Government spending on Covid consultancy contracts rises to £175m

Chair of parliamentary committee expresses ‘shock’ and announces investigation

The bill for private consultants hired by the government to help combat the coronavirus pandemic has climbed to £175m, as the chair of an influential parliamentary committee revealed that MPs would investigate the multimillion pound use of management consultancies.

The government has bought consulting services from almost 90 different companies as it scrambled to fill gaps in the civil service’s pandemic response.

Disclosed spending on consultants has risen by £65m since the end of August, a 35% increase, according to contracts collated by the data company Tussell.

The newly disclosed spending included work on setting up and running the malfunctioning test-and-trace system, procuring medicines, buying personal protective equipment and supporting the government’s contact-tracing app.


The rapid increase in the consultancy bill in recent weeks to a new total of £175m was partly driven by belated publication of contracts. Tussell’s analysis showed that government bodies took 80 days on average to publish the contracts. The statutory maximum is 30 days.

The latest figures emerged in the same week it was revealed that executives at Boston Consulting Group, the fourth biggest recipient of coronavirus consulting contracts, were being paid as much as £6,250 a day to work on the struggling NHS test-and-trace system.

The government’s reliance on expensive management consultants has come under scrutiny during the pandemic. Lord Agnew, the Cabinet Office and Treasury minister, last month said the civil service had been infantilised by an unacceptable reliance on consultants.

Meg Hillier, the chair of the public accounts committee, said on Thursday she was shocked by the increase in consultancy costs, adding that her committee had launched an inquiry into the government’s use of consultants.

“What on earth are they doing? It is a very steep increase in a very short space of time. You cannot just tear up the rules and dish out taxpayers’ money in this way,” Hillier said.

Referring to the delay in publishing contracts, she said: “Not publishing them on time is not acceptable and there is no excuse. At a time when we have given the government huge powers to bypass the usual tendering process the government should be more transparent not less.

“It appears as if there is a general disdain for parliament and the public. The public are not fools.”

Many of the largest contracts – including those published in the last 45 days – date from March or April, when the government brought in the emergency procurement rules.

The largest consulting firms have been among the biggest beneficiaries. The value of contracts awarded to Deloitte has risen to £22.7m while its rival PricewaterhouseCoopers’s has increased to £24.4m, according the latest data. Senior partners in consulting firms often charge thousands of pounds for a day’s work.

The Cabinet Office, which has coordinated much of the government’s pandemic response, was the biggest single buyer of consulting services, with £53.8m of contracts awarded. The Department of Health and Social Care has spent £44.2m on consultants.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

Tamzen Isacsson, the chief executive of the Management Consultancies Association, a lobby group, said consultants can provide the government with skills and value for money.

“Government departments have faced an unprecedented volume of workload with Brexit planning and Covid-19 and using external resources has enabled the government to work quickly and with intensity on major initiatives,” she said.

A government spokesman said: “We are building a huge diagnostic network and to achieve this we need to work with both public- and private-sector partners who have the specialist skills and experience we need, to work at pace.

“Every pound spent is contributing towards our efforts to keep people safe as we ramp up testing capacity to 500,000 tests a day by the end of October.”


Jasper Jolly and Rajeev Syal

The GuardianTramp

Related Content

Article image
A £56m bill and rising: the cost of Covid consultancy contracts
Some of the most lucrative contracts received by firms such as PwC and Deloitte since the pandemic began

Rob Davies

29, Sep, 2020 @5:01 PM

Article image
Consultants' fees 'up to £6,250 a day' for work on Covid test system
Global firm BCG charged £10m over four months to deal with UK test and trace network, source says, as Tory reliance on private sector seen to grow

Jasper Jolly and Rajeev Syal

14, Oct, 2020 @8:25 PM

Article image
Brexit drives government consultancy fees to £450m in three years
Exclusive: Home Office biggest spender as department deals with preparations to leave EU

Rajeev Syal

06, Oct, 2020 @6:24 PM

Article image
Covid era graduates struggle with communication, say Deloitte and PwC
Accounting firms offer extra training on face-to-face presentations and in-person meetings

Jasper Jolly

02, May, 2023 @11:45 AM

Article image
Carillion: 11,800 wait to learn their fate as 4,400 more jobs are saved
Employees transferred in prison and defence contracts – but more than 1,000 ex-staff have lost jobs

Rob Davies

12, Feb, 2018 @6:32 PM

Article image
Carillion: accountants accused of 'feasting' on company
Details of £72m in fees in 10 years emerge as 11,800 workers await fate after firm’s collapse

Rob Davies

13, Feb, 2018 @12:01 AM

Article image
Big four accountancy firms should break up, say MPs
KPMG, Deloitte, PwC and EY ‘stranglehold’ contributing to corporate failures, report says

Rupert Neate

01, Apr, 2019 @11:01 PM

Article image
Firms giving advice on aggressive tax avoidance could face large fines
Government plans in consultation document suggest that tax advisers whose schemes are defeated in courts could have to repay lost money to taxpayer

Rajeev Syal and Juliette Garside

16, Aug, 2016 @11:01 PM

Article image
Letters: The 'big four', transparency and tax reform
Letters: The public accounts committee's report highlighting the 'big four' accountancy firms' conflict of interest in advising the government on tax reform while advising clients on tax avoidance is welcome but only scratches the surface of a much bigger problem

28, Apr, 2013 @8:00 PM

Article image
Big four accountancy firms cut off businesses in Russia and Belarus
EY and Deloitte join KPMG and PwC in separating Russia operations in response to Ukraine invasion

Jasper Jolly

07, Mar, 2022 @4:26 PM