EXCL Brexit creating 'gold rush' for private firms as Whitehall spending on consultants soars to £1.5bn

Posted On: 
16th May 2019

Ministers have been accused of overseeing a Brexit “gold rush” for private firms as official figures showed a sharp increase in government spending on outside consultants in the past year.

Labour's Jon Trickett told PoliticsHome that consultancy firms were 'cashing in at an alarming rate'.
Credit: 
PA

Government data released to Labour shows that ministers spent more than £1.5bn drafting in help from beyond Whitehall in 2017/18 – a 60% leap on the previous year’s figures.

The move comes despite a long-running government pledge to rein in the use of costly external consultants.

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In 2010, then-Prime Minister David Cameron described such spending as “outrageous” and brought in new rules to tackle a £1.68bn annual taxpayer bill for outside help.

According to the National Audit Office spending watchdog, that drive saw Whitehall's consultancy costs tumble to £346m by 2011/12.

But the latest figures - released following a parliamentary question - show that the amount of cash handed over to outside experts has again ballooned in the wake of the Brexit vote.

By 2016-17, departments and agencies were spending a total of £964m on consultants - with the figure soaring to £1.549bn by 2017-18, the most recent year for which data is available.

Shadow Cabinet Office minister Jon Trickett told PoliticsHome: "The Tories’ cuts and chaotic handling of the Brexit negotiations have created a gold rush for consultancy firms, who are cashing in at an alarming rate.

"But while the Tories ‘outsource’ the civil service, big business benefits from unparalleled access to the inner workings of government."

Mr Trickett promised that Labour would curb “the influence of large consultancy firms and give the civil service the support they need to do their job effectively and in the public interest" if elected.

But a Cabinet Office spokesperson said it was "long-established practice for government departments to draw on the advice of external specialists".

They added: "In preparing for the UK to make an orderly and successful exit from the European Union, we have equipped ourselves with the right people and the right skills."

A Whitehall source meanwhile confirmed that the increase in spending had come as a result of the Government stepping up Brexit preparations, with the contracts covering a host of areas including project management and commercial expertise.

'UTTERLY LUDICROUS'

However, the figures were quickly pounced on by the Public and Commercial Services union, which represents rank-and-file government officials.

The union's general secretary Mark Serwotka told PoliticsHome: "It is utterly ludicrous that the Government can find millions of pounds to pay consultants to carry out the work of civil servants, at the same time as allowing tens of thousands of civil service jobs to be lost since 2010."

And he added: “At the same time, ministers can’t find the money to pay our members a decent pay rise.

“These figures are a stain on this government’s already appalling record.”

Liberal Democrat Brexit spokesperson Tom Brake meanwhile said the "staggering" total was "yet more evidence of the torrent of cash being poured down the drain by the Conservative government".

He told this site: "They are making a mess of Brexit and wasting taxpayers’ money in the process.

"It is unacceptable that they consider this to be a good use of public funds when they have failed to properly invest in our NHS, our schools, or effectively tackle climate change."

According to the Cabinet Office, the five firms getting the most consultancy work by value in 2017/18 year were IT giant Leidos Holdings, defence firm BAE Systems, construction and facilities company Landmarc Support Services, defence and security contractor Qinetiq Group and engineering company CH2M Hill.

Ministers also tapped up consultants from Adam Smith International, McKinsey and Company, and PricewaterhouseCoopers for help in 2016/17, a parliamentary answer revealing that year's top five big contractors shows.