21 December 2010 | Lindsay Clark

The Cabinet Office should require all UK government departments to record their spending on consultants.

Today’sreport from the Committee of Public Accounts (PAC) said Whitehall departments must record use of consultants and interims on a consistent basis and routinely measure the benefits delivered against the objectives. This could help provide a government-wide view of the value provided by consultants, it said.

“We do not accept the view expressed by the Cabinet Office that it is impossible to assess the value for money of consultancy work, and we are surprised that there is such a poor central understanding of spending on consultancy,” the PAC report said.

The committee was responding to a report from the National Audit Office (NAO) which estimated that, in 2009-10, total spending on consultants across central government was £1.5 billion.

The NAO report said: “We have found a number of areas where departments have not been acting as intelligent customers.”

Margaret Hodge, PAC chairwoman, said: “Despite spending more than £1 billion a year on consultants and interim staff, central government departments are largely in the dark about whether this represents value for money.

“There are of course legitimate reasons for a department to buy in specialist skills where they are in short supply internally. But departments have become too reliant on buying in core skills, rather than developing them in their own staff.”

In November, SM reported that Sir Gus O’Donnell, head of the civil service, told the PAC: “It’s always going to be very hard to measure value for money because you can measure the inputs, but not the outputs. I can’t measure the impact of what consultants deliver.”