"Although total spending on consultants has fallen in
recent years, this is not the result of effective management and
control. Departments need better information and skills in order to
achieve good value for money from their use of consultants. They
need to do more to integrate their decisions to use consultants
within their wider workforce planning; define the services
required; know how the consultants' work is contributing to
departmental objectives; and evaluate performance during projects
and assess what benefits, if any, have been
delivered."
Amyas Morse, head of the National Audit Office, 14
October 2010
The amount of money being spent by government on external
consultants has fallen slightly since 2006-07, according to a
National Audit Office report published today. However, government
is not getting value for money from its use of consultants because
it often lacks the information, skills and strategies to manage
them effectively.
Today's report, which focuses on 17 central government
departments, finds that in 2009-10, these departments spent over £1
billion on consultants and interim managers (temporary replacements
for permanent staff). The departments spent approximately £904
million on consultants in 2006-07. Spending on consultants fell by
£126 million in 2007-08, but since then has remained broadly
constant, totaling £789 million in 2009-10. Some of the fall in
spending up to 2009-10 is likely to be due to increased accuracy in
the recording of costs rather than improved control by management,
suggesting that some of that reduction in spending is not
sustainable.
Limited and inconsistent progress has been made against
recommendations made in previous NAO and Public Accounts Committee
reports. The quality of departments' management information on
consultants and interims is poor. Few departments can provide
information on their spending by type of consultancy, the number of
interims employed, or interims' roles and length of contracts.
Departments do not always follow best practice when buying and
managing consultancy and interims. The price that departments pay
is often based simply on time spent on a project, rather then being
fixed in advance or related to the achievement of specific
objectives. Most departments do not assess the performance of
consultants or whether the work done was of benefit.
In May 2010, the government introduced changes to the approval
process for consultants and restrictions on recruitment, including
interims, and this has helped to challenge their use. However, this
is a short term impact and as a longer term strategy it could lead
to the displacement of costs elsewhere. It needs to be built upon
to deliver a sustainable approach to structured cost reduction.
Publication details:
HC: 488, 2010-2011
ISBN: 9780102965490