Scottish Government spending on external consultants soars

06 December 2021 Consultancy.uk 4 min. read
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As is the case with many governments around the world, when it is short-staffed or in need of specialist expertise, the Scottish executive uses consultancy firms to fill the gaps. However, spiralling spending on private advisors has left the Scottish National Party facing “serious questions” from its opposition.

Following a Freedom of Information request, figures have been published laying out how much public money has been spent by the Scottish Government in the last five years. The data, which has since circulated through the Scottish press, confirms that consulting fees paid from the public purse have increased each year at Holyrood, and that the 2020/21 bill was subsequently ten times the size of compiled consultancy costs in 2016/17.

The Scottish Government has since moved to justify the year-on-year increases by arguing it was “driven by additional investment in key strategic priorities.” Like the Westminster Government, Scotland’s executive has needed support with moving numerous services online during the pandemic – but it also has a multitude of other transformational projects that it sought help for. These included programmes to “support innovation and industries, tackle fuel poverty and improve energy efficiency, establish the Scottish National Investment Bank and Social Security Scotland.”

Scottish Government spending on external consultants soars

A Scottish Government spokesperson added, "The Scottish Government uses consultancy firms where necessary to undertake work that requires specialist expertise. Consultancy spend is rigorously monitored and audited.”

However, opposition figures remain unmoved by the governing Scottish National Party’s claims. Scottish Labour in particular stated “serious questions” needed to be answered over whether the more-than £25 million spent on consultants was an appropriate use of funding.

Scottish Labour’s Finance Spokesperson, Daniel Johnson, added, "This is an eye-watering amount of money being paid to consultancy firms… We need to make sure that public money is being spent in the most prudent and efficient way possible, with only those with clear expertise engaged."

Biggest pay-outs

As reported by Scottish paper The Herald, 2016/17 saw the SNP administration spend £1.3 million on some of the world’s biggest consulting brands, followed by a £2 million pay-out in 2017/18, and £3.2 million in 2018/19. The shift picked up pace in the next two years, meanwhile, as fees for the big consultancy firms leapt to £7.5 million in 2019/20, and increased again to £10.7 million last year.

Analysis of the information released reveals that Deloitte received a total of £15.7 million in the space of the last five years – including £5.4 million over 2020/21 when it helped develop systems for Social Security Scotland; a project it banked £1.3 million from the year before.

Big Four rival EY was the next biggest winner from the contracts, having brought in bills of £5.4 million since 2016/17. This featured more than £1.5 million for internal audit services, and almost £2.5 million for projects in the energy sector – while it has also been handed over £168,000 in public money for “fuel poverty and energy efficiency” costs. Meanwhile, PwC also received £1.8 million of public funding for consultancy costs over the same period.

It should be noted that the figures only pertain to central government spending – and as such, firms like the mentioned members of the Big Four likely pick up more public money at the council and municipal level. At the same time, the UK Government’s consulting spending on the Big Four professional services firms was recently estimated as being £1.2 billion in the year to March 2021, according to analysis by data provider Tussell, reported on by the Financial Times.

However, while it pales in comparison to such a hefty price-tag, the Scottish Government’s consulting bill has some critics worried that the administration is heading in a similar direction. In particular, relating to value for money with regards to public services delivered by private contractors, union leaders – who previously warned about PwC's National Care Service contract – have again flagged up worries over a continuing trend of outsourcing projects away from civil servants.

Scottish TUC General Secretary Roz Foyer argued, “We have previously raised concerns at the use of such consultancy companies rather than the expertise of Scotland’s civil service. Many of the companies listed have a direct interest in the private provision of public services and are hardly banner carriers for the kind of policies we need to rebalance power and wealth in favour of working people and the communities they live in.”