Irish unhappy about massive spending on consultants

11 February 2014 2 min. read

Government officials and media in Ireland are becoming more and more critical towards massive cash flow from (semi)private institutions to management consultants. After multiple recent cases, again a disclosure caused public noise last month. This time the criticism is directed towards the national Irish water company: Irish Water. Last year, Ireland decided to nationalize their dike boards. Because of the strategic importance of water for the company and the magnitude that is needed to control the water efficiently, a while back, the government decided it would be wiser to unite all 34 local companies in one national provider. Irish Water was founded in the year 2013 being a (semi) public institution. In the upcoming five years it will gradually take over local entities’ responsibilities.

Ireland Water

Irish Water’s first task at hand was setting up the organization and its conduct of business. The management team decided that calling in external help was necessary to accomplish this. As a result, an army of management and IT consultants was hired. In sum, over €50 million was spent in less than a year. The most important players (Accenture, EY, IBM and Oracle) accounted for three-thirds of the total expenses.

Critics made harsh judgments about these enormous expenses. They also expressed great worry about the €50 million being only the beginning of a much bigger ‘spending party’. As a consequence of the phased integration of the local water companies, in the coming five years a lot of work aimed at consolidating and harmonizing the services is being expected.

Other cases

Irish Water is again a case in a string of other diverse quarrels that caused a lot of commotion. According to calculations made by the Irish newspaper the Irish Times, at least €50 million has to be spent by the transportation sector on consultants when it comes to implementing a new public transport ticketing-system.

Ireland Metro

The Railway Agency of Ireland’s capital Dublin spent more than €165 million on consultancy and technical advice to design and manage the progress of a new metro line*. To make the matter even worse for the latter case, the project has been put on hold by the cost-cutting government. The exact same happened to a ‘Dart Underground’, a project designed to integrate Dublin’s disparate suburban rail services. It cost almost €44 million – most of which went to consultants – and has also been postponed due to the recession.

The National Asset Management Agency (NAMA) is a company that controls ‘bad banks’ in the Irish banking business on behalf of the government. This is just another example that is heavily criticized because of its gigantically exceeding consultancy expenses. In the year 2012, has already mentioned this case (between 2010 and 2012 the NAMA spent more than €115 million on external advisors). An updated calculation made by the Iris Times shows that this amount has risen to €143 million meanwhile.

* The subway metro line connects St. Stephen’s Green and Dublin Airport.