Government courts top consulting firms over lucrative Brexit contract

28 April 2017 3 min. read
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The UK governmental department overseeing Britain’s exit from the European Union is in the process of hiring a consultancy firm to help realise a required overhaul of post-Brexit infrastructure, including customs and immigration procedures. 

In the wake of Conservative Prime Minister Theresa May’s decision to trigger Article 50 at the end of March, the Department for Exiting the EU has launched a £1.5 million tender for a management consulting firm able to oversee strategic Brexit-related activities over the next six months, handling as many as 792 related plans.

According to the Financial Times (FT), Britain’s civil service, which has seen its headcount depleted by around a quarter in under a decade due to governmental austerity plans, is severely stretched by the current demands of Britain’s lengthy separation from the EU, and needs outside support. Government ministry Dexeu, led by Brexit minister David Davis, is expected to offer many further contracts after this initial vacancy has been filled, as Whitehall commissions the private sector to assist over the two year process of negotiation and reform.

Speaking to the FT, a Defeu representative commented, “as you would expect the department continues to develop its systems to deliver a smooth and orderly exit from the EU . . . We will continue to ensure the department is properly resourced to do that, including contracting specialist expertise where necessary.”

Government courts top consulting firms over lucrative Brexit contract

During the lengthy deal-making process, the government projects it will need at least an extra 700 members of staff throughout – in part in response to a recent National Audit Office (NAO) report stating that, as a result of spending cuts, Whitehall were unable to meet the growing demands the civil service faced in this period of radical structural change. Those claims arose in spite of the revelation that last year, it emerged government spending on private consultants and temporary staff had risen by between £400 and £600 million since 2013. The NAO found that the government spent £1.3 billion in 2015 on consultants, with the largest suppliers being the Big Four firms PwC, Deloitte, KPMG and EY, as well as UK headquartered PA Consulting Group and American strategy giants McKinsey & Company and The Boston Consulting Group.

A number of those firms are already in the picture for this latest project, with consultancy companies KPMG, EY and PwC already understood to have made significant bids for the contract. Rival Deloitte meanwhile, ruled themselves out of the running for any governmental contracts in the next six months, having initially been reported by a number of UK sources as being in the hunt. Their withdrawal from the process comes after a leaked memo for “internal use” from the company claiming that the government had no “overall negotiation strategy” for Brexit. Last month the controversy caused Theresa May’s office to release an unprecedented attack on Deloitte, claiming the firm was “touting for business” through “unsolicited” analysis. Deloitte’s Chief Executive, David Sproul, has since apologised.