Big4 under fire after free advice to British government

17 October 2012 Consultancy.uk

The Big4 accountancy and consulting firms have come under fire in the United Kingdom after the British newspaper The Guardian uncovered that the firms have donated more than €2 million to political parties since 2009. The scale of Big4 involvement with parties raises concerns about how they might influence government policy as they simultaneously work with almost all of the largest companies in the country.

The newspaper revealed that Deloitte, Ernst & Young, KPMG and PwC have given donations of “staff costs” worth €1.5 million and consultancy work totaling almost €500,000 to political parties. The work was provided to nearly all of the main political parties in the UK.

Handshake with money

Analysts and officials in dismay

Several prominent government officials and economic analysts reacted in dismay following the news. Andrew Simms, responsible for the New Economics Foundation think-tank, said: “Conflicts of interest are built into the very DNA of the big professional services firms”. According to Minister Austin Mitchell, the Big4 are “more powerful than government”. He said the companies are allowed privileged access to government just because of their financial power. “They are the only ones who can afford to offer staff for free” he said.

Free advice not uncommon

It is not uncommon that consulting firms provide clients “free services”. IBM has been providing free consulting services to hundred cities around the world for the past three years. For this, the IT service provider has set aside a budget $50 million. Nevertheless, there is a delicate balance between providing free advice and the return a firm expects. In the case of the Big4 in the UK, the suspicion arises that the firms are using free services as a means to influence decision-making within the government.

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