An FOI request from former Public Accounts Committee chair Margaret Hodge revealed the amount of public money spent on consulting firms by government departments.
Hodge told the Times that the overall levels of spending are a cause for concern. “Departments are bankrolling the Big Four consultancy firms to the tune of £600m. This does not represent value for money for the taxpayer,” she said.
Break down of departmental spending
The biggest spenders were the Department for International Development (DFID) and the Ministry of Defence (MoD).
The DFID spend on Big Four services has increased every year and has even dipped into the department’s aid budget.
This does not represent value for money for the taxpayer
The accounts show that PwC, KPMG, Deloitte and EY were paid £98.5m by the department in the 2015/16 financial year. It spent £4.1m on Deloitte, £37.9m on KPMG, £302,743 on EY and £56.1m on PwC.
In 2014/15, it spent £65.9m on Big Four services; £5.6m on Deloitte, £11.5m on KPMG, £2m on EY and £46.7m on PwC. While in 2013/14, it spent £58.6m in total; £5.2m on Deloitte, £7.9m on KPMG, EY £2.9m on and £42.5m on PwC.
“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,” said Hodge.
A spokesperson for PwC said, "Much of our work for DFID involves organising the commissioning of third parties to provide services. We administer the disbursement of large pools of funding for technical assistance work, or grants to NGOs, research institutions and specialist firms with deep local expertise."
The spokesperson added that the £56.1m spent on PwC in 2015/16 and the £46.7m spent on the firm in 2014/15 and £42.5 in 2013/14 includes the funds disbursed by PwC on behalf of DFID as well as the fees paid to PwC.
The Ministry of Defence (MoD) was the biggest spender; it paid £252.6m in Big Four fees over the past three financial years.
The MoD used PwC’s services 20 times over the last three years with fees totalling over £40m. It used Deloitte’s services 56 times with fees totalling more than £63m. EY’s services were used 10 times, with fees coming to over £53m and KPMG’s services were used 24 times with fees totalling almost £97m.
The Treasury spent a total of £441,715 on EY services, £586,530 and £778,665 on Deloitte, £237,173 on PwC, and £620,029 on KPMG's services over the last three years. This brings the total Big Four spend to almost £2.7m.
HMRC spent £3.7m on Deloitte's services, £1.2m on PwC's services, just under £700,000 on EY (including an £18 payment in 2013/14) and £311,656 on KPMG.
The Home Office confirmed it used Deloitte’s services four times over the last three years, EY’s five times and KPMG’s twice. It used the services of other consulting firms 26 times over the last three years.
The Home Office spent £120,000 on KPMG's services in 2013/14 and £13,397 in 2014/15. It spent £131,750 on EY’s services in 2014/15 and £290,000 on Deloitte’s services. Overall, it spent £555,147 on Big Four fees.
The Home Office spent over £1m on the services of other consulting firms in 2013/14 and over £20m in 2014/15.
The Foreign and Commonwealth Office spent £223,000 on consultancy fees to Deloitte over the last three years, £989,000 on fees to EY, £388,000 on fees to KPMG and over £2m on fees for PwC's services. Overall, it spent £3.6m on Big Four services. It also spent over £4m in fees to other consultancy firms.
The Northern Ireland Office has used the services of PwC once in the last three years for the provision of VAT advice. It added that the cost to the public purse was £1,350. The department also confirmed that it has not used the services of any other consultant firms in the last three years.
Both the Scotland and Wales offices said they have not used the services of the Big Four or other consulting firms in the last three years.
The Government Legal Department (GLD) and the Attorney General’s Office informed Hodge that they have not procured any consultancy advice or support in the last three years but added that the GLD has used PwC and KPMG to provide support to litigation cases involving the Ministry of Defence and the Foreign and Commonwealth Office.
PwC fees totalled more than £3m over the three years and KPMG’s totalled almost £760,000.
Over the past three financial years Her Majesty’s Crown Prosecution Service has spent £47,440 on consultancy services to provide general advice and support to the chief inspector and £6,662 to assist with a review of the shape and size of HMCPSI.
Departments are bankrolling the Big Four consultancy firms to the tune of £600m
The Serious Fraud Office (SFO) paid £8,732 to Deloitte in 2014/15 for consultancy services and £4,800 to KPMG. It paid over £22,000 to PwC for consultancy services over the last three years.
The Crown Prosecution Service spent £56,960 in consultancy fees to Deloitte over the three years.
The Ministry of Justice said it was not possible to answer the question in the time allowed and preferred to write to Hodge in due course with the information requested.
The Department for Health used PwC’s services 60 times in the last three years, with fees amounting to £9.7m. It used Deloitte’s services 32 times, with total fees of £4,311,024.
EY’s services were used eight times with fees of £772,625 and KPMG’s services were used 3 times with fees totalling £476,643. Overall, the Department for Health spent over £15m on Big Four fees.
The Department for Education used PwC’s services 12 times over the last three years with payments totalling over £1.3m. Deloitte’s services were used 26 times with payments totalling almost £18m. EY’s services were used three times, costing the Department for Education over £1.4m. The department used KPMG’s services six times over the three years and fees came to £3.4m. That brings total Big Four fees to just over £24m.
