Government Brexit panic sparks £1.6 million consulting feeding frenzy

31 October 2018 4 min. read
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A collection of consultancies have cashed a £1.6 million cheque in public funds for a single month of government contracts relating to Brexit preparations. The exact nature of the work remains a mystery, as the Cabinet Office has refused to clarify the matter, however it is speculated that it relates to No Deal plans, as the UK struggles to secure a viable exit accord with Brussels.

In the long term, complicated border tariffs and a likely shortfall of talent from the continent are expected to have a negative impact on the consulting industry, should a No Deal Brexit come to fruition in March 2019. In the meantime, though, the UK’s protracted withdrawal from the European Union has proven to be something of a cash-cow for the professional services world. According to Buzzfeed News, at present the UK Government has signed up to more than a dozen consulting contracts on the matter, which are worth around £40 million to help get ready for Brexit, including a large bulk of that being spent on a new ‘settled status’ scheme for EU citizens living in Britain.

McKinsey & Company – one of the three largest strategy consultancies collectively known as the ‘MBB’ – in particular has picked up multiple contracts from the UK Government, Whitehall and HMRC as the understaffed public sector has struggled to cope with the workload. In 2017, the Brexit department picked McKinsey for a £1.9 million consulting contract to help the Civil Service complete the implementation of nearly 800 Brexit-related plans, as well as a £680,000 payday to help the UK’s tax authority with plans for post-Brexit taxation mechanisms.

Government Brexit panic sparks £1.6 million consulting feeding frenzy

Other members of the MBB have likewise enjoyed a glut of work from the process. The Boston Consulting Group (BCG) landed a £2 million contract with the Brexit department earlier in 2018, and now new figures released by the Cabinet Office have revealed that the firm made a further £750,000 over three separate payments for helping civil servants co-ordinate arrangements for the UK’s exit from the EU. Bain & Company enjoyed the same yield from a similar agreement, while Big Four professional services firms EY and Deloitte made £178,312 and £486,473 respectively. British firm PA Consulting, which specialises in public service IT work, received £220,000 for its work.

While this is not particularly surprising, given the amount the UK Government has already admitted to spending on consulting work during the Brexit process, what does stand out about this instance is that the total £1.6 million splurge is suspected to have come in the space of just one month. While the Cabinet Office issued a denial of this, instead saying it related to “more than one month”, a spokesperson also refused to clarify to the British press on the exact nature of the work carried out, but the figure is believed to have been spent on new systems to be used in the event of a No Deal Brexit.

The spokesperson explained, “The contracts cover skills that are needed on EU exit preparation and implementation to allow the widest scope for departments to secure the capability they need, including commercial, operational, programme and project management.”

The spending is the latest No Deal preparation taken by the Cabinet Office, having created an “exit capability team” earlier in 2018, believed to be co-ordinating border contingency planning and helping create a database for logging shipments of live animals and animal products. All this suggests that, despite Brexit Secretary Dominic Raab's insistence that negotiations would conclude by the end of October and PM Theresa May's claims a deal was “95% settled” with less than half a year before the deadline, the Government is now scrambling to prepare for both of these assertions being proven wrong.