British Business Bank hires Deloitte, KPMG and PwC

17 June 2020 4 min. read

Three of the Big Four accounting firms have won contracts to support the British Business Bank, which will pay out £20 million in consulting fees for their work. KPMG, Deloitte and PwC will work to help the bank’s Future Fund, which is aimed at supporting businesses through the coronavirus crisis.

Even after years of solid growth in new areas, financial services and public sector projects continue to make up the lion’s share of the British consulting industry’s workload. Over the last few years, this line of work has ramped up as financial entities and wings of the state have tapped consulting firms to help plan for a post-EU future.

As the UK public sector seeks to paper over the cracks left by a decade of austerity, this has seen the Big Four of the professional services world pick up a growing amount of work. Deloitte earned £103 million from Central Government in 2018-19 – up from £59 million in 2017-18 – while rival PwC received £95 million, KPMG £90 million, and EY £81 million. The sudden impact of the Covid-19 pandemic looks to have seen the public sector double down on its outsourcing spending, as it looks to meet the urgent need of people and businesses for support amid the lock-down.British Business Bank hires Deloitte, KPMG and PwCIn the latest example of this, it has been revealed that the taxpayer-owned British Business Bank (BBB) has paid out £20 million in consulting fees, as it scrambles to speed up government-backed lending to struggling companies. Three of the Big Four – PwC, Deloitte and KPMG – have won contracts to support the BBB to this end. The trio will help with the operation of emergency lending programmes that have delivered £27 billion to 650,000 businesses so far.

The BBB is a state-owned economic development bank established by the UK Government. Its aim is to increase the supply of credit to small and medium enterprises (SMEs) as well as providing business advice services. It is structured as a public limited company and is owned by the Department for Business, Energy and Industrial Strategy.

As reported by the Daily Telegraph, the BBB has spent a total of £13 million on advisers for help with setting up and running its Future Fund, while consultants gained another £7 million for their work on the loan schemes. For example, PwC will receive £5.7 million for work on the Future Fund, a separate programme that will match up to £250 million of taxpayer money with private investment in start-ups. In just four weeks he firm developed an online transaction process for issuing convertible loan notes to companies that win funding.

Firms are also being paid for temporarily lending the BBB staff; a total of 16 consultants from Deloitte and three from KPMG so far. The contracts were awarded under an accelerated tender process, which the Government introduced in order to hand out ‘urgent work’ rapidly during the pandemic.

While the firms in question declined to comment to the Telegraph, a BBB spokesman said, “During this 10-week period, the bank has quadrupled the amount of finance it supports to smaller businesses across the UK, and increased the number of smaller businesses it is supporting by seven times. The estimated 2020-21 cost of just £20 million for external consultants to support the delivery of these multibillion-pound schemes represents good value for money to the taxpayer.”

Not everyone is convinced of this however. In May, Rachel Reeves, UK Shadow Cabinet Office Minister, criticised the Government for not disclosing details of contracts awarded to private entities – such as cost and how the Government would evaluate the quality of services provided. Reeves warned against relying “on opaque arrangements” with big professional services firms, which she claimed put “accountability for the expenditure of huge sums of taxpayers’ money” at risk.