Margaret Hodge elected chairman of Commons spending watchdog

Now the truth is coming out when a FormerLabour MP Margaret Hodge says ” Why should the Department for Transport, for instance, be so dependent on consultants”?”

Central government departments spent more than £1bn on consultants and temporary staff in 2009-10, a report by the Commons spending watchdog says.

It said departments should negotiate more fixed price contracts and develop “core” skills among their own staff.

And it warned “uninformed” cuts to spending and training could end up costing more in the long term.

The Cabinet Office says spending on consultants dropped 46% in the months after the election.

And in his evidence to the committee, Cabinet Secretary Sir Gus O’Donnell said that spending on consultants, as a share of spending on goods and services, was about 4% – while in the private sector it was about 15%.

The report by the public accounts committee says that, in 2009-10, departments spent £789m on consultants and an estimated £215m on interim managers. In 2006-7 £904m was spent on consultants – that dropped by £126m in 2007-8.

The report said new measures brought in by the coalition to control the use of consultants seemed to be having some effect but some departments’ spending was “unacceptable”.

It flagged up the Department for Transport, which spends £70 on consultants for every £100 it spends on its own staff while HM Revenue and Customs spent only £2 per £100.

‘Stop-go approach’

A further £700m a year was estimated to be spent on consultants by arms-length bodies, which should be required to report their spending, the report said.

It said departments did not control what they spent on consultant, with 70% of contracts based on the amount of time spent on a project, while only 29% were based on a fixed price and only 1% were based on achieving specific goals.

It also warned against a “stop-go” approach. It pointed out that the Department of Health appeared to be reducing consultancy spending by 95% in 2010-11 but that Cabinet Secretary Sir Gus O’Donnell was anticipating a resurgence in consultancy spending “as new policies are developed and implemented”.

Cabinet Office figures suggest overall spending on consultants dropped 46% in the six months between April and September 2010, compared with the previous year.

Ian Watmore, who heads up the Cabinet Office’s Efficiency and Reform group, told the committee that the drop was largely due to the number of projects and programmes cancelled by the coalition. But he also thought spending would rise again within the five-year parliament, when new programmes were implemented.

The committee said reducing what was spent on consultants “in an uninformed way to make short term gains” could cost more in the long run, adding that HM Revenue and Customs had stopped hiring consultants for six months, which had put an end to revenue-raising tax collection campaigns.

And it warned the pressure to save money could mean cuts to training, which would undermine commitments to develop staff skills to reduce reliance on consultants.

More work was needed on improving civil servants’ skills – particularly in project management and IT, the committee said.

Cabinet Secretary Sir Gus said more graduates were being recruited into those specialist areas but the government was at a disadvantage in recruiting senior people because they “can often earn significantly more in the private sector”. He said it was also difficult to persuade staff to stay in project management roles “due to a preference for policy related work”.

Committee chairman Margaret Hodget said Whitehall was “largely in the dark” about whether consultants were good value for money.

“There are of course legitimate reasons for a department to buy in specialist skills where they are in short supply internally. But departments have become too reliant on buying in core skills rather than developing them in their own staff.

“Some departments depend far more on consultants than others. In itself, that is not surprising. What is unacceptable is the poor understanding of whether the extent of a department’s use of consultants is justified by the nature of its business. Why should the Department for Transport, for instance, be so dependent on consultants?”

A spokesman for the Department for Transport said it had brought in “new, more rigorous controls which require close examination and approval of any requests to appoint consultants”.

It said the department had spent £12.5m less in the 6 months to September 2010, compared with the same period in 2009 but added sometimes the use of consultants was “the best value for money option”.

Leading Senior Tories Cant Be Trusted Then Who Can You Trust

How long with the Coalition will last do I hear people are saying the anwer to that is that they will last for the full five years. Labour is in the perfect position to drive home the message of the fault of the coaltion by driving a wedge between the Tory Right and the Cameronians. the other fault lines between the Libdem Leadership and membership has been driven wide open.


Well. well, who would have throught that David Heath, the deputy Leader of the House, said the Chancellor had the “capacity to get up one’s nose” and did not appreciate what it was like to lose £1,000 a year – the value of the cut in child benefit for higher earners.

