Spotlight on government consultants

In a report, the Commons Public Accounts Committee (PAC) said a better grip on the use of consultants would lead to efficiency gains of more than £500 million a year.

But the use of consultants was defended by the Office of Government Commerce, which said external expertise had helped achieve public sector efficiency savings of more than £15 billion this year.

The PAC investigation found that public sector spending on consultants in England has risen by a third in three years, from £2.1 billion in 2003-04 to £2.8 billion in 2005-06, largely due to increases in spending by the NHS. Of this, central government accounts for £1.8 billion.

But the report said that Whitehall departments often hire consultants before establishing whether in-house staff have the skills for the job.

They do not know how much is being spent on consultancy and have no idea whether the benefits are justified by the cost. And departments "routinely" do not agree with consultants any measurable benefits to be expected from contracts and they are often paid for time worked and not results.

There was anger among unions and NHS health workers at the scale of spending uncovered in the report.

Dr Jonathan Fielden, chairman of the British Medical Association's consultants committee, described it as "a disgraceful waste of taxpayers' money".

And Mark Serwotka, general secretary of the Public and Commercial Services Union said: "These are obscene sums of money being given to management consultants with little thought of value for money."

The Office of Government Commerce - a branch of the Treasury responsible for improving value for money - defended the Government's record. It said: "It is misleading to suggest that the Government is not achieving good value for money in its use of external consultants. The fact is that there a great many examples where consultancies have helped Government deliver projects very successfully."