Wales politics

Public sector 'could save £23m on consultants fees'

Auditor general for Wales Huw Vaughan Thomas
Image caption Auditor general Huw Vaughan Thomas says the public sector could save £23m

The public sector in Wales cannot prove it is getting value for money from the £133m it spends on external consultants, a spending watchdog has warned.

The Wales Audit Office (WAO) says public bodies could save £23m by following best practice.

The amount spent on consultants fell by £40m in three years.

But a report criticises poor record-keeping and blames public bodies for not collaborating with each other.

The auditor general, Huw Vaughan Thomas, said: "Consultants can be a great help to public bodies in offering specialist advice to help deliver new services and initiatives quickly, but there are risks if they are not managed effectively.

"Although expenditure on consultants has reduced since 2007-08, public bodies need to adopt the good practice identified in this report to improve value for money and deliver efficiency savings."

Parts of the public sector did not have robust ways of deciding when consultants should be called in, the WAO report says.

Consultancy services were "rarely" supported by business cases that justify the need to spend money on bringing in outside experts.

The report calls for tighter controls on hiring consultants and for the public sector to look at other alternatives, including using its own staff.

Local government spent the most on consultants in 2010-11 - a combined £86m for Wales' 22 councils.

The Welsh government spent £42m - 16% of its salary costs. This compares to an average of 3.1% of salary costs for councils and 1.6% for the NHS.

'Significant financial challenges'

However, the Welsh government's bill for consultants fell from £52m in 2007-08, partly thanks to cutting spending on management consultants.

Property and construction consultants earned £54m from the public sector in 2010-11. They were followed by business and management consultants who were paid £46m.

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Media captionPaul Dimblebee, director at the Wales Audit Office, said some spending could be more effective

Darren Millar, chairman of the assembly's public accounts committee, said: "Given the significant financial challenges they face, it is of some concern that public bodies in Wales are not taking advantage of the potential to achieve the substantial savings identified by this report.

"Where they are needed and are well managed, consultants can be incredibly useful and very worthwhile.

"But the failure to exercise good practice in the procurement and management of consultants puts the value of the public money spent on them at considerable risk."

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