By Vivienne Russell
A report from the Public Accounts Committee published today raised concerns about central government’s reliance on consultants and said departments should focus more on developing their civil servants’ core skills.
The committee also noted that some departments spend more on consultants than others. For every £100 spent on its staff costs, the Department for Transport spends £70 on consultants. This compares with Revenue and Customs, which spends only £2 per £100 spent on staff.
PAC chair Margaret Hodge said that, while there were legitimate reasons for Whitehall to buy in expertise from consultants, departments had become ‘too reliant’ on them.
She went on: ‘Some departments depend far more on consultants that others. In itself, that is not surprising. What is unacceptable is the poor understanding of whether the extent of a department’s use of consultants is justified by the nature of its business. Why should the Department for Transport, for instance, be so dependent on consultants?
‘It is a mark of departments’ poor understanding of spending on consultancy that some have reacted to cost pressures by cutting that spending in an uninformed way. This run the risk that short-term savings could lead to increased costs and poor value for money for the taxpayer in the long term.’
Alan Leaman, chief executive of the Management Consultancies Association, said: 'The PAC has recognised that management consultancy is a legitimate and valuable expenditure for central government departments - this is particularly true in an era of reductions in spending and the need to achieve a step-change in public sector productivity.
'The PAC has also rightly pointed out that a 'stop-go' approach will not deliver value for money. The current moratorium is storing up expensive problems for the future. The new government has a responsibility to use management consultancy in a way that delivers sustainable value for the public.'
21 December 2010
Whitehall does not know whether the £1bn it spends on consultants each year represents value for money, according to MPs.
A report from the Public Accounts Committee published today raised concerns about central government’s reliance on consultants and said departments should focus more on developing their civil servants’ core skills.
The committee also noted that some departments spend more on consultants than others. For every £100 spent on its staff costs, the Department for Transport spends £70 on consultants. This compares with Revenue and Customs, which spends only £2 per £100 spent on staff.
PAC chair Margaret Hodge said that, while there were legitimate reasons for Whitehall to buy in expertise from consultants, departments had become ‘too reliant’ on them.
She went on: ‘Some departments depend far more on consultants that others. In itself, that is not surprising. What is unacceptable is the poor understanding of whether the extent of a department’s use of consultants is justified by the nature of its business. Why should the Department for Transport, for instance, be so dependent on consultants?
‘It is a mark of departments’ poor understanding of spending on consultancy that some have reacted to cost pressures by cutting that spending in an uninformed way. This run the risk that short-term savings could lead to increased costs and poor value for money for the taxpayer in the long term.’
Alan Leaman, chief executive of the Management Consultancies Association, said: 'The PAC has recognised that management consultancy is a legitimate and valuable expenditure for central government departments - this is particularly true in an era of reductions in spending and the need to achieve a step-change in public sector productivity.
'The PAC has also rightly pointed out that a 'stop-go' approach will not deliver value for money. The current moratorium is storing up expensive problems for the future. The new government has a responsibility to use management consultancy in a way that delivers sustainable value for the public.'
