By Lucy Phillips
27 April 2011
The Audit Commission has been lambasted for wasting tens of
thousands of pounds of public money on head-hunters amid fresh allegations of
profligacy.
Figures revealed to Parliament show £128,200 was spent on
fees to executive recruitment consultants between 2008 and 2010.
This included £22,000 in April 2010 to recruit a new chief
executive following the departure of Steve Bundred. The recruitment process had to be halted when the government
announced the abolition of the commission last August and Eugene Sullivan, the
acting chief executive, continued in the role.
Some £30,000 was also spent recruiting a managing director
of communications in June 2008. The post was filled by David Walker, who left
after two years.
The remaining sums were spent hiring directors of corporate
services (£14,200 and £12,000), heads of policy and assessment (£16,000 and
£20,000) and a local government finance policy adviser (£14,000).
Eric Ollerenshaw, the Tory backbencher who uncovered the
spending through a parliamentary question, told Public Finance that the money spent on recruitment consultants was
‘incredible’ because ‘it was quite an obvious pool of people’ that would be
suitable for such roles.
Condemning the practice across local government, as well as
at the Audit Commission, he added: ‘Why were they always hiring head-hunters
when you would have thought the top salaries would attract people anyway?
‘What seems to have happened under the previous government
was a kind of gamesmanship using consultants and head-hunters with little
understanding that the money was public money.’
The Conservative MP for Lancaster and Fleetwood said the £22,000
spent in the futile attempt to recruit a new Audit Commission chief executive
was the equivalent of another public sector frontline job.
The Audit Commission defended the expenditure. A spokesman
said: ‘Recruitment agencies are typically used across the public
and private sector in the search for the right people to fill senior
management posts. The amounts given here are not unusual for these services,
which include head-hunting across relevant markets, and recruitment advertising
in trade and national publications.
‘With
regards to the commission seeking to replace Steve Bundred as chief executive
in 2010, events overtook that project when the secretary of state announced our
abolition.’
Meanwhile, new accusations of lavish spending by executives
at the commission have emerged.
After another parliamentary question from Ollerenshaw, the
watchdog has published all its government credit card spending from April 2008
to March 2010. Items include bills from top London restaurants, music retailer
HMV and cinema tickets. More than £20,000 was spent by senior managers who had
access to the cards over the two year period.
Ollerenshaw, who was previously a local councillor, said:
‘You regarded the Audit Commission as the ultimate judge of value for money in
terms of what we were doing as councillors and local authorities. To find out
they could not apply the same rules to themselves is quite astonishing. There
seemed to be a dual standard operating.’
He said he was concerned that similar instances had happened
across other government agencies under the previous government. It was not just
an issue for the Department for Communities and Local Government, he added.
The expenditure was also condemned by local government
minister Grant Shapps. He said: ‘These revelations show a deep-rooted culture
of waste in the Audit Commission. The body was treating the government
procurement card as its flexible friend, spending taxpayers’ cash as if it had
just won the lottery.’
The commission again defended itself. A spokesman said: 'In
common with many public bodies, the Audit Commission uses Government
Procurement Cards for low-value transactions or where a purchase order is
impractical. Procurement cards are recognised as the most cost-effective way of
dealing with such transactions and often result in lower prices.
‘Between April 2008 and March 2010 we processed 8,818
transactions at an average cost of £125. All purchases were for legitimate
business purposes. Payments made by these procurement cards are routinely
checked to ensure the cards are being used correctly.'
Ministers are now preparing to launch an inquiry into
spending on government procurement cards across public sector bodies.
A spokesman from the DCLG said ministers were ‘looking at
what the justification and business case would be for expenditure like this’.
