Cork City Council under fire for €35 million external consultant spend

30 August 2017 Consultancy.uk

Cork City Council spent almost €4.5 million on consultants each year from 2009 to 2016. The figure, which has been described as ‘incredible money’ by one former Lord Mayor, comes as the local authority look to plug gaps left by austerity layoffs which have left permanent staff depleted, part of a growing trend across Ireland and the UK.

According to records released to the Irish press under the Freedom of Information Act, Cork City Council spent a total of €26.3 million on external consultants between January 2009 and June 2016. The consultants, which included architects, communications companies, engineers and legal experts, were hired for 1,145 separate projects between 2009 and 2015, at an average expenditure of more than €22,000 per job.

Projects ranging from huge streetscape changing projects like Kent Station and Blackrock village, to smaller one-off payments such as training, management or marketing events were staffed by professional service outsourcers, while the City Council remained depleted following a sustained period of austerity which began as the global financial crisis hit the Irish economy over the past ten years. Cork’s local authority came close to abolition in 2014, as opposition councillors of Sinn Féin and the Anti-Austerity Alliance bid to scupper planned spending cuts, however the government did not take action as Fianna Fáil and Fine Gael steered through proposals by 17 votes to 12. The vote saw funding for Cork City down from €165 million in 2014 to €152 million in 2015, on the grounds of maintaining any form of local governance and avoid being taken over by an external commissioner.

However, the cuts had a severe long-term on the council which remains unaddressed. With huge numbers reportedly leaving the organisation over recent years due to the impact of the austerity drive, former Lord Mayor, Councillor Terry Shannon, was critical of the spend, noting that it takes money “off the frontline”, something that does little to change the council’s predicament of short-staffing and talent retention. Shannon said, “We have a major problem of brain drain and a loss of experience at City Hall. You are looking at hundreds of staff leaving the organisation over the last number of years. Most of these have not replaced due to the embargo on hiring and those who have are replaced by people who do not have the same level of experience."

Cork Council spent €35 million on external consultants in past eight years

While the hiring embargo has recently been lifted for 'strategic staff', with the likes of the housing directorate given approval to hire, there is still a general shortage across the board, and while in the short-term, the council is under pressure to invest in talent for a more stable long-term picture. Shannon also called on the local authority to be more prudent in sourcing contractors for jobs. "The idea of spending more than €4 million each year on consultancy spend does not sit well with me," he said.

The documents released under Freedom of Information request were meanwhile accompanied by a statement from City Hall officials, who attempted to defend the figure to elected members, noting that it is just a small fraction of total Council spend over the period. Over the same period, Cork City Council stated it had spent a total sum of €1.7 billion, of which the consulting spend amounted to 1.42%.

Controversial consulting

Consulting and professional services have continuously made the wrong kind of headlines in Ireland over the past year. Earlier in 2017, it emerged that the bill for consultants, liquidators and lawyers involved in the winding-down of the Irish Bank Resolution Corporation (IBRC) amounted to €215 million in the 47 months leading to the end of 2016, with the Irish arm of multinational consultancy KPMG receiving a total of €130 million for its role in the proceedings. A number of Irish firms also became embroiled in the Panama Papers scandal of 2016, in which consulting and audit advisories were alleged to have assisted wealthy individuals and corporate players with the avoidance of tax.

Spending by most government departments on consultancy services across the whole of Ireland has come under increasing scrutiny in recent months meanwhile. According to a breakdown of budgets for 2017, Ireland’s Civil Service budget allocation for “consultancy services, value-for-money and policy reviews” will rise by 15% to almost €10.5 million, including consultancy spending relating only to core Civil Service administrative functions, which remain spread thin following austerity cuts, the Department of Public Expenditure explained. As with Ireland, the UK government’s spending in order to patch over holes left in its Civil Service has steadily elevated. Whitehall’s spending on private consultants and temporary staff rose by between £400 and £600 million since 2013 according to National Audit Office figures.

Similarly to Cork meanwhile, British councils have also come under fire for a climbing professional services spend. St Albans City and District Council spent £1.2 million on consultants in 2016/17 according to a report to its Cabinet, as the authority attempted to cover for depleted talent due to spending cuts. The bill for external experts was £439,000 more than the previous year, with the increase matching a national government trend.

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