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Tuesday, February 07, 2023

No Limits

The Guardian reports that Tory Ministers have quietly dropped restrictions on spending controls, allowing Whitehall departments to spend millions more on external consultants.

They say that the limits were introduced under David Cameron in 2011, requiring central authorisation if contracts with firms such as Deloitte or KPMG lasted more than nine months or exceeded £20,000. The value of the contracts has been rising – with the limit earlier this year set at £600,000. But now those spending limits have been cancelled altogether, paving the way for department to spend millions more of taxpayers’ money on external advice:

The Cabinet Office minister Jeremy Quin and the chief secretary to the Treasury, John Glen, wrote to departments this month ending restrictions on consultancy “effective 31 January 2023 in line with the agreed lifting of burdens [and] realignment of focus and impact of Cabinet Office spend controls”.

The update concluded that “following workshops during January on an operational level, the removal of the controls is welcomed”.

The move was not announced, but changed on the guidance page of the Cabinet Office website, which said the spending controls on “consultancy and professional services” had ceased as a requirement. All government contracts worth more than £20m still require authorisation centrally.

The Cabinet Office says management consultant advice will be “time limited” and likely to be “related to business change or transformation”, and that the individuals employed on a consultancy basis “will operate outside of the client organisation’s structure and staffing establishment”.

Spending on outside consultants has soared in recent years, although some additional spending was connected to Covid. The UK public sector awarded £2.8bn of consulting contracts in 2022, according to data from the contract analysts Tussell Ltd in the FT last week. That figure was up 75% on 2019.

Deloitte was awarded contracts worth £278m in 2022, more than any other consultancy, though spending was down on levels during the UK height of the pandemic.

Others in the “big four” accountancy firms were also awarded millions in contracts, including £152m for PwC and £101m for EY. KPMG had withdrawn from bidding for work because of a series of scandals reported last year, but was still awarded contracts worth £12m.

I agree with Pat McFadden MP that this change is indefensible during a cost of living crisis when government purse strings were being tightened in other areas of public spending. No wonder there is no money for health workers and teachers.
This is appalling. But is there any sign that the Opposition will commit to restoring the limit?
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