Letter: Cost of Government consultants

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The Independent Online
Sir: The leaked Cabinet Office Efficiency Unit survey (report, 27 April), showing that the savings from the use of consultants last year ( pounds 10m) were less than 2 per cent of the cost of employing them ( pounds 565m), blows apart the Government's whole market-testing programme, which is supposed to be about cost-saving.

William Waldegrave said that 389 exercises in market-testing (the first stage in contracting out) had been completed as part of the privatisation programme in Whitehall by 21 December last year, and more than half were won by outside contractors. What he did not say is that not only the objectives of the programme, but also the terms of competition, are thoroughly improper and unfair.

There is no level playing field for in-house teams. Some civil servants are excluded from bidding altogether by ministerial diktat. Others have to include the costs of maintaining assets such as buildings and equipment, while the private sector is allowed to spread the costs over 10 years. Under the first stage alone of this privatisation programme, 45,000 civil service jobs have been put at risk. Civil servants are therefore forced to dispense with hard-won conditions of employment in order to come in with the lowest tender.

There must also be serious worries over conflicts of interest in the choice of consultants advising on this process. In the case of the Warren Spring industrial research laboratory, for example, PA Consulting was awarded a contract worth pounds 100,000 without any competitive tendering whatsoever, to review its work. PA Consulting has explicit expertise in environmental research and could therefore be construed as a direct competitor of Warren Spring. As a result of its report, there was a ministerial decision to close the Warren Spring laboratory and create a national environmental technology centre at the Atomic Energy Authority, which is itself a candidate for privatisation.

Mr Waldegrave claims that pounds 100m a year is saved through the market-testing process. But he persistently refuses to explain how this figure is calculated, either because the information is (he says) confidential or because preparing an answer would be disproportionately costly. Or is it simply because there has been no net gain in efficiency at all, only a haemorrhage of jobs and a worsening of the terms and conditions of those that are left?

Yours sincerely,


House of Commons

London, SW1

The writer is Labour spokesman for Public Service and Science.