What price a secret when Whitehall’s favourite consultant is sold to the US?

Parliamentary Business: The deal raises questions about overseas companies potentially having access to state secrets

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The Independent Online

Did you know that PA Consulting helped UK Trade & Investment –the government agency that helps British companies in overseas markets – boost exports by £13bn between 2011 and 2014? 

Did you know that PA Consulting advises on the Ministry of Defence’s biggest projects, such as helping officials save £350m in just two years on a maintenance programme for a fleet of 11 submarines? 

Did you know that PA Consulting has helped with NHS reforms, the introduction of fare collection across London’s transport network, and saving councils money in providing their essential services? 

Have you even heard of PA Consulting before this week? 

Serco, the outsourcing group, was supposed to be the most important company you had never heard of before it hit the headlines over the electronic tagging scandal – you know, when it claimed taxpayer money for tagging offenders who were either in jail or dead – and fell spectacularly from grace. 

All along, however, that title really belonged to PA, an employee-owned, London-based management consulting group founded by three Englishman during the Second World War. Today it employs more than 2,500 experts around the globe in sectors ranging from life sciences to manufacturing. 

PA is one of the Government’s go-to consultants – and one that amazes even its rivals for the variety and scale of public sector work it undertakes. 

Back to that last question. Unless you have worked with the company, you might not have heard of PA until a few days ago, when it emerged that the US private equity giant Carlyle is to take a 51 per cent stake in the business. 

With a turnover of £423m in 2014 and a profit of £53.3m, PA is not one of the biggest companies around, but its work forms a web through and between the great, and not so great, Whitehall departments. 

The consultancy is privy to all manner of sensitive information, particularly in defence. UK Trade & Investment workers joke about how PA, in effect, runs this key plank of Britain’s export strategy. 

I have nothing against Carlyle. The former prime minister Sir John Major joined its European advisory group in 1998, a year after losing No 10 to Tony Blair. So it has shown plenty of interest in our politics for the best part of two decades. 

Carlyle’s British trophies include RAC, bought for £1bn from the insurer Aviva in 2011, and private cab group Addison Lee, which cost nearly £300m two years ago. 

PA is an altogether different beast and the deal raises questions about overseas companies potentially having access to secret and sensitive state information. This is, of course, nothing new, given how much of our defence and nuclear work is already outsourced to US engineers such as  Bechtel and Aecom. 

Even allowing for that, I’ve been surprised at the lack of concern expressed over this deal. PA’s managers will have to make sure proper safeguards are in place to stop information leaking overseas, and this is no easy task; company executives and government officials always struggle to explain how Chinese walls work, for the simple reason that they are built on trust as much as secure IT accounts. 

Margaret Hodge irritated a lot of people by seemingly never being out of the newspapers in her five years as chair of the Public Accounts Committee. The MP was undoubtedly a self-publicist until she stood down from the committee at the election, but she was also incredibly effective, famously taking Google, Starbucks and Amazon to task over tax avoidance.  

“We’re not accusing you of being illegal, we’re accusing you of being immoral,” was one of her politer comments to top executives from those groups. If she were chairing the committee now, you know she would have put this deal in the headlines. 

Well, Carlyle is not being immoral and there’s no suggestion it will do anything wrong. It has spotted a great opportunity. PA is a company of previously unrecognised clout and experience, perhaps even outrageously overlooked and under-rated. I’m sure the buyout barons from Carlyle will make an awful lot of money from the deal one day soon. 

However, if we are to award consultants so much work across the public sector then we must seriously consider adding clauses that give the Government the right to investigate should they be subjected to overseas offers – before these deals are cleared. Otherwise, we must review those contracts that the company holds with the Government – which, if rescinded, would presumably put an end to any takeover anyway. 

It’s not an easy issue to deal with given that there is a risk of sounding jingoistic and our economic fortunes stand or fall on the principle of being an open market, welcoming of overseas capital. 

But with more and more of Britain’s services contracted out as the Government looks to shrink the state – an issue, by the way, that Jeremy Corbyn unexpectedly failed to get his teeth into at the Labour conference this week – such checks and balances will become increasingly important. 

Public sector consulting is set to boom until the 2020 election at least, and the Government must redouble its efforts to make sure that our most important data and secrets stay in British hands. 

Twitter.com/@mleftly 

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