Spiralling consultant costs fail to deter big-spending Whitehall departments

Government departments are continuing to spend millions of pounds of public money on consultants for projects despite warnings over spiralling costs.

Figures released by three of the largest Whitehall departments in response to a series of parliamentary questions by the Conservative Party show that big consultancy firms are earning millions from working with the government.

The Department for Work and Pensions spent £10.1m with business services firms KPMG, PricewaterhouseCoopers, Ernst & Young, McKinsey and Deloitte between April 2007 and March 2008. This was on a variety of projects, including paying Deloitte £417,348 for work on a new HR operating model.

In the financial year 2006-07, the Home Office spent £148m across its corporate headquarters and agencies. In total, £26.3m of that went to the five named consultancy firms. In addition, the department spent almost £70m on agency staff in 2006-07.

Last year, a highly critical report by the Public Accounts Committee accused departments of forking out billions on consultants without monitoring their effectiveness. The committee said departments were hiring consultants before checking whether in-house staff had the skills to do the job.

Responding to the questions, Home Office minister Liam Byrne said: “The use of external consultants provides the department with specialist knowledge, skills, capacity and technical expertise that would not otherwise be available.”

The Ministry of Justice, which was only established in May 2007 by prime minister Gordon Brown, spent £5.5m on consultants in the three months after its formation to September 2007.

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