A National Audit Office report, released today, says the government’s reduction in spend on consultants and temporary workers was a short-term fix and, as spend increases again, underlying staffing issues have clearly not been fixed.
The report says since strict spending controls were introduced in 2010, annual spending on consultants and temporary workers reduced by £1.5bn. However, since 2011-12, annual spending on this workforce has increased by between £400m and £600m as departments reduced permanent workforces.
No benchmark figures were given, as overall spend is uncertain, but the audit office’s research suggests the main 17 departments spent between £1bn and £1.3bn on these workers in 2014-15, compared with around £2.7bn in 2009-10.
The report says strategic workforce planning is “under-developed” within departments, leading to increased hiring of consultants and temporary workers.
In 2014-15, departments spent an average of 6-8% of the cost of their civil servants on these workers, with individual departments ranging from 1% (HM Revenue & Customs) to 35% (Cabinet Office).
The audit office found the internal request approval process was weak in some departments and even the Cabinet Office, despite recommending the process, did not always follow it.
It also found government departments were generating limited competition for both consultancy and temporary staff assignments. Departments chose to use single-tender action, or extend existing contracts for 43% of consultancy work in 2014-15.
The largest six consultancy firms won three-quarters of the work let through the Crown Commercial Service (CCS) cross-government consultancy agreement, while small and medium-sized enterprises won only 9% of this work (and 5% of all government consultancy work). For temporary staff appointed through CCS’s temporary staff agreement, around half were appointed without competition.
This led the Recruitment & Employment Confederation (REC)’s head of policy Kate Shoesmith to say: “Given that the current government has stressed the importance of small businesses to UK economic growth, we would expect this government to act as more of a champion for SMEs, including through its own procurement strategies.”
The audit office’s report says government departments appoint only about half of their consultancy and temporary staff through the CCS agreements.
Audit office analysis suggests specialist staff are generally paid twice as much as comparable in-house staff.
As at 1 May 2015, 47 temporary staff were engaged on a daily rate of over £1k, compared with 30 senior civil servants with comparable pay.
The largest six consultancy firms are PwC, Deloitte, KPMG, EY, PA Consulting Services and McKinsey & Company.
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