is vital that accountability and responsibility remains with AO's and their delegated budget holders. Operational improvements are being implemented to improve contract register coverage and data quality It should be noted that migration to Connect Finance required some new Supplier Accounts to be set-up for existing Suppliers – to enable Ariba platform usage (these were retrospective from a technical perspective). | Actions outlined in Better Management Information Which will ensure that breaches and exemptions, and retrospective supplier approvals are visible to a wider group of key stakeholders. |
Departmental Finance Business Partners
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R6 Enhance the Procurement Best Practice and Procedures: User Guide and Toolkit to include clarity on the contract management responsibilities of officers in charge of consultancy projects. | Agreed | If appropriate guidance on best practice procurement is not issued, then there will be variance in practice, increasing risk to VFM and effective contract management. |
| Actions outlined in Contract Management & Value for Money will provide improved guidance to drive compliance |
R7 Develop and implement standard approaches to managing and reporting on consultants across the Government, including very clear requirements on the reporting of planned and actual skills transfer where this is a clear part of a commissioned piece of work. | Agreed | If appropriate guidance on contract management is not issued, then suboptimal contract management could mean that contract outcomes, including skills transfer are not achieved, risking VFM. | The contract manager and Accountable Officer are responsible for the successful outcomes of any engagement and guidance, if not followed, will not eradicate this risk. Skills transfer obligations should be managed in the same way as any other contract requirement/outcome and performance evaluation. It is not seen as prudent to create additional requirements for contract performance management. | Actions outlined in Contract Management & Value for Money Toolkit guidance will include contract management. |
R8 Undertake a review to ensure that all consultancy reports not considered exempt under Freedom of Information legislation are published on the Government of Jersey website | Agreed | If consultants' reports are not published – unless they are exempt under the FOI law, then States Members and the public may not be aware of all policy/operational options/recommendations that have | Accountable Officers are already obligated under the PFM to comply. However, this does not necessarily translate into compliance. Such a review may not be a priority when balanced against other competing priorities. However, improved guidance and reminders to publish during the development of the | Actions outlined in Definitions and Monitoring. |
in accordance with the Public Finances Manual. |
| been developed and may not fully inform debate. In addition, not publishing information may leads to challenges around value for money in use of consultancy services. | P59 report will be considered with a view to greater compliance moving forwards. |
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R9 Develop and implement a standard, consistent process for the evaluation of consultancy engagements. Ensure the process includes consideration of the following questions: • Was the project completed on time and to budget? If not, why? • Were project objectives achieved? • Was the quality of work satisfactory? • Will recommendations be implemented? • Were problems encountered on the assignment? • How did the firm and/or individual consultant perform? | Not agreed | A mitigation of not adopting this recommendation is that there is an existing Closure Document which exists in the GOJ Project Delivery Frameworks, which is a requirement under the Public Finances Manual. This document provides the ability for projects to undertake a post-project review of team performance. It relates to project performance and not specifically the performance of consultancy engagements. | The contract manager and Accountable Officer are responsible for continuously evaluating the performance of consultants, and any performance issues should be addressed whilst the engagement is underway. Arguably, a post-evaluation exercise is too late. Allocating resources to centrally coordinate and collate information generated through an evaluation process is unlikely to be prioritised amongst other competing priorities. However, guidance and tools can be made available to support Accountable Officers to undertake evaluation activity, particularly for consultancy engagements attached to projects. |
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R10 Develop and implement a formal system of documenting and monitoring consultant recommendations across States of Jersey departments. | Not agreed | Non-implementation increases risk of lack of visibility of progress against consultant recommendations, internally and with States Members. However, if non-exempt consultant reports are published routinely, this risk becomes tolerable, as this will enable scrutiny by Public Accounts Committee and other Scrutiny/ oversight groups. On balance, it is considered that the added value is not commensurate with the additional resource that would be needed to coordinate a central monitoring system. | There are not currently the resources or systems in place across GoJ to implement this recommendation effectively. At this time, additional resource to implement this recommendation is not a priority. It is the responsibility for Accountable Officers to manage consultant engagements and resultant recommendations in line with Departmental and Ministerial priorities. Central controls will not be implemented, and it will be for departments to decide how they apply compliance monitoring, for example using a tracking system. In addition, Chief officers/ SROs are held to account through existing governance, performance framework and Scrutiny processes. |
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