Tuesday, June 19, 2007

Consultants Profligacy

YESS!!! We're all on maximum bonuses!!!

The PAC have just issued their report on government use of consultants. We blogged the excellent National Audit Office Report here, with a summary of the key facts, so we won't repeat them here. The bottom line is that the public sector is currently spending £3bn pa on consultants, or nearly 1p on the standard rate of income tax. And value it ain't.

The PAC reckons Whitehall turns to consultancy firms for "inappropriate reasons, such as to re-assign blame, to compensate for the perceived poor quality of civil service management, to substitute for civil servants who have been made redundant and to delay implementation of policy".

Well, who'd have known?

Sir Edward adds "It is impossible to believe that the public are receiving anything like full value for money from this expenditure. In fact, a good proportion of it looks like sheer profligacy."

As a measure of this, the NAO reckoned government departments spend five times as much on consultancy as private sector companies:

"the average central government organisation, when compared to our private sector comparators spends more on consultants per employee (£10,000 compared to £2,000) and as a proportion of operating costs (11 per cent compared to four per cent)" (NAO report para 2.5).

So should we expect the turning of a new leaf?

Er... no. The NAO identified 12 previous recommendations on the use of consultants from NAO and PAC reports and looked to see how well they'd been followed subsequently. Shockingly, NONE had been fully implemented across all five major departments studied (NAO figure 2).

Profligate and incompetent. The prerogative of the Simple Shopper ever since governments started helping themselves to our money.

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