The department turned to other consultants 580 times over the three-year period for their services and fees totalled almost £9.5m.
The Department for Transport said it was unable to provide the information in the format requested.
The Department for Environment, Food and Rural Affairs spent £481,600 on fees to Deloitte over the three years, over £3.3m on fees to EY, £60,000 to KPMG and almost £3.8m to PwC.
The Department for Communities and Local Government spent £39,500 on Deloitte's services in 2015/16 and £41,565 on EY's services. The department did not use any Big Four services in 2014/15. In 2013/14, the department spent £20,000 on fees to EY and £157,519 on fees to PwC. In total, the department spent £258,584 on Big Four fees.
The Department for Work and Pensions said it was also unable to provide the information because it would “incur a disproportional cost to the Department because of how the data is held on our systems, and the time and resource required for extracting and analysing it".
The Government Equalities Office confirmed it has worked with consulting firms on two occasions to support Ministers’ objectives to eliminate the gender pay gap, at no cost to the public purse.
The newly-formed Department for Business, Energy & Industrial Strategy (BEIS) did not provide a table of figures but instead directed Hodge to the ex-DECC and ex-BIS departmental pages, which contain all monthly transactions in excess of £500.
The accounts show that in 2015/16, DECC spent £2.97m on the Big Four; £118,043 on Deloitte, £1.02m on KPMG, £611,988 on EY and £1.21m on PwC.
In 2014/15, DECC spent £6,570,536 on Big Four services; £361,198 on Deloitte, £1.51m on KPMG, £601,191 on EY and £4.08m.
In 2013/14, DECC spent £6,177,532 on Big Four services; £1.71m on Deloitte, £2.34m on KPMG, £35,733 on EY and £2.08m on PwC.
In 2015/16 the BIS department spent £4.06m on Big Four services; £1.92m on Deloitte, £229,665 on KPMG, £317,768 on EY and £1.59m on PwC.
In 2014/15, the BIS department spent £9.27m on the Big Four; £1.77m on Deloitte, £443,938 on KPMG, £145,319 on EY and £6.91m on PwC.
In 2013/14, the department spent £6.76m total; £2.44m on Deloitte, £340,255 on KPMG, £30,000 on EY and £3.95m on PwC.
Number of secondments
Hodge also asked government departments to publish a list of all secondees from the Big Four and other consulting firms in the last three years and what their role was. She discovered there have been at least 20 secondments from the Big Four.
The FCO, the DCMS, DEFRA, the Government Equalities Office, the Scotland Office, the Wales Office, DFID, the Ministry of Justice, the Northern Ireland Office, the Attorney General’s Office, Government Legal Department, Crown Prosecution Service or Her Majesty’s Crown Prosecution Service Inspectorate all confirmed that they have not employed secondees from the Big Four or other consulting firms in the last three financial years.
It is scandalous that rather than channelling aid money through charities and organisations, ministers are handing out millions to multinational accountancy firms
The Home Office said it has seconded less than five people from consultancy firms including the Big Four in the last three financial years. It added that it is not possible to provide a further breakdown as it would breach the department’s obligations under the Data Protection Act 1998, not to disclose to a third party, personal information about another person.
The Department for Communities and Local Government said it has not had any secondees in the last three financial years from any of the Big Four firms but has had a total of seven secondees from other consulting firms. Three of the seven secondees are still working with the DCLG.
The Department for Education reported that it hosted four secondments from KPMG in 2013/14. All four individuals were seconded into external assurance roles in the department’s Education and Funding Agency. There were no secondments from PwC, Deloitte, EY or any other consulting firm in 2013/14, and none from any consulting firms in 2014/15 or 2015/16.
The newly-formed BEIS department reported that it has had two secondees from Deloitte in the last three years. One secondee to the former DECC for the 2015/16 period and another to the Office of Life Science – a joint Department of Health/BIS team – for the 2013/14 period. The latter held the role of director and information is not centrally held on the former.
The former BIS department had one secondee from PwC from 2014/15, who held the role of strategic advisor and another secondee from another unspecified consulting firm.
The former DECC also had a secondee from another unspecified consulting firm in 2014/15, who held the role of corporate finance advisor.
The Department for Health confirmed that the Office for Life Sciences employed a secondee from Deloitte from 2014 to 2016. The department also had five or fewer secondees from PwC, EY and Deloitte during the same period but at lower grades.
The Department for Transport employed four secondees from the Big Four over the past three years but could not provide further details.
The Ministry of Defence said fewer than five employees from PwC, Deloitte, EY, KPMG and other consulting firms were seconded to the Ministry of Defence within the last three years but due to the low numbers involved, a breakdown of companies and job roles has not been provided.
The SFO had one KPMG employee with it on secondment in 2015-16 covering a principal investigator role as an accountant on an operational case team.
In 2013/14, the Treasury had one secondee from Deloitte, one from KPMG and one from PwC. In 2014/15 there was one secondee from Deloitte and one from Grant Thornton. In 2015/16 the Treasury had one secondee from each of the Big Four firms and one from Grant Thornton.
HMRC does not have any secondees from the firms mentioned, and said it can only answer the question on secondees for previous years at disproportional cost
Similarly, the Department for Work and Pensions said the information requested is not collated centrally and could only be provided at disproportionate cost.