Lib Dems reveal £1.7bn government IT advice costs

The government has spent over £1.7 billion on consultants in the past six years, it has been revealed.

Some £180 million has been spent so far this year, mainly going to the twelve largest consultancy firms. The costs relate to advice on all operations, including technology and procurement.

The figures, compiled by the Liberal Democrats from parliamentary written answers, show that the government’s spending on consultants has multiplied by five times over the period, up to £388 million spent last year.

Accenture received the largest payments, it was reported, taking in £700 million since 2004. It told the Financial Times that many of the payments related to the design, building and running of large IT systems. Deloitte and PricewaterhouseCoopers collectively received a further £700 million.

The top spending offices were the Department for Work and Pensions and the Department of Health. The DWP booked over £500 million on reviews, and the DH spent £433 million on other consultancy.

The Liberal Democrats were unable to provide further details, but today branded the government as “consultaholics”. Lord Oakeshott, Liberal Democrat Treasury spokesperson, said Whitehall's plans to halve consultancy spending, as announced in the Budget, were a “triumph of hope over experience”.

He told the Sun newspaper: "Ministers come and go, consultants carry on charging fat fees and taxpayers pick up the pieces."

In last month’s Budget, the government said that by halving consultancy spending, and cutting out a quarter of marketing and communications expenditure, it would “save over £650 million by 2012-13”.

Planned steps included halving consultancy spending at the Foreign and Commonwealth Office and Department for International Development, to save £20 million. The departments had “built up their in-house skills, for example finance, IT and procurement”, the Budget document stated.

A further £40 million would come from “workforce improvements in the Home Office”, it said, “including through the introduction of new standard rates to reduce the use and cost of consultancy and contingent labour”. No further specific plans were announced.

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