Watchdog defends spending position as costs double

Watchdog defends spending position as costs double

Rise in consultancy costs are key to efficiency drive

The Whitehall watchdog charged with overseeing Gordon Brown’s efficiency
drive, and cutting over 100,000 civil service jobs, has defended its escalating
external consultancy spend following criticism by unions and opposition parties.

A spokesman for the Office of Government Commerce told Accountancy
Age
that it needed an additional raft of management consultants over the
next two years to carry out the efficiency drive ‘across government and not
simply within the OGC’.

‘We have been accused by some of seeing the spend on consultants rocket when
we are supposed to be cutting civil service jobs, but the OGC is charged with
implementing the review over the whole of government.’

The department, a satellite of the Treasury, has expanded rapidly after
almost doubling its spending on external consultants. Expenditure has risen from
£5.8m in 2003/04 to £9.2m in 2004/05 – nearly a quarter of its budget for the
next two years.

Public and Commercial Services Union general secretary Mark Serwotka said the
increases were the latest evidence of ‘faceless consultants lining their
pockets’, and that they would be of ‘little comfort for the tens of thousands of
civil servants who face the axe’.

George Osborne, the shadow chancellor, said that the OGC was intended to be
‘the driving force in reducing costs in relation to Whitehall bureaucracy’. He
added: ‘Now it turns out that its own consultancy bills are soaring. It is a
classic case of the pot calling the kettle black.’

The OGC spokesman said the body ‘needed’ to buy in the expertise required for
the period of the review – to run until 2008. ‘It makes no sense to buy in
permanent civil servants when we are reducing their numbers.

‘Our prime responsibility is to help save £21.5bn of public expenditure
annually by 2007/08. The review is not about cutting jobs, but making the
government more efficient by use of better project management and better use of
IT. We are bringing in consultants and spreading them across government, but the
figure is reflected on us and not across the board.’

The consultants hired come from four companies. The largest is KPMG, while QI
Consulting, Cornwell Management and Mott MacDonald are also involved in various
projects.

The OGC spokesman added that the department’s budget was ‘self-capped’ at
£43m for the next two years and that any expenditure on external help would be
‘budgeted within that’.

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