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Exclusive: Consultancies win £700m in UK government’s COVID spending spree

Boris Johnson’s government condemned over ‘jaw-dropping’ cost of consultants, as new COVID contracts are made public

Martin Williams
15 February 2022, 12.01am
Boris Johnson’s government has been accused of wasting taxpayer money on expensive private consultants
Composite by openDemocracy via PA Images / Alamy Stock Photo

Consultants have raked in almost £700m from UK government COVID contracts since the start of the pandemic in 2020, openDemocracy can reveal.

Many of the contracts were awarded without competitive tender, meaning that other companies couldn’t bid for the work.

Whitehall departments have faced criticism for a “worrying lack of transparency” over many of the deals, which include supporting the Test and Trace scheme and the vaccine rollout.

Research carried out last year found that some £600m had been awarded to dozens of consultancy firms in response to the pandemic.

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But fresh analysis by openDemocracy shows that the spending splurge has continued – with another £100m of consultancy deals announced in the past ten months.

The true value spent by the government on consultants is likely to be even higher, because not all contracts have yet been published. In fact, some of the deals awarded in 2020 were made public only in recent months.

“Any government worth its salt should be a true guardian of the public coffers that spends carefully and delivers effectively,” said Labour’s Margaret Hodge, the former chair of the public accounts committee.

“This important investigation by openDemocracy demonstrates once again that this Tory government is not up to the task.

“They have splashed our cash on a roll call of expensive consultants without a care for how taxpayer’s money is spent or a consideration for transparency. If you look up profligacy in the dictionary, you might just see a picture of Boris Johnson.”

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openDemocracy’s analysis looked at consultancy work awarded to 14 of the sector’s biggest companies – including Deloitte, KPMG, EY and PricewaterhouseCoopers – and made public in the past ten months.

It reveals how consultants have continued to win eye-watering sums from Boris Johnson’s government.

Last year, analysis found that Deloitte alone had been handed 26 contracts worth up to £278.7m. But details of several more contracts with the firm have now been published, totalling more than £10m, including work on the government’s COVID pass programme.

KPMG was awarded a £4m contract by the Department for Transport to research the pandemic’s impact on Transport for London.

Another firm, PA Consulting, has been awarded a string of COVID-related contracts by Whitehall, including work on ventilators and testing.

The government also paid consultancy firm McKinsey the equivalent of £14,000 a day to create a replacement for Public Health England, in May 2020.

Many consulting companies have enjoyed healthy profits through the pandemic, with top bosses receiving huge payouts.

Partners at Deloitte were set to take home a £1m payout last year according to reports, while partners at the American firm Boston Consultancy also received £943,687 each – after it won a string of UK government contracts.

And PWC’s chair Kevin Ellis saw his profit share rise to £4.4m in 2021 after it won millions of pounds worth of deals from Whitehall. In its annual report last year, PWC said it had helped the UK government “to enable economic repair”.

“Work that could and should have been done within government has instead been done at jaw-dropping day rates by private consultants,” said Jolyon Maugham, the director of the Good Law Project, which has taken the government to court over different COVID contracts.

He added: “This – the inevitable consequence of years of austerity – is expensive for taxpayers and suboptimal for outcomes. We need to stop sacrificing efficiency at the altar of small-state ideology.”

Work that should have been done within government has been done at jaw-dropping day rates by private consultants

Some consultancy deals have also been criticised because the government suspended its normal procurement procedures at the start of the pandemic. Rules were lifted in March 2020 to allow officials to skip the often lengthy competitive tendering process – and instead hand contracts directly to their chosen companies.

However, months later, openDemocracy revealed that departments were still giving contracts to consultancy firms without competition – leading to accusations of sloppiness by the government.

Many consultancy contracts have also been kept secret for months after being signed, before eventually being published online.

The Labour Party has previously urged the government not to rely so heavily on a small handful of multinational consultancy firms, saying there is a “worrying lack of transparency” around COVID contracts.

Rhys Clyne, a senior researcher at the Institute of Government, told openDemocracy: “There will always be a need to bring outside expertise and resource into government, but the government’s extensive use of, and spending on, consultants demonstrates the problem of allowing a reliance on contractors rather than maintaining and improving the capabilities of the civil service.”

Responding to openDemocracy's investigation, a government spokesperson said: "The figures referenced are the expected value of the contracts, not the actual spend which is often much lower. Many of these contracts are for broader professional services, not only for advisory consulting services.

"The Government Consulting Hub has been set up to advise on external expenditure, conduct consultancy work, and reduce the reliance on external contractors.”

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