The Treasury was “concerned about the significant legal fees” it was incurring during the process of selling the government’s 40 per cent stake in Eurostar earlier this year, according to a National Audit Office (NAO) report.
Law firm Freshfields was appointed as legal adviser to the Treasury to oversee the sale of the stake to an Anglo-Canadian consortium for £757.1 million in March.
Freshfields’ fees, which totalled £2.8 million, were paid on a billed time basis, rather than a fixed fee basis. The Department for Transport, which procured the legal advisers following a competitive tendering process, “considered that a fixed fee arrangement was not appropriate given that it was not possible to know at the outset the exact scope of all the work required”, according to the NAO’s report, The Sale of Eurostar.
It revealed that the Treasury considered re-procuring the legal adviser or altering the contract to a fixed fee basis, but decided that a change of legal team midway through the process would have been “inefficient and problematic due to the time-critical nature of the work”.
Ultimately however, the report concluded that the government prepared well for the sale and the sale process was run effectively.
“I regard the sale as value for money,” said Amyas Morse, head of the NAO. “This case illustrates some general lessons for government as it embarks on an unprecedented asset sales programme forecast to exceed £62 billion over this Parliament. These lessons include getting good value from advisers.”