Curbing the use of consultants

October 18, 2010 11:32 AM

Whilst we were celebrating scores of wasteful quangos being culled last week, a little-reported piece of news about consultants didn’t escape our notice.


The National Audit Office released information showing that the Government took out 50 new contracts with consultants in less than three months, despite promising to cut the cost to the taxpayer of using outside experts.  The deals approved were worth almost £10 million.


It’s not all bad: steps have been taken to curb the cost of consultants and there has been a reduction in the number and value of contracts being placed (with new contracts worth more than £20k having to be signed off by ministers), but these new contracts still show a lack of commitment to tackling an area of wasteful spending.


An analysis of 17 government departments showed that their spending on consultants had fallen from £904 million in 2006/07 to £789 million in 2009/10. However, the NAO said that some of the reduction may have simply reflected more accurate recording of the costs rather than any improvement in management controls. NAO estimates put overall Whitehall spending on consultants in the last year of the former Labour government (2009/10) at £1.5 billion.


Cutting the use of consultants used at every level of Government can provide swift, painless savings.  With public finances under such huge pressure, the Coalition has to start to live up to its pledge to cut this bill.  There are some situations where consultants with expertise can genuinely be good value, but departments need to ensure that when consultants are employed they are used effectively, to achieve value for money for taxpayers. As Sir Philip Green’s report pointed out, the disparity in procurement prices for basic items shows that departments have a lot to learn from each other – the same applies for employing consultants.

Whilst we were celebrating scores of wasteful quangos being culled last week, a little-reported piece of news about consultants didn’t escape our notice.


The National Audit Office released information showing that the Government took out 50 new contracts with consultants in less than three months, despite promising to cut the cost to the taxpayer of using outside experts.  The deals approved were worth almost £10 million.


It’s not all bad: steps have been taken to curb the cost of consultants and there has been a reduction in the number and value of contracts being placed (with new contracts worth more than £20k having to be signed off by ministers), but these new contracts still show a lack of commitment to tackling an area of wasteful spending.


An analysis of 17 government departments showed that their spending on consultants had fallen from £904 million in 2006/07 to £789 million in 2009/10. However, the NAO said that some of the reduction may have simply reflected more accurate recording of the costs rather than any improvement in management controls. NAO estimates put overall Whitehall spending on consultants in the last year of the former Labour government (2009/10) at £1.5 billion.


Cutting the use of consultants used at every level of Government can provide swift, painless savings.  With public finances under such huge pressure, the Coalition has to start to live up to its pledge to cut this bill.  There are some situations where consultants with expertise can genuinely be good value, but departments need to ensure that when consultants are employed they are used effectively, to achieve value for money for taxpayers. As Sir Philip Green’s report pointed out, the disparity in procurement prices for basic items shows that departments have a lot to learn from each other – the same applies for employing consultants.

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