Archived decisions

Contact: Emma Gordon [email protected] ext 7567

1. Summary and purpose

1.1 In 2005/06 a total of £6.1m was coded to consultancy fees in the County Council's accounts, compared to £7.4m in 2004/05 and £7.9m in 2003/04.

The vast majority of these fees were for design and supervision of Highways and construction schemes, undertaken by outside firms of consultants.

Advice from the County Treasurer shows that it would be difficult to summarise further details as the figures comprise several thousand individual accounting entries charged to a large number of schemes.

The Policy and Resources Policy Review Committee expressed an interest to look further into this issue, to attempt to define the different types of consultancy being undertaken within the County Council and quantify spending in this area.

2. Current use of consultants at Hampshire County Council

The following are examples of where external consultants have been employed by Hampshire County Council:

3. How is the decision to employ consultants made?

Departments have freedom to choose how to approach their projects. The project sponsor, together with their Departmental Management Team, takes responsibility for deciding whether the use of external consultants represents value for money and a robust business case. Departments can also choose to employ the services of the Treasurer's Consultancy and IT Services consultants to assist with developing and rolling out their projects. As with any procurement process, when selecting consultants a robust tendering process and adherence to the County Council's financial procedures are required (the County Council's Contract Standing Orders (Part 3, F) outline the rules for the type of competitive process and legal sign off required for all types of procurement). By following this process, value for money should be achieved in projects employing consultants.

4. Accounting for consultancy work

There is a specific code for consultancy in the Council's ledger against which departments can record all consultancy. Currently, departments often record their costs on a `project' basis and so it is not always evident what element of expenditure is spent on consultancy.

5. Issues

Due to the widely varying nature and scale of work undertaken within the Council, departments' definitions of `consultancy' tend to vary across the organisation. This means that it is not always easy to identify the exact costs of consultancy within individual schemes of work or projects. Identifying these precise costs may be extremely complicated and, in many cases, the amounts in question will be very small.

6. Next steps

Members should decide whether further work is required on this topic. Should Members decide to pursue this line of enquiry, the following approaches could be considered:

1) Conduct an audit on a sample of transactions recorded against the consultancy code in the Council's ledger to gain an insight into departments' definitions of consultancy and get an overview of the types of consultancy undertaken at HCC.

2) Conduct a departmental survey on the use and cost of consultants within departments.

3) Undertake a benchmarking exercise against other local authorities to see how consultants are employed and accounted for.

7. Recommendations

That the Policy and Resources Policy Review Committee decides whether to undertake further work on this topic within the Work Programme of the Committee and advises on the form this work should take.

8. Financial implications

8.1 None as a direct result of this report

9. Impact assessment

9.1 None as a direct result of this report

10. Crime prevention

10.1 None as a direct result of this report

Section 100 D - Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have been relied upon to a material extent in the preparation of this report.

NB: the list excludes:

1. Published works

2. Documents which disclose exempt or confidential information as defined in the Act.

None.