Government mulls in-house ‘Crown Consultancy’ to cut use of private firms

Report reveals plans after Lord Agnew says overuse of consultants "infantilises" officials
Lord Agnew. Photo: Crown Copyright/Open Government Licence v3.0

By Richard Johnstone

09 Nov 2020

The government is considering creating an in-house consultancy arm in a bid to stem the use of consultants that one minister has said is infantilising civil servants.

The Financial Times reported on Friday that the government was planning to create the so-called Crown Consultancy to cut the use of external consultants, which has risen in recent years to provide extra capacity and skills to aid with Brexit planning and the response to coronavirus.

The project is being led by Cabinet Office minister Lord Agnew, who warned earlier this month that the use of such external suppliers was “providing poor value for money” and “infantilises the civil service by depriving our brightest people of opportunities to work on some of the most challenging, fulfilling and crunchy issues”.

In his letter in September, Agnew said the government seemed to be ineffectual at using graduate Fast Stream civil servants to carry out work that is outsourced to consultants, “using similar people at a vastly inflated cost”.

“This is unacceptable,” his letter said. It was not initially clear how the Fast Stream, which recruited across 14 streams this year, would link to the Crown Consultancy project.

The development comes after months of headlines about departments’ use of external companies to provide capacity and skills in areas including the NHS test and trace programme, the Joint Biosecurity Centre and other areas of the coronavirus response – after bringing in large numbers of consultants to support Brexit preparations.

“There’s a lot of reliance on consultancies,” one official close to the project told the FT. “It would be sensible to look at what we can do internally, rather than externally.”

Cabinet Office permanent secretary and civil service chief operating officer Alex Chisholm told MPs last week that Agnew "makes a really good point" about the need to increase specialist skills in the civil service and rely less on consultants.

Chisholm acknowledged to the Public Accounts Committee last week that the use of consultants was currently at “peak use”. He said last year’s total spending on management consultants was likely to be notably higher than the previous year’s total of around £980m.

Asked in the session by Sir Bernard Jenkin – the former chair of the Public Administration and Constitutional Affairs Committee – if he felt that using “armies of consultants” advertised a lack of skills in the civil service, Chisholm said he agreed “with the sentiment of the comment”.

He said the civil service should make “sparing” use of consultants where it is justified to provide skills that are not available in house or where extra short-term capacity is needed.

He said a drive in the last few years to introduce more specialist skills – and thus reduce the government’s reliance on consultants – has been successful, but that further progress was needed.

Ask to comment on the report of the Crown Consultancy, the Cabinet Office said Lord Francis Maude, who led a civil service reform plan under the coaltion government,  was conducting a short review on how to increase the efficiency and effectiveness of government functions and controls.

This review will look at the government functions, such as our commercial functions, HR, project delivery and property management, the statement said, as well as Cabinet Office spend controls, which set rules around consultancy spending.

Responding to the report, Prospect deputy general secretary Garry Graham said:“It has been a longstanding frustration of civil servants that historically some ministers have been addicted to the use of private sector management consultants when work could be done in house at a fraction of the cost.

“Investing in skills and ensuring the civil service has the capacity needed is the best way to ensure value for money and effective service delivery.”

 

Tamzen Isacsson, the chief executive of the Management Consultancies Association said n response to the report: “Since the outbreak of Covid-19, government departments have faced an unprecedented volume of workload and using external resources has enabled the government to work quickly and with intensity on major initiatives across the UK. At short notice we’ve been able to bring world class technical expertise and multi-disciplinary capabilities and it has been our priority to strengthen the UK governments response, processes, and provide value for money to government departments.

"Consultants are supporting clients both in the private and public sector during these challenging times assisting with crisis planning, supplier risk management, digital business delivery models and scenario planning." 

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