Labour - the spin trade's political wing

Private sector contracts are as lucrative as under the Tories, writes Stephen Castle

WHEN David Hill, one of Tony Blair's top spin doctors, last week joined forces with Margaret Thatcher's favourite PR man, Sir Tim Bell, it was the latest in a line of Labour defections to the private sector. It will not be the last.

Behind this venture lies a hard economic fact: public relations and other consultancy is a multi-million-pound business under Labour - as lucrative as it was under the Conservatives.

Malcolm Bruce, the Liberal Democrat treasury spokesman, last week released parliamentary written answers showing spending on consultants of all varieties by Labour was roughly consistent with that of the Tory years.

This year, the Department of Transport, Environment and the Regions will spend pounds 13.41m on external consultants; its agencies, pounds 3.38m, and non-departmental public bodies pounds 34.59m. The Department for International Development will spend pounds 1.1m.

Partly as a consequence, most lobbyists and public relations firms now have at least one ex-Labour insider. They include Colin Byrne, a former Labour chief press officer, at Shandwick; Derek Draper, an ex-aide to Peter Mandelson, at Prima (due to merge with Market Access); and Simon Crine, an ex-Fabian, at ACPO.

They are probably good value for money. One government official last week described internal agonising over a PR company's pounds 170,000 pitch for a government publicity campaign. But this is at the top end of the financial range - work is more typically worth in the region of pounds 20,000.

According to "Guidance on the Work of the Government Information Service", ministries considering the use of PR consultants should be guided by questions such as: "could it [the task] be carried out by the Government's own employees?" and can it "be justified as a cost-effective way of reaching the target audience?" All projects worth more than pounds 90,000 have to be advertised publicly for tender.

Often the contracts, although from public funds, are awarded through agencies at arm's length from government departments. For example, when Shandwick organised press and publicity for last week's European audio- visual conference in Birmingham, half the funding was provided by the Department of Culture, Media and Sport. Mr Byrne, of the firm's directors, said: "It is entirely legitimate for government to do that if it means that departments do not have to build up banks of press officers for a campaign or project which lasts only a few months."

Other recent contracts include one from the National Health Service Equal Opportunities Unit that employed Fishburn Hedges to promote a speech by the Secretary of State for Health on equal opportunities. Ron Finlay, director of Fishburn Hedges, argues: "Under the Conservatives the big money in PR was for privatisation. Outsourcing is different in kind because of the different political hue of the Government, but the approach is pretty similar."

For the lobbyists and consultants this, of course, is just the tip of the iceberg. Most of the real money comes from advising the private sector - about how to present itself to government.