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Following on from a BBC Newsnight report into Whitehall spending on external consultants last week, Derek Kelly, managing director of Optionis, the contractor and freelancer services group, claims that consultants make a key contribution to government departments and offer taxpayers value for money.
Figures obtained by the BBC programme show that at least 30 consultants worked in government departments last year on day rates of between £1,000 and £2,000. The Department for Transport took on 10 consultants, while the Ministry of Defence (‘MoD’) said it had recently hired someone earning up to £3,000 a day. Separate figures show the MoD spent £137 million on “technical consultants” last year.
Unions and lobby groups such as the Taxpayers’ Alliance reacted angrily to the findings, but Kelly leapt to the defence of consultants. He said: “Consultants play an important role in ensuring complex and important projects are delivered on time, and are a vital cog in the Whitehall machine…Their contribution should be recognised and valued. In time of austerity they actually deliver value for money, despite the eye-catching headlines.”
“The day rates being paid to consultants represent the total cost to the public purse. There are no employer National Insurance (NI) contributions, no holiday pay and – most importantly – no pension costs to add on….Conversely, a permanent employee earning £500 a day could actually be costing the government – and therefore taxpayers – an additional 35% or 40% on top of this… Sadly, such nuances are rarely reflected in mainstream media coverage and the wider public debate.”
He added: “After the recent controversy over high-profile civil servants operating through personal service companies (PSCs), the last thing public-sector contractors need is another witch hunt…The government, quite rightly, often wants the best talent to work on a specific project for a short period of time. In these circumstances, bringing in consultants – even on high day rates – is more cost-effective and sensible than hiring permanent employees.”
Optionis is the parent company of contractor accountancy firm ClearSky and payroll and back office services provider Parasol. The company recently went through a secondary buyout.