NEWS | Spend and Recruitment Freeze from 1 August
The council needs to make significant savings in order to reduce the in-year overspend of £36m and look to reduce next year’s savings target.
As a result, we have taken the decision to implement a 'Spend & Recruitment Freeze' which means that council money may only be spent if it falls within one of three Essential Spend categories, regardless of whether or not there is a budget in place to cover the expenditure.
The Essential Spend categories are:
- Service Failure
- Legal Requirement
- Contractual Obligation
If you are considering spending money on behalf of the council, you must ensure the expenditure meets one of the Essential Spend categories before you engage in the buying process. This applies to all employees at all levels of the organisation and to all council spend, regardless of value. The relevant budget-holder is accountable for ensuring that the spend meets one of the Essential Spend categories.
Essential Spend also relates to conferences, seminars and training. The budget-holder must be able to demonstrate that the requirement arises from a contractual obligation, legal requirement or a service failure.
Below is a summary of each Essential Spend category.
Essential Spend categories
Essential Spend category 1 - Service failure
This category should only be used when the spend is directly linked to a Service Area’s ability to function and that lack of function would impact on statutory or regulatory responsibilities (for example, looked after children placements would be acceptable).
Essential Spend category 2 - Legal requirement
This category relates to obligations imposed on the council, including those that are statutory or regulatory. For example, the duty to make reasonable adjustments under the Equality Act 2010 or Health and Safety at Work Act 1974. If your requirement falls within this category, you will need to identify the relevant legislation that relates to your requirement.
Essential Spend category 3 - Contractual obligation
This category only applies if there is a contract in existence under which the council is contractually committed (and therefore must) pay a supplier under specific contract terms, for example, paying our street cleansing service provider (LSSL). It is important to remember that just because a current supplier may be able to meet a requirement does not mean that it falls within scope of the contract. This category will also include where expenditure is funded via grant that includes a contractual obligation with the grant provider to spend within a time frame and on particular items.
Advice should always be sought from Procurement Services if you are unsure whether a contractual obligation exists.
External training requests must meet the above criteria and this should be included in the request on the Learning Hub.
All spend will now require the Chief Executive, Director of Finance and Resources and Head of Finance approval, and one of the three reasons above should be clearly stated.
Expenditure will be tracked week on week with a reduction expected, if this is not seen further measures will need to be put in place.
Spend in an emergency planning and resilience situation can be approved by the duty officer, silver or gold command.
Any expenditure related to the response and recovery from Covid-19 and test and trace programme, this should be approved by Heads of Finance, as the test for this will be whether we can include this on the relevant Covid-19 return to MHCLG
Invest to Earn/Save
If a case can be made to spend for invest to save or earn purposes in particular in relation to the city’s recovery from Covid-19 pandemic this should be forwarded with the request to spend and this will be considered by management team and dealt with on a case by case basis. These cases can not cause any further pressure on the revenue budget in this financial year
In extraordinary circumstances expenditure outside of these categories will need to be approved by the Chief Executive and the Director of Finance and Resources.
Vacancy and recruitment freeze
Delegated powers reports should be completed including a business case for filling the post (including agency) should be submitted to the Director followed by the appropriate Head of Finance but will now need further approval from the Chief Executive and Director of Finance and Resources.
Vacancies will only be approved if they are:
- Business critical
- Income generating
- Grant funded
- A statutory requirement or as part of a service review where there is a clear case of 'invest to save'.
Any approved vacancy will be offered to those people on the redeployment register.
If the vacancy cannot be met by someone on the redeployment register. It will be advertised internally first.
All vacancies that are currently out to advert or have not yet been appointed to will be reviewed by Chief Executive and the Director of Finance & Resources.
Please note this also applies to filling part time vacancies, increasing hours, overtime, secondments and honorariums.
Each Director is responsible for initial approval for expenditure requests to progress through to the next stage of approval. Directors should satisfy themselves that the expenditure meets one of the categories above before approving to continue to the next stage. These approvals will need to be in conjunction with Heads of Finance.
Finance, Procurement and People and Talent will provide further challenge and quality assurance before any requests progress to the final stage of the weekly meeting
A weekly meeting with the Chief Executive and the Director of Finance and Resources will be held to review requests for expenditure. This meeting will be held every Thursday so you will need to make sure all requests are received into Procurement and People and Talent by COB Tuesday to enable information to compiled and quality checked.
This meeting will also review the expenditure levels of the council to ensure we are seeing a reduction and consider further measures.
If you require further guidance please speak to your budget holder/line manager or director.