A report by the Public Accounts committe states that Central Government spends £2bn a year on consultants, of which £500m is wasted.
Highlights
1. Only half of the recommendations in the Committee’s 2002 Report, Better value for money from professional services, have been properly implemented
2. Departments and OGC do not routinely know how much money is spent on consultants.
3. Consultants are often used when in-house staff have the necessary skills and are less expensive.
4. Departments do not routinely assess the value of the work they receive from consultants.
5. The capability of departments to be intelligent customers is weakened by insufficient sharing of information on consultants’ performance.
6. 40% of clients consider they have used consultants when it was not necessary.
7. For the last three years the most frequently purchased consultancy was IT and project management skills, accounting for 54% of government’s total expenditure on consultants.
8. Departments do not regularly plan for, or achieve, the transfer of skills from consultants to their staff to build internal capabilities.
9. Some consultant charges lack transparency, making it difficult to verify that all costs are justified
10. Only 1% of consulting projects use incentivised contracts and much work is still paid for on a time and materials basis.
11. Departments are appointing some consultants through single tender, which puts value for money at risk.
12. Central government spends over £100 million with each of its top four suppliers, yet does not take full advantage of that spending power.
