Civil Service departments spent almost £63 million on consultancies from 1994 to 1996 but appear to have paid little or no attention to the cost-effectiveness of the work involved, the Committee of Public Accounts has heard.
The Comptroller and Auditor General, Mr John Purcell, told the committee yesterday that a survey of all departments for the years in question showed 983 consultancies commissioned at a cost of £62.7 million. More than half of the total cost was accounted for by seven major consultancies, while more than half the number of consultancies cost less than £10,000 each and made up only 3 per cent of the total cost.
Of 34 projects examined, Mr Purcell reported, not a single one had a formal written business case setting out the objectives, expected benefits, or estimated cost of the consultants' work. Only 17 of these had activity plans for the delivery of objectives, and in two thirds of these the work was completed late.
Furthermore, while Mr Purcell noted that the best way to control costs was to have fixed-price contracts, "the survey showed that cost overruns occurred in 36 per cent of consultancies costing between £100,000 and £1 million, although the departments concerned regarded the contract as being on a fixed-price basis".
In three cases, the overrun was more than £100,000.
The Secretary General of the Department of Finance, Mr Paddy Mullarkey, accepted the criticisms, but said a number of steps had already been taken to ensure greater value for money in the use of consultancies. These included the establishment of a central database of work performed by consultants.
The growth in the use of outside experts mirrored the changes taking place in the economy generally, he added, and centred on areas such as information technology, where skills quickly became obsolescent.
But the use of consultancies was criticised severely by Mr Michael Bell (Labour). Calling the £63 million expenditure "the joke of the century", he said it amounted to a "vote of no confidence in senior management in the Civil Service".
He asked Mr Mullarkey if he agreed with the opinion of a civil service trade union leader who had said consultancies were a waste of money. In reply, Mr Mullarkey said he noted that the Comptroller and Auditor General's report had not concluded that consultancies were bad value, and he added that there was no evidence to suggest the use of consultancies was greater in the civil service than in the private sector.
Mr Sean Doherty said it was his experience from a long career in politics that many consultants' reports did no more than gather dust on shelves. Mr Mullarkey said all reports were studied and "in the vast majority of cases acted upon" by the relevant departments.
