Transport dept attacked over consultants’ bills

Grant Prior 12 years ago

The Department for Transport has come under fire from spending watchdogs for still paying too much to outside consultants despite the Governmment’s cost-cutting drive.

The Public Accounts Committee heard that the DfT spends £70 on consultants for every £100 it spends on its own staff while HM Revenue and Customs spent only £2 per £100.

The spending was part of the £1bn still paid to consultants and temporary staff in 2009-10 across Whitehall,

The committee said departments should negotiate more fixed price contracts and develop “core” skills among their own staff despite Cabinet Office claims that spending on consultants dropped 46% in the months after the election.

In his evidence to the committee, Cabinet Secretary Sir Gus O’Donnell said that spending on consultants, as a share of spending on goods and services, was about 4% – while in the private sector it was about 15%.

The report by the public accounts committee says that, in 2009-10, departments spent £789m on consultants and an estimated £215m on interim managers. In 2006-7 £904m was spent on consultants – that dropped by £126m in 2007-8.

The report said new measures brought in by the coalition to control the use of consultants seemed to be having some effect but some departments’ spending was “unacceptable”.

It flagged up the Department for Transport as the worst offender.

Committee chairman Margaret Hodget said: “Some departments depend far more on consultants than 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?”

A spokesman for the Department for Transport said it had brought in “new, more rigorous controls which require close examination and approval of any requests to appoint consultants”.

It said the department had spent £12.5m less in the 6 months to September 2010, compared with the same period in 2009 but added sometimes the use of consultants was “the best value for money option”.

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