PracticeAccounting FirmsGovernment spends £100m with Big Four

Government spends £100m with Big Four

Research designed to reveal whether the Big Four is far too close to central government has already uncovered £100m of spending with the firms from just a fraction of Whitehall.

Link: DTI investigates Big Four ‘monopoly’

The research – based around a series of parliamentary questions to government ministers – has been triggered by backbench concern about the dependence of Whitehall on advice from the Big Four firms.

So far questions to eight departments show that since 2000/01 government departments have spent £37m on PricewaterhouseCoopers, £25m on Ernst and Young, £41m on Deloitte and just over £10m with KPMG.

Ironically, the figures reveal the Treasury is responsible for spending more than £7m alone on E&Y – the very firm targeted by the department because of its marketing of aggressive tax avoidance schemes.

Indeed it is the government’s current examination and concern with tax avoidance schemes, along with its impending decision on whether to provide more auditor protection through a liability cap, that has prompted concern among MPs.

Jim Cousins, the Labour backbencher who is tabling the questions, said: ‘I am concerned about the degree to which government has become dependent on the Big Four for advice and the extent to which that sets up possible conflicts that might affect decisions on issues like tax avoidance schemes and auditors’ liability.’

A spokesperson for the Cabinet Office said there was no cross-government policy on the Big Four and that it was up to individual departments.

KPMG said work was won from central government on a competitive basis.

Deloitte said: ‘We do not believe that there is undue influence exerted on central government.’ PwC said all its work was carried out under the proper procurement rules. Ernst & Young was unavailable for comment.

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