Government departments not 'intelligent customers', says NAO

14 October 2010

14 October 2010 | Angeline Albert

The British government’s use of consultants has failed to bring value for money, according to public spending watchdog the National Audit Office (NAO).

It found that the government had failed to set clear and appropriate expectations of consultants or have systems in place to define and measure their value.

The NAO estimates that, in 2009-10, total spending on consultants across central government was £1.5 billion.

The report said: “We have found a number of areas where departments have not been acting as intelligent customers.”

It said government did not achieve value for money from consultants because it “frequently lacks the information, skills and strategies to manage them effectively and therefore cannot drive delivery”.

The report criticised departments’ failure to clearly define and assess the outcome required from suppliers to achieve the departments’ objectives. “There is limited information on supplier performance and benefit delivered.”

Suppliers are not held to account throughout contracts, it stated. There is very little evaluation of suppliers during projects, it said: “Procurement teams do not have the capacity and expertise to monitor individual contracts.”

The NAO said more involvement is required from staff outside of procurement teams to deliver value for money. “Procurement staff are working on improving the use of consultants and interims, but there has been less progress where input is required from other business areas.”

The report found “little depth” to data on consultants because few departments can provide accurate information on the length of contracts, classification of spending by type of consultancy service and value brought.

Alan Leaman, CEO of the Management Consultancies Association, which represents around 70 per cent of the industry, said: “The government has the opportunity to create a new and far better regime for the use of consultancy in the public sector, based on the value of the outcomes that are delivered. MCA member companies are ready to help.”

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