FGN2024/03 SPFM AO Spend Control August 2024
The purpose of this note is to highlight the updates to the AO Spend Control Process guidance and template which supplements the guidance in the SPFM. This is a temporary spend control that must be followed by all parts of the Scottish Government, including public bodies and agencies, as agreed by Cabinet, recognising the challenging financial position in current and future financial years. The spend controls will be regularly reviewed and updated as required.
What’s Changed?
An updated AO Spend Control Template and Guidance note for 2024-25 which now includes additional guidance focused on the application to Public Bodies (Annex C in the template) is now available. There have also been some small recent amendments to other sections of the template, mainly within the checklist section, following from asks from the Tax and Property & Construction Team.
AO Spend Control Process
The purpose of the AO Spend Control process is to seek final approval to proceed with spend in the context of the current financial position. The aim is to consider the prioritisation and affordability of the spend within the wider financial position of the organisation.
AO Spend Control templates are not a replacement for Pre-Expenditure Assessments (PEAs), Business Cases or Impact Assessments. The Spend Control template should be completed after these assessments have been undertaken as a means of budgetary control and to ensure a formal record of the decision taken and approval received for releasing expenditure.
Separately to this spending control, Accountable Offers (AOs) should ensure all their other AO duties and responsibilities in relation to the activity and expenditure are appropriately discharged. Further guidance on this can be found in the Accountability Chapter of the SPFM.
The process applies to all categories of spend with an impact on 2024/25 and/or in future years. Currently the AO Spend Control process must be followed for:
- all resource expenditure greater than £1 million that is not legally committed. This threshold applies per annum.
- all capital expenditure greater than £1 million that is not legally committed. This threshold applies per annum.
- all FT expenditure greater than £1 million that is not legally committed. This threshold applies per annum.
- seeking to approve repurposing of underspends for resource, capital or FTs of over £1 million.
For future year spend (including 2025/26) the AO Spend Control process should also be completed for all spend greater than £1 million in line with the parameters above. This threshold applies per annum and should be considered across the whole life outlay of the planned spend.
These steps should be taken in addition to any local spend control arrangements, noting that AO’s internally agreed governance processes should be followed for expenditure of up to £1 million.
The AO Spend Control guidance and template can be sourced from your Sponsor Team and / or Finance Business Partner. Detailed guidance to completing the template can be found at Annex A. The approval process and delegated limits are set out at Annex B. Further information on the application to public bodies can also be found at Annex C.