“Lord Agnew wrote last month in a leaked letter to senior civil servants, an “unacceptable” reliance on management consultants has “infantilised” Whitehall and deprived “our brightest [public servants] of opportunities to work on some of the most challenging, fulfilling and crunchy issues”.”
Clare Foges www.thetimes.co.uk
As the scale of the coronavirus threat emerged early this year, most scented danger. Others caught the whiff of something else: the gravy train to end all gravy trains. Weekly come the stories of huge sums of public money spent with seeming disregard for value, without tender or transparency, for services of dubious value or poor quality, to companies and consultants which often have close links to power. Though public attention is fixed on lockdowns and curfews, a bad smell grows — and the government would be wise to start clearing the air.
Hundreds of millions of pounds were spray-hosed at companies promising to provide PPE. The crowdfunded Good Law Project has been plugging away for months to seek answers about some of the more questionable suppliers. A sweet manufacturer from Co Antrim swapped gob-stoppers for gowns and won contracts worth £107 million without competitive tender. Ayanda Capital, a family office specialising in currency trading and private equity, signed a £252 million contract for safety equipment, later supplying 50 million masks that could not be used. While there may be good reasons for these decisions, the government’s persistent secrecy on this front does not allay suspicions of incompetence at best and deals for mates at worst.
Occupying the next carriage of the gravy train we have the management consultants, the global giants populated by former government advisers. The Whitehall procurement system “hugely favours large established companies with powerful political connections — true corporate looters”. So said Dominic Cummings once, but these large established companies have done rather well since March. The top Covid supplier by volume is PWC, whose 20 contracts are worth £24 million. McKinsey’s 16 projects add up to £38 million. KPMG was paid almost £1 million for three months’ work on the Nightingale hospital in Harrogate.
Last Friday it emerged that the bill for private consultants on Covid-related projects had reached £175 million, causing Meg Hillier, the chairwoman of the public accounts committee, to explode: “What on earth are they doing? It is a very steep increase in a very short space of time. You cannot just tear up the rules and dish out taxpayers’ money in this way.”
The smell worsens around the test and trace system, run by the McKinsey alumna Dido Harding. Her old company pocketed £560,000 for deciding on the “vision, purpose and narrative” of the programme, a gold-plated slideshow it would be intriguing to see given the shambolic “narrative” surrounding the scheme. More than 1,100 consultants from Deloitte are now working on test and trace, while last week we learnt that executives at Boston Consulting Group are being paid as much as £6,250 a day for their input. Beyond the consultants, companies such as Serco, Sitel, G4S and Mitie provide the call handlers, organise testing sites, dispatch tests and so on, pushing the total cost of the system up to £12 billion.
I can hear the exasperated ministers’ cry: “Don’t you know there’s a bloody war on?” Don’t you realise that speed was of the essence, that when infections were surging the government didn’t have the luxury of conducting long tender processes? Or that when doctors are resorting to wearing bin liners it’s all hands on to the pump to provide PPE? Or that national diagnostic systems are not constructed without extra manpower? Having worked in government I have some sympathy but what does seem extraordinary is the reluctance to require much in the way of performance in exchange for these vast sums of money.
It would be hard to quibble with the sums spent on test and trace if the whole thing had been running as though on oiled castors, but it hasn’t. In the week ending October 7 only 62.6 per cent of close contacts of people who tested positive were reached through the system — the lowest percentage yet. A clear failure, yet where are the reparations, the resignations, the contracts terminated? In the web of contractors and sub-contractors the thread of accountability is lost. Last month David Davis, the Tory MP and former cabinet minister, asked the Department of Health and Social Care “what performance targets are in place for commercial providers of track-and-trace functions” and “what penalties can be imposed for failure to meet those targets”. Last week the health minister Helen Whately replied that such penalties were not included in contracts with Serco or Sitel because they “are often unenforceable under English law”. Come again? What is the point of a contract if between the lines it reads “please take a lot of money with no penalty if you don’t deliver”?
The government must start to correct its mistakes now, before the inevitable public outrage. It shouldn’t be difficult to provide the reasoning behind its choices of PPE suppliers or to give an update on how these firms have performed. Surrendering basic information on these deals only at the prodding of crowdfunded campaigners like the Good Law Project is not a good look. Where companies have failed to deliver, the government should be publicly, vociferously pursuing them on behalf of the taxpayer and including performance targets and penalties in future contracts.
Beyond this housekeeping is a greater challenge: addressing the government’s over-reliance on the private sector to think for it, strategise for it and deliver core functions for it. Of course the virus was going to demand more hands to the pump, and importing experts is not in itself a bad thing; most of us do not wish to go back to pure state monopolies with their inefficiency and grinding slowness. But the extent of the Covid gravy train reveals more clearly than ever how dramatically the capability of the state has been eroded.
It’s a vicious circle: cut back on public-sector expertise and you rely more on expensive outsiders; rely more on outsiders and the public sector can “safely” be shrunk further. As the Cabinet Office minister Lord Agnew wrote last month in a leaked letter to senior civil servants, an “unacceptable” reliance on management consultants has “infantilised” Whitehall and deprived “our brightest [public servants] of opportunities to work on some of the most challenging, fulfilling and crunchy issues”. And although there is a place for the Sercos and G4Ss to help with the delivery of public services, surely outsourcing should not be the default for a well-resourced, modern state?
There’s nothing wrong with good private companies filling gaps where necessary, but long term we should be aiming for a public sector that has in-house expertise and does not require armies of management consultants to keep the cogs turning. If, as Boris Johnson is fond of saying, we are to “build back better” after all this, ambition must not be limited to new railways, houses and energy projects but to a rebuilding of the run-down parts of government too.