Consultants' spending needs to be checked

David Mitchell, Director of Council Skills, on the lack of rigour on council spending on consultants

Last time there were deep cuts, the newspapers had stories of swimming pools and libraries being sold off, staff being made redundant and the inevitable union strikes.

"I am forced to do this," said Linda Bellos, Leader of Lambeth Council in 1988.  "If you can find any other way to make cuts without them hurting the people we care about then tell me." She was quickly removed from the leadership, but the problem remained.

Finding savings is a hard process but perhaps I might give you an alternative taret - the consultants.

Tower Hamlets, North Lincolnshire, Swansea, Bromsgrove are all councils that have asked "how much do consultants cost and are we spending too much?" They have come to the same conclusion - "No. They are necessary but we can make some improvements."

If they had asked a different question, such as "Do we get the best advice we pay for" then the answer would most probably be a documented catalogue of horror stories that most public authorities would try to suppress.

Sometimes advice is purchased from a consultant, who in turn produces a 300-page report which bogs down staff and councillors. The conclusion of their report is often turned into a decision (change the traffic flow of the high street, build a new depot etc) and it is then discovered, after the consultant has long gone, that the advice was wrong. The local authority has then wasted the fee, as well as the money spent on the project itself, and further money to correct the consultants advice - which can run into millions of pounds in some cases.

According to the Audit Commission, one local authority employed a "consultant" to handle contracts for building works that were below the tender level. Because the consultant was a qualified surveyor, he knew how much a job should cost. He did what he was asked and handed out the contracts to the agreed members on the providers' list. It was later discovered that a bulk of these jobs was handed to one company, who in turn subcontracted this work to a company that was owned by the "consultant".

Even at a much smaller level, Officers of a council are not always working in the interests of the council. Bloated budgets for purchasing are drawn up (and not checked). There is then a reliance on the tender to get the price down. The Tender does come in below the budget price with a 10% saving and everyone is pleased. However if the officers had used more realistic market prices for items in the budget and not the recommended retail price, they could have made savings as much as 50%!

At CouncilSkills.com a new course has been recently designed to take councillors through areas of capital saving that will not impact of services. Focussing on the subject of consultants and capital spending, participants are shown how to practice a tough regime of checking the consultant's advice and value. In the comfort of their own town hall this low cost course helps councillors find substantial savings for their residents without impacting on services.