By Steve Ranger, 6 June 2005 15:05
NEWS The government is spending too much on an army of consultants when the money should be spent on front-line services instead, says one union.
In the 2003 to 2004 financial year, the government spent at least £1.4bn on consultants to advise on a variety of projects - up from £986m in the previous year, according to research from the GMB union.
The GMB said that at the average rates of pay for consultants this means the government is employing an army of 27,093 private consultants per year.
The biggest spenders included the Department of Work and Pensions which spent £307m, the Highways Agency in the Department of Transport which spent £277m and the Ministry of Defence which paid out £251m.
Other big spenders included The Department for International Development (£213m), the Home Office (£74m) and the Learning and Skills Council (£70m).
GMB acting general secretary Paul Kenny said: "These figures show that the tax payer is paying far too much for management and consultancy advice. There is scope to save money on these consultants and to spend the money instead on the front-line public services. The culture of continual reorganisation in the public sector is creating a field day for consultants."
Last week the government reopened the bidding on framework contracts for IT consulting companies looking to give advice on big technology projects.
Comments
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1. anonymous
Yes, everybody knows its true. The best solutions are developed over time with actual users all pulling in the same direction. Remember the consultant role is to advise on new approaches and the change required to get there. The employee role is to develop and maintain the system and improve its efficiency. The real challenge is whether any government body would be brave enough to pay salaries to attract the required employees. I fear we will have politicians that continue to follow the advice of advisors rather than take considered decisions about the business of running the country.
2. Mick James
More voodoo economics from the trade union movement.
Paul Kenny claims: "These figures show that the tax payer is paying far too much for management and consultancy advice." Actually the figures show nothing of the sort--they simply show that certain amounts have been spent. Whether they achieved value for money or not would require some analysis of the figures beyond using the "+" button on a pocket calculator.
Secondly, the sums mentioned don't just cover "management and consultancy advice". The GMB research lumps together infrastructure projects, consultants and contractors willy-nilly. The projects listed on the GMB website include things like "heating services to prisons"--sounds pretty front-line to me!
Dividing a total consultancy spend of £1.4bn by average consultancy income to come up with an "army" of 27,000 consultants is also mathematical nonsense, dividing the cost of apples by the number of pears to find out how many plums you've got.
Actually the GMB missed a trick here--consultants charge for time and materials and add a hefty margin, so you get far fewer consultants for your £1.4bn. But that might focus attention on the fact that, expensive as they may have been, these consultants have at least all gone away now. They're not going to hang around Whitehall until they're 60 and draw generous publicly-funded pensions while the rest of us work till we're 80 to pay forit all. On this view, consultants come pretty cheap compared to civil servants.
3. Alfred Reading
Mick James's comment on cheap consultants and expensive civil servants does not line up with my experience. I headed a team of engineers in the civil service but because there were far too few to do the work consultants were employed to fill the gap. The main work done by consultants was of type done by civil servant engineers at two grades below me but their salaries were about equal to mine before the overheads were added. Since the consultants had to spend time at our expense learning the type of work and standards required they were much more expensive. If I could have spent the some of the funds on better pay instead of consultants I could have recruited more staff and still saved the country money. If pension benefits are so marvellous, why is it that we could not persuade enough potential recruits that they would be better off in the civil service?
4. Mick James
You've pretty much nailed the root of the problem here: public sector pensions have too long been a way for governments to pass public spending on to future generations in the form of deferred salaries.
These days people prefer to have control over their destiny--and a bit of cash to spend. Public sector work can now only attract people with a very low-risk profile (who then become even more risk-averse). The pension cushion should be abolished and salaries raised to a level where people can move flexibly between the public and private sectors. Unfortunately flexibility in job markets is not something unions like the GMB understand, preferring to maintain a vast empire of impoverished and embittered members than represent a smaller number of better-paid professionals. If the GMB was serious about improving members' living standards it would get behind programmes for eliminating public sector waste as identified by the Gershon Review (£25bn), James Review (£35bn) or even the Taxpayers' Alliance (£81bn). Instead it condemns these as "back of a fag packet" exercises while conducting its own dodgy maths on the spit in the ocean that is spent on consultancy.