It is further alleged by Paul Burstow, the care minister, told reporters from The Daily Telegraph: “I don’t want you to trust David Cameron.” And Andrew Stunell, the local government minister, said he did not know where the Prime Minister stood on the “sincerity monitor”.

Norman Baker, the transport minister, even privately compared the Conservatives within government to the South African apartheid regime, claiming that it was his job to campaign from the “inside”.

The disclosures come on the third day of this newspaper’s investigation into the true feelings of senior Liberal Democrats towards the Coalition.

The deep personal animosity and distrust at the highest level of government between ministerial colleagues can be disclosed today. Their remarks were made during covertly recorded conversations with two undercover reporters posing as concerned Liberal Democrat voters.

In his comments, Mr Heath suggested that the Chancellor, a multi-millionaire, was out of touch with the common voter. “George Osborne has a capacity to get up one’s nose, doesn’t he?” he said.

“I mean, what I think is, some of them just have no experience of how ordinary people live, and that’s what worries me. But maybe again, you know, that’s part of our job, to remind them.”

Mr Baker said some of his Conservative colleagues were “beyond the pale” and also says he does not like the Chancellor.

“I mean, there are Tories who are quite good and there are Tories who are, you know, beyond the pale, and, you know, you have to just deal with the cards you’ve got,” he said.

“I don’t like George Osborne very much … I mean, there are Tories who are all right — Ken Clarke’s all right — there are the ones you can do business with. But what you end up doing in the Coalition … is we play them off against each other.”

Mr Baker also made the bizarre claim that the position of Liberal Democrat ministers was akin to that of Helen Suzman, a South African MP who almost single-handedly sought to change government policy from within the regime in the 1970s and 1980s. Mrs Suzman, who died in 2009, was nominated for the Nobel Peace Prize and received numerous death threats.

He said: “I always think in South African terms, should you be Nelson Mandela, outside the system, campaigning for it to be changed, or should you be Helen Suzman, who’s my … one of my political heroes actually.”

“Helen Suzman was in the apartheid regime when everybody was male and white and horrible actually … she got stuck in there in the South African parliament in the apartheid days as the only person there to oppose it … she stood up and championed that from inside.”

He added: “You do get your hands dirty by dealing with things you don’t want to do, and sometimes you get results which aren’t quite what you want. But the issue we have to make, the calculation in coalition, is we have to make as a coalition is do we get stuff that we do want which outweighs some of the stuff we don’t want, and that’s the reality of it.”

The comments are likely to infuriate Mr Cameron and Mr Osborne, who are sensitive over claims about their privileged background, which Labour has also tried to exploit.

They were echoed during a separate meeting with Mr Stunell, a junior local government minister, who was one of the key Liberal Democrat figures in the Coalition Agreement talks.

Mr Stunell told the undercover reporters: “I don’t know where I put him [the Prime Minister] on the sincerity monitor. He’s, umm, he’s certainly a very skilled operator. He’s worked his way through the Tory system and he’s, is he sincere? I do not know how to answer that question.”

Mr Burstow added: “I don’t want you to trust David Cameron … in the sense that you believe he’s suddenly become a cuddly Liberal. Well, he hasn’t. He’s still a Conservative and he has values that I don’t share.”

When asked whether Mr Osborne was out of touch, he replied: “Yes, I know, I know, I know. There are going to be some Conservative politicians in particular who are detached from reality. I mean, Lord Young’s comments, a lot of people are unhappy with …”. This was a reference to his comments last month that Britons had “never had it so good” during the recession, which led to his resignation as Mr Cameron’s enterprise adviser.

Mr Heath and Mr Baker also publicly admit that they oppose the rise in tuition fees, despite voting in favour of the policy in the recent crucial Commons vote. “I’m still wholly against,” Mr Heath said. “I’ll say it perfectly openly, I’m wholly against tuition fees.”

Mr Baker added: “Well, it is a big shock and it’s a big shock to me and I almost resigned over the matter, on that particular one because it was just pretty horrific.”

In today’s recordings, Mr Stunell expresses his hopes that the situation will improve before the next election.

“We knew from the very start of what we were doing that this financial stuff was going to be really tricky. Difficult. I mean, horrendous … and that clearly the first two or three years were going to be absolutely dire … so it’s not all about cutting, there is going to be some good stuff.”