MPs question firms' £25m Metronet bill
NAO to re-examine Metronet collapse after MPs questioned advising firms over £25m bill
Advisers are facing further scrutiny of the value of their public sector
work, after MPs called for the National Audit Office to re-examine the collapse
of tube upgrade company Metronet.
Research by Accountancy Age shows Ernst & Young,
PricewaterhouseCoopers and KPMG have earned almost £25m from advising on
Metronet, which may be further scrutinised in a possible NAO probe.
The National Audit Office is considering requests from MPs to investigate the
consortium’s collapse. The NAO has received a written request from shadow
transport secretary Theresa Villiers to investigate Metronet, including the fees
paid to advisers, and is currently considering whether it should proceed with an
enquiry.
Twickenham MP and Lib Dem Treasury spokesman Vince Cable said: ‘The
government paid more than £500m to accountants and other consultants over the
PPP agreement. Now that this agreement has collapsed we must ask where all that
money has gone.’
A probe would not be the first time the government has looked into the issue,
but it could raise damaging questions about consultants’ work for the public
sector. There is no suggestion that any of the three firms have done anything
wrong.
According to figures submitted to the Public Accounts Committee in June 2004,
PwC, as the lead financial adviser to the London Underground ahead of the Public
Private Partnership (PPP), earned £21.4m.
KPMG earned £2.4m for auditing public sector methods for assessing the value
of the bids for the tube contract for London Underground.
Ernst & Young earned approximately £1m for advice to both London
Underground and the Department for Transport, separate parliamentary records
reveal.
Both KPMG and E&Y are set to earn further fees from the issue too. E
&Y’s Alan Bloom appointed as administrators last week and KPMG are advisers
to the PPP arbiter.
Metronet was plunged into administration last week when the PPP arbiter
refused to grant the consortium’s request for £551m in emergency funding.
None of the firms would comment on a possible probe.