Department for International Development: Consultants (Hansard, 2 December 2004)

§ The Lord President of the Council (Baroness Amos)
My Lords, in the current parliamentary Session, which started on 23 November, there have been three Parliamentary Questions and five letters from members of the public about DfID's expenditure on consultants.

§ Baroness Rawlings
My Lords, I thank the Minister for that Answer. In light of the rapidly growing amounts of money spent on quangos, consultants and administration since 1997, can she inform the House whether DfID is on track to keep expenditure on administration—not on projects—to the £220 million predicted for this financial year and to the published plans of nearly £240 million for the following year? If not, what plans do the Government have to evaluate the cost-effectiveness of those administration costs?

§ Baroness Amos
My Lords, the percentage spent on consultants in the Department for International Development has decreased, not increased, since 1997. The figure of £697 million which was published in a recent Daily Telegraph article on consultants covers all the contracts awarded by the Department for International Development. In fact, the amount spent on consultants was only £205 million.
On the specific points raised by the noble Baroness, I have been involved with the Treasury in looking at public expenditure in the Department for International Development. In those discussions the department has made it absolutely clear that it intends to stay within its spending limits.

§ Baroness Northover
My Lords, will the Government set up an independent assessment of the impact of 542 privatisation on poverty reduction in developing countries, on which some of these consultants have been advising, given the lack of regulation in many of those countries with which the poorest might be protected? Can she also tell me why Adam Smith International was paid £430,000 by DfID to run a public relations campaign in Tanzania to persuade the people there to accept privatisation, including the privatisation of water?

§ Baroness Amos
My Lords, on the point about independent assessment, the noble Baroness may be aware that my right honourable friend the Secretary of State for International Development has already set up a review to look at the issue of aid conditionality. We have also pressed the World Bank to do exactly the same. On the specific issue of the impact of privatisation on how we in DfID use consultants, that very much depends on the priorities of the developing country's government with whom we are working. We do not take a one-size-fits-all approach. I hope that the noble Baroness will accept that I shall write to her on the issue of the £430,000. I have not been briefed on that point.

§ Baroness Whitaker
My Lords—

§ Lord Davies of Coity
My Lords—

§ Lord Marsh
My Lords—

§ Lord Grocott
My Lords, let us take it one at a time. There is plenty of time. Let us try the Cross Benches first.

§ Lord Marsh
My Lords, much more important than the actual cost of the fees—consultants, like lawyers, are always with us—is the success ratio. Does the Minister have any indication of the extent to which contracts have been discontinued because of failure to deliver that which they were originally contracted to supply?

§ Baroness Amos
My Lords, I cannot answer the noble Lord's question specifically, although I shall see if I can give him an answer in writing. We do, however, ensure that we receive value for money. First, we agree with the developing country's government what they require. Then, in a very specific process, the success criteria are identified. The project is then monitored while it is being carried out, and it is evaluated at the end of the process. Different criteria are used depending on the project or programme. I shall write to the noble Lord if I can add anything further to that.

§ Baroness Whitaker
My Lords—

§ Lord Davies of Coity
My Lords—

§ Lord Grocott
My Lords, I hate trying to adjudicate between England and Wales. Let us hear from my noble friend Lady Whitaker.

§ Baroness Whitaker
My Lords, will my noble friend confirm that a vast proportion of DfID research, both 543 in-house and out-house, is spent on work that has a measurable effect on reducing poverty, such as new microbicides to prevent the spread of HIV, new strains of rice, better tax collection services and many others?

§ Baroness Amos
My Lords, my noble friend is quite right. The amount spent by the department on research was also included in the global figure used in a recent Daily Telegraph article alleging that the overall sum was spent on external consultants.

§ Lord Davies of Coity
My Lords, can my noble friend the Leader of the House advise us of the amount of funds that this Government have made available to the Department for International Development as compared with that provided by the previous administration?

§ Baroness Amos
My Lords, my noble friend will know that the amount we spend on international development has increased substantially since 1997. I shall be very happy to write to him to give the exact figures. We have made a commitment to spend £1 billion in Africa by next year. That is a substantial increase on the amount that we inherited for international development. I sincerely hope that the party opposite will make a similar commitment in its manifesto commitments.

§ Lord Mackie of Benshie
My Lords, the Minister has assured us that the Government examine the value given by consultants. Can she tell us how many times consultants have been found wanting?

§ Baroness Amos
My Lords, this is quite a difficult question to answer, and I shall tell the noble Lord why. Success criteria are identified at the beginning of the process. Quite often, a consultant advises a developing country's government on the range of options available if that government want to go down a particular road. That government will then make a choice. They may or may not be happy with the choice they have made, but the consultant will have identified the options available to them. That is why I say that it is quite difficult to answer the question. The consultant often meets the criteria identified, but the government's feeling later in the process about the choice which they themselves have made may be quite different.

§ Lord Barnett
My Lords, I am curious to know how my noble friend managed to persuade the Treasury that employing all these consultants makes sense. Can she assure the House that it was not simply because she was able to say that she has reduced the number of officials? Has there ever been a comparison between the cost of doing the job in-house with her officials and the cost of employing consultants?

§ Baroness Amos
My Lords, we look at a range of issues. One important issue is that a range of skills are required but do not necessarily rest within the Department for International Development. The other 544 issue we look at is whether officials from other departments are able to assist. We look at the poverty strategy of the developing country's government, discuss with that government their priorities and work with them on ways in which we can support those priorities.