§ Mr. Malcolm BruceTo ask the President of the Board of Trade what assessment he has made of the expenditure of his Department, agencies and non-departmental public bodies on all external consultants including management consultants for each of the years(a) 1979–80, (b) 1989–90, (c) 1991–92, (d) 1993–94, (e) 1994–95 and (f) 1995–96 (i) to date and (ii) as estimated for the whole year; what estimate he has made of such expenditure for 1996–97; and if he will estimate the savings accruing to his Department from the use of consultants in each of these years. [11387]
Mr. John M. Taylor[holding answer 25 January 1996]: The value of contracts let centrally to external consultants including management consultants for 1993–94 was £24.17 million, for 1994–95 it was £6.66 million, and for 1995–96 to date it is £3.96 million. Other information on central expenditure can be provided only at disproportionate cost.
Information on savings is not collected centrally and estimates can be provided only at disproportionate cost.
Information in respect of non-departmental public bodies is not kept centrally and could not be compiled without disproportionate cost.
The above information excludes external consultancies let independently by the Department's executive agencies. I have asked agency chief executives to reply separately.
517WLetter from R. D. Worswick to Mr. Malcolm Bruce, dated 24 January 1996:
The President of the Board of Trade has asked me to reply to your Parliamentary Question about the use of management consultants by the Laboratory of the Government Chemist (LGC), an executive agency of the DTI.From time-to-time we have used consultants to help review or improve internal management functions (including the provision of information technology). They are engaged against "value-for-money" criteria, and only when they can bring particular skills or knowledge not available from within LGC; particular examples are in training, the selection and implementation of accounting systems, and operational review.Over the last six years LGC has spent the following amounts on management consultants:
Year £ thousand (including VAT) 1991–92 25 1992–93 103 1993–94 11 1994–95 277 1995–96 (to date) 46 1995–96 (estimate to year end) 120 I am afraid that information on earlier years can only be provided at disproportionate cost. Forecasts for 1996/97 are not available.
Letter from P. R. S. Hartnack to Mr. Malcolm Bruce, dated 29 January 1996:
The President of the Board of Trade has asked me to reply, in relation to the Patent Office, to your Question about the use of external consultants.The Patent Office made no use of external consultants in 1992/93, 1993/94 and 1994/95. In 1995/96 expenditure to the 31st December 1995 is £113,204 with the full year estimated at £130,000. In 1996/97 provision has been made for £100,000 as continuation of existing work aimed at identifying scope for savings in activities such as marketing and use of computer services. Figures relating to 1979/80, 1989/90 and 1991/92 are not available and could only be provided at disproportionate cost.The savings accruing to the Office from this work will depend on the extent to which better value for money can be obtained while preserving the current quality of service.Letter from Seton Bennett to Mr. Malcolm Bruce, dated 29 January 1996:
I have been asked by the President of the Board of Trade to reply on behalf of the National Weights and Measures Laboratory to your question concerning expenditure on external consultants.I regret that information is not available for 1979–80, but the figures for the years since 1989 are as follows:
£ thousand 1989–90 Nil 1990–91 2 1991–92 10 1992–93 22 1993–94 58 1994–95 22 1995–96 (to date) 30 518W
Cost including VAT Organisation Purpose 1993–94£ 1994–95£ 1995–96 to date £ 1995–96 estimated total £ coopers and Lybrand Accountancy support — 60,000 — — KPMG Market test 445,000 — — —
£ thousand 1995–96 (full year estimate) 35 1996–97 (estimate) 30 The consultants employed have provided exclusively technical advice, mostly related to accounting changes and the development of the Agency's quality system. It is therefore impossible to estimate what savings, if any, may have accrued as a result.
Letter from David Durham to Mr. Malcolm Bruce, dated 29 January 1996:
Mr John Taylor MP has asked me to reply in respect of Companies House Executive Agency to your question to the President of the Board of Trade on the expenditure of external consultants; and the estimated savings derived from the use of consultants by Companies House Executive Agency, for certain years since 1979.The information you sought is as follows:
Expenditure on Consultants Year £ thousand 1993–94 172 1994–95 122 1995–96 (to date) 167 1995–96 (full year forecast) 279 The expected expenditure for 1996–97 is not available at this stage, as Companies House is still next year.
Information on earlier years can only be provided at disproportionate costs.
There are no direct savings attributed to the above consultancy costs, since the consultants were employed by Companies House to provide technical advice on matters such as structural building repairs and IT system design and implementation.
I trust you will find this information helpful.
Letter from Michael Goddard to Mr. Malcolm Bruce, dated 29 January 1996:
The Parliamentary Under Secretary of State for Competition and Consumer Affairs, has asked me to reply to your Question about expenditure on external consultants.2. The Agency did not assume responsibility for letting its own contracts until 1994. Expenditure on external consultants. including management consultants, in FY 94–95 amounted to £237,207, and to date in FY 95–96 to £247,377, Expenditure in earlier years is covered in Mr. Taylor's reply to your question. Planned expenditure in FY 96–97 is unlikely to exceed the level of previous years.3. All the expenditure in FY 94–95 and FY 95–96 involved the provision of strategic advice. Savings resulting from decisions taken in response to such advice will not be quantifiable for some time. When engaging external consultants "value for money" is the Agency's prime consideration.Letter from Peter Joyce to Mr. Malcolm Bruce, dated 29 January, 1996:
519WThe President of the Board of Trade has asked me to reply to your question about expenditure on external consultants and the estimated savings resulting from their employment by The Insolvency Service.Details of the costs associated with external consultants engaged by The Service are:
Cost including VAT Organisation Purpose 1993–94£ 1994–95£ 1995–96 to date £ 1995–96 estimated total £ Ernst and Young Market test and accountancy support 107,800 13,100 — — Price Waterhouse User survey — 124,800 — — Stoy Hayward Contracting out and management Consultancy 76,670 94,150 — — Shreeveport Ltd. Contracting out — 129,000 421,100 506,400 Bevan Ashford Contracting out — — 26,465 36,500 Bond Pearce Contracting out — 10,100 — 10,000 Total 229,470 431,150 447,565 552,900 Prior to 1994 contracts for consultants were let by the Department of Trade and Industry, and information in relation to 1992 and 1993 was provided in a Parliamentary Question No. 146 for Ms Diane Abbott MP dated 25 January 1994, Columns 211–217. Information on consultancies prior to 1992–93 can only now be provided at disproportionate cost.
The Service has also used outside private sector organisations for advice on, development of and delivery in relation to specialist areas such as training, design and information technology systems. Details of the organisations concerned, the payments made to them and any estimate of savings accrued could only be provided at disproportionate cost.
The £60,000 payment to Coopers and Lybrand for accountancy support for the Agency was in and about the setting up of systems to enable it to produce commercial style accounts.
Ernst and Young were engaged in 1993–94 to prepare a specification for the market test of The Service's Central Accounting Unit and to assist with the evaluation of the bids at a cost of £107,800. KPMG were engaged to assist the in-house bid team in the preparation of their bid at a cost of £45,000. The annual saving in the overall cost of the activities market tested is approximately £85,000 in each of the five years of the resulting Service Level Agreement.
Ernst and Young were also engaged in 1995 on accounting reconciliation work for the Central Accounting Unit at a cost of £13,100. This did not produce direct savings but provided independent professional assurance that financial data had been properly transferred to the CAU's new computer system(BANCS).
Consultants have been engaged by The Service throughout the period of the current contracting out exercise which has yet to reach its conclusion. Any estimate of savings accrued as a result could only be determined once the decision has been taken on contracting out.