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Consultants ‘a vital cog in the Whitehall machine’
by Susie Hughes at 13:25 08/08/14 (News on Business)
Consultants make a key contribution to Government departments and offer taxpayers value for money, the head of a contractor and freelancer services group has claimed.
Derek Kelly, managing director at Optionis, was responding to a BBC Newsnight investigation into Whitehall spending on external consultants.

Figures obtained by the programme show that at least 30 consultants worked in Government departments last year on day rates of £1,000-£2,000.

The Department for Transport took on 10 consultants, while the Ministry of Defence said it had recently hired someone earning up to £3,000 a day. Separate figures show the MoD spent £137m on 'technical consultants' last year.

Unions and lobby groups such as the Taxpayers’ Alliance reacted angrily to the findings, but Mr Kelly leapt to the defence of consultants.

He said: “Consultants play an important role in ensuring complex and important projects are delivered on time, and are a vital cog in the Whitehall machine.

“Their contribution should be recognised and valued. In time of austerity they actually deliver value for money, despite the eye-catching headlines.

“The day rates being paid to consultants represent the total cost to the public purse. There are no employer National Insurance (NI) contributions, no holiday pay and – most importantly – no pension costs to add on.

“Conversely, a permanent employee earning £500 a day could actually be costing the government – and therefore taxpayers – an additional 35 per cent or 40 per cent on top of this.

“Sadly, such nuances are rarely reflected in mainstream media coverage and the wider public debate.”

High profile
The programme comes after a furore a few years ago when the media exposed examples of senior public sector workers, like head of Students Loans Company, Ed Lester, operating through their own limited companies to mitigate their tax and NI liabilities. Since then, the Government has introduced a crack down with much tighter checking mechanisms forced on Government departments who recruit consultants.

Mr Kelly said: “After the recent controversy over high-profile civil servants operating through personal service companies (PSCs), the last thing public-sector contractors need is another witch hunt.

“The Government, quite rightly, often wants the best talent to work on a specific project for a short period of time. In these circumstances, bringing in consultants – even on high day rates – is more cost-effective and sensible than hiring permanent employees.”

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Susie Hughes © Shout99 2014

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