Inner-city developers spent 207m pounds on fees

URBAN development corporations have spent pounds 207m on hiring outside consultants - in spite of losing pounds 82m since they were set up by Margaret Thatcher to regenerate the inner cities in the late Eighties, writes Chris Blackhurst.

Consultants advised the corporations in places such as Manchester, Sheffield, Leeds, Bristol, Stoke and the London Docklands on buying and selling properties and job creation initiatives.

Answers from the Department of the Environment reveal a loss of pounds 82.5m on property deals, while a straight comparison with the numbers of new jobs created shows consultants costing as much as pounds 5,000 per job.

Bristol is the worst offender. The corporation has spent pounds 6.4m on consultants who have helped generate 1,300 jobs - at a cost of pounds 4,923 per job. Merseyside ran up a consultancy bill of pounds 24m, or pounds 3,107 for every new job.

By far the biggest employer of outside advisers was London Docklands, which spent pounds 52.7m creating 66,300 jobs.

These latest figures will further embarrass the Government, which has put great store in the flagship corporations, and add further weight to claims that taxpayers' money is being wasted on external consultants.

A provisional report by the Prime Minister's Efficiency Unit disclosing that Whitehall departments had spent pounds 565m on consultants to produce a saving of just pounds 10m in 1992- 93, has been seized upon by the Labour Party as evidence of government ineptitude.

Stephen Byers, Labour MP for Wallsend, who obtained the urban corporation figures, said they were further proof of the 'staggering scale of spending on private-sector consultancies'. He added: 'This is pounds 207m which should have been used to create jobs in our run-down inner city areas. Instead it is fat cats in the City who have benefited.'