Public Sector Management Consultancy ripoff...

[jock3]

There was a good programme on Beeb 2 the other night about the huge fees paid to management consultancies by local authorities.

Price Waterhouse Cooper, Capita and Serco are three major culprits. Capita have made over £100m profit annually for the past 10 years.


Interestingly the programme featured two aircraft carriers being built not too far way from the fine city of Edinburgh near the Forth Road Bridge. They were originally supposed to cost £3billion now expected to cost at least £6bn possibly as much as £12bn!

 

[Jack]

I think you've bundled a few things together here that don't have a link.

I do agree about consultants though, although I suspect not all do the same type of work.

To take the consultancy work most likely carried out by the companies you mention. Dead right!

The cost savings they make I'd suggest are questionable and not surprisingly their reports never suggest a reduction in the use of management consultants indeed quite often the opposite!

 

[Davy]

On the face of it there is some merit. IE we need to save £100m. So the consultants charge for the work. The issue is then the percentage allocated for results. So if the company does end up saving £100m, a fee of 17% I think it was is then paid on top of normal charges, so the management consultant gets an additional £17m. This of course coming out of public money if it is a council/NHS etc. So the argument is that the £17m could have been better spent on the project. The consultants argue, that they have still made an overall saving of £80m. Kinda like a debt collector buying a debt and charging for it. But the real issue to me is where the savings have been made. Have they for instance paid off 100 staff? All well and good, except the goverment may well now have to pay for 100 people on the dole, and pay their housing benefits, sudden ESA claims, childcare, prescription charges etc etc So it is well possible the consultants get rich, while the tax payer ends up having to fork out via different channels and the country is significantly worse off.

Alternatively cheap labour, cheap materials, inadequate health staff or numbers employed in hospitals etc. No one questions that at times savings have to be made, but surely in-house management should be of a suitable standard to make savings, or employ someone who can, and who will not take a £17m bonus on top of their agreed wage!

 

[emerald green]

There was a good programme on Beeb 2 the other night about the huge fees paid to management consultancies by local authorities.

Price Waterhouse Cooper, Capita and Serco are three major culprits. Capita have made over £100m profit annually for the past 10 years.


Interestingly the programme featured two aircraft carriers being built not too far way from the fine city of Edinburgh near the Forth Road Bridge. They were originally supposed to cost £3billion now expected to cost at least £6bn possibly as much as £12bn!

freedoms no' cheap jocko