How much does a consultant cost, to advise on cuts to consultancy costs?

The Budget on 24th March 2010 was accompanied by a flurry of press releases summarising departmental efficiency and expenditure savings in the years ahead.

One element caught my eye and that was the projected savings on consultancy costs for each government department.

Adding them all together (just the consultancy element) the planned savings were of the order of £330m to be made across departments from 2011-12.

What is not evident is quite simply that if this is the ‘savings in consultancy costs’ figure, what on earth is the total consultancy costs for the period. Indications are that savings of 50% are being looked for in consultancy costs (with about £320m savings by reducing marketing and communications costs by 25%). Therefore, it is probably the case that consultancy costs incurred by government departments are northwards of £700m – this is quite a staggering figure.

No doubt the government departments have also incurred consultancy costs finding out what the savings in consultancy costs could be! That is the way it seems to work – call in the consultants and ask them how we can save costs on consultancy expenditure and whilst we’re at it get another quote to see what it would cost to have some consultants advise on what that exercise should cost.

This is all a bit like the recent report that a new quango, the Infrastructure Planning Commission was enjoying a £9.3m a year budget – with staff and offices in Bristol – to speed up the process of approving controversial infrastructure projects (eg nuclear power plants and the like) but so far the government has not provided the legal terms of reference by which it is meant to act. The quango chairman trousers £900 per day for turning up. The government is now looking to save £500m on quango costs – so what is the total cost of quangos at present?

This is how our money is spent!

Published on Mar 29, 2010 by Neil Thomas