Government courts top consulting firms over lucrative Brexit contract

28 April 2017

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.

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Manchester Mayor criticised for £250,000 consulting spend

19 March 2019

The Mayor of Greater Manchester has been criticised for splurging hundreds of thousands of pounds on consulting fees before determining that the region’s fire brigade must slash its budget by millions. Andy Burnham put more than £250,000 towards work from ten consulting firms as part of a review into the region’s emergency services.

Despite the continued argument that projects like the Northern Powerhouse initiative are helping to address the North-South divide in the UK, statistics still show that the North has borne the brunt of austerity in England. Northern English cities have been disproportionately affected, with their spending cut on average by a fifth since 2010, while cities in the south and east of England had average losses of 9%.

The impact of spending cuts has been keenly felt in Greater Manchester in particular, where local government spending has fallen by as much as £650 per person since 2009 in some parts of the region. As the area looks to find further savings, while the Central Government continues to fail to deliver on its pledge to end austerity, it has been announced that the fire brigade for Greater Manchester faces a reduction of up to £10 million from its budget.

The swingeing cuts to hit the emergency service would likely see its fleet of fire engines reduced from 56 to 47, while six fire stations face closure, and 113 support staff could suffer the axe. The news follows an investigation from Mayor Andy Burnham, which was triggered in part by the admission of Chief Fire Officer, Jim Wallace, that since 2015 the service has failed to deliver “its own efficiency plan”.

Greater Manchester Mayor Andy Burnham spent £268,300 to review the city’s fire service

The review itself has been far from inexpensive, however, and it has led some to accuse Burnham of hypocrisy. During the review of the fire service, which has delivered demands for the service to find major efficiency savings, the Greater Manchester Mayor reportedly splurged £268,300 in public funds on consulting work for his root-and-branch review.

According to local newspaper Manchester Evening News, Burnham tasked ten different consultancies with helping to compile the review, receiving payments ranging from £101,000 to £7,000. The largest amount was handed to Leicester headquartered P. Cooper & Associates for the expertise of a “senior change and transformation programme specialist,” while it was reported that another of the consultants gave “guidance on leadership and culture”.

A Greater Manchester Fire and Rescue Service (GMFRS) spokesman said of the spending: “The Programme for Change programme has required input from specialists who are expert in areas such as organisational transformation, operating models for fire safety and estates.”

Manchester’s fire brigade was criticised in 2017 when, in the wake of the Manchester Arena bombing, a report by Lord Kerslake noted crews had been held back from helping. Contrary to helping deliver a more efficient service, Unison has told the press that it believes the proposed cuts will make the residents of Greater Manchester “less safe”. With the expenditure of the review on private sector consultants now public, meanwhile, the union has slammed the report for throwing away public funds while jeopardising vital public sector work.

Unison represents the 113 staff who may lose their jobs, and a spokesperson for the union told Manchester Evening News, "It's disappointing that when finances are clearly tight, priority has been given to hiring external consultants rather than engaging with the workforce. This will be a shock to our members who were only told on Monday their jobs were at risk."

In recent years, a succession of local authorities have come under fire from officials and the general public for their consulting spending in the UK. Earlier in 2019, a freedom of information request by The Times revealed that local councils across the UK have spent around £400 million on consulting firms in the last year alone. According to the report, this represents a rise of more than a fifth since 2014, with critics using the figures to call into question the value added by engaging external expertise.

Commenting on the criticism many councils face, Tamzen Isacsson Chief Executive, Management Consultancies Association, said, “Consultants play a vital role in the public sector, [providing] transformational impacts, innovation and increased efficiency… Vital front line services continue to operate uninterrupted [while] consultants often help local authorities get better results with less money. As the MCA awards this year demonstrate consultants are delivering social benefits across the UK – from work on getting better outcomes for children in care to finding better processes for finding homes for vulnerable families in London these examples offer a true reflection of the consulting excellence that operates across the UK to the benefit of councils and the wider society.”