Gov eyes more than £800m in public-sector consultant savings

Government could save up to £810m by making better use of consultants, says the National Audit Office (NAO).

Public-sector spending on consultants rose by one-third over the past three years, largely due to NHS spending and the hiring of IT and programme or project-management help.

In the 2005-06 year, central government spent £1.8bn on consultants while the public sector as a whole spent £2.8bn, according to figures from the NAO.

But the NAO believes the money could go further through the smarter use of consultants. It is aiming for efficiency gains of 15 per cent this year and up to 30 per cent within three years, which could save the public sector a total of £810m.

When hiring consultants, currently most government departments don't determine whether in-house staff could be used instead, don't properly judge consultants' performance and don't transfer skills from consultants to internal staff, according to the NAO.

The NAO says public-sector organisations should change these behaviours and use more in-house staff, negotiate better contract terms and hire consultants to bring internal staff up to speed on areas where there are skills gaps.

Sir John Bourn, head of the National Audit Office, said central government has made progress in its use of consultants but still has room for improvement.

He also called for public-service organisations to start weaning themselves off consultants.

"Departments need to think ahead about what skills they should have, so they don't have to rely on consultants year after year. They should examine whether they really need to use consultants quite as much as they do, a move which could release substantial sums for frontline services," he said in a statement.