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Labour's consultants add 1p to tax
by The Editor at 09:34 27/09/05 (Press)
Government spending on private consultants has risen to £2.5 billion, the equivalent of a penny in the pound on income tax, according to official statistics obtained by The Times.
Figures from the Office of Government Commerce show that spending on consultants rose by 42 per cent last year from £1.76 billion in 2003-04. The Times reports that that is as much as it would cost to build 150 new hospitals or employ more than 100,000 nurses or 75,000 policemen. A taxpayer earning £40,000 is now contributing around £87 a year to private sector companies.

While the numnber of private consultants rises, Whitehall is currently trying to shed some 84,000 Civil Service jobs. Unions have complained that departments are paying more to have their work done privately — often by former civil servants. The disclosure, on the opening day of the Labour Party conference, also coincides with the revelation that Gordon Brown intends to reinstate civil servants to their pre-eminent position should he succeed Tony Blair at 10 Downing Street, reversing the Prime Minister’s reliance on political advisers.

Some private consultancies are now focusing entirely on public sector contracts, which can attract fees of up to £2,000 per day. Firms are being hired to advise on outsourcing, to “manage change”, to set up IT systems, to advise on advertising and communications and to conduct polls and surveys.

Mark Serwotka, general secretary of the Public and Commercial Services Union, said the Government planned to save £3 billion a year by slashing civil servants but was now spending almost as much on management consultants. He told the Times: “It is sheer lunacy and represents little value to the taxpayer, especially when you have consultants sitting opposite civil servants doing the same work but being paid up to ten times more.”

But the FDA, which represents senior civil servants, said it had repeatedly raised concerns about the use of management consultants who were often former civil servants being paid more to do the same work. A spokesman said: “There is no accountability for the money spent. Nobody knows how much money is spent, it often doesn’t appear in department running costs, and it is just spiralling out of control.”

Full article: Labour's army of consultants adds 1p to income tax - Times.

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