Ministers spend £600m on big four accountancy firms

Figures I’ve uncovered show that Britain’s big four accountancy firms have been paid more than half a billion pounds in fees by government departments over the past three years, including £220 million from the aid budget.

It is scandalous that rather than channelling aid money through charities and organisations that actually understand the countries they are working in, ministers are handing out millions to multinational accountancy firms.

“In the past year PwC, KMPG, Deloitte and Ernst and Young were paid £95 million by the Department for International Development (Dfid), an increase of 60 per cent on 2013. The big four’s pay cheque accounts for 1 per cent of Dfid’s aid budget.

The figures were uncovered by the former chairwoman of the public accounts committee, Dame Margaret Hodge, through parliamentary questions to government departments which revealed the following about spending over the past three years.

● PwC has been paid £242 million, KMPG £165 million, Deloitte £119 million and Ernst and Young £73 million.
● Spending on consultants by government departments has increased by 17 per cent at the same time as civil service staffing has decreased.
● There have been at least 51 secondments from consultancy firms with 20 of these coming from the big four.

The figures suggest the Conservatives’ drive to reduce the reliance of government on outside firms to do public sector work has gone into reverse.

Last year £223 million was paid out for external work and contract management, up from £186 million in 2013.

Dame Margaret said she was concerned at the levels of spending by Dfid on firms which, she said, have no track record in development. “It is scandalous that rather than channelling aid money through charities and organisations that actually understand the countries they are working in, ministers are handing out millions to multinational accountancy firms,” she said.

She added that the levels of spending were also cause for concern. “Departments are bankrolling the big four consultancy firms to the tune of £600 million. This does not represent value for money for the taxpayer.”


Full story in The Times here