KPMG in crony row

KPMG has come under renewed fire over alleged cronyism with the Labour Party as concerns grow over the number of government contracts awarded to the firm.

Tory MP David Ruffley this week demanded departmental ministers list the work KPMG has performed for them.

He has also asked for details of fees paid to KPMG, and of work carried out by the firm for the Tory government before the 1997 general election.

Ruffley hopes to use the answers to his parliamentary questions to show that the firm’s links with the government has secured it more contracts than other Big Five firms.

KPMG has won a number of high profile government contracts since Labour came to power. It is acting as adviser on the privatisation of British Nuclear Fuels and was also chosen to report on the future of the Tote, the state-owned betting service.

The defence ministry and trade and industry department have also used the firm.

A KPMG spokesman this week denied allegations of financial favouritism, emphasising that all KPMG government contracts had been won through competitive tendering processes. He admitted the firm had won a number of high-profile contracts, but said these were in areas where KPMG had recognised expertise.

He also defended the firm’s employment of Labour peer Lord Bassam, used as a government ‘fixer’ by Tony Blair.

Bassam has reportedly been at the centre of the controversy surrounding KPMG’s share of government contracts.

The spokesman said: ‘Bassam is useful to KPMG because he can give the firm an insight into government thinking. We use him for parliamentary monitoring and have not used him for lobbying or in the tendering process.’

KPMG came under attack last summer for using LLM, the controversial lobbying company involved in the ‘cash for access’ scandal. It said this week it still employed the lobbyists, who were hired in December 1997 and have been credited with a ‘rebranding’ of the firm in government circles.

‘We continue to use LLM as a parliamentary monitoring service. They are not lobbying on our behalf,’ said KPMG this week.

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