M25 Private Finance Contract - Public Accounts Committee Contents

3  Use of Advisers

12. The Agency should have done more to limit the amount spent on advisers who will have benefited from the drawn out procurement. It relied heavily on advisers throughout the project, spending £80 million between April 2004 and March 2010.[19] The Agency told us that the monthly invoices from consultants had been checked against the relevant framework agreements, which had been negotiated in a competitive environment. But the Agency was not able to say to what extent the bills submitted by consultants had been challenged in this process.[20]

13. The National Audit Office noted in its report that the Agency's reliance on advisers had built up over time and in part reflected insufficient commercial and technical skills within the Agency. It therefore risked advisers controlling projects and having little incentive to transfer knowledge back to the Agency.[21] The Agency told us that each of the streams of work on the project had been led by its staff, thereby avoiding the issue of consultants managing consultants. The Agency could not tell us what proportion of its staff budget had been spent on consultants. However, it subsequently supplied data which showed that the estimated annual cost of consultants advising the Agency had fallen from £30 million a year to £12 million a year during 2010 and that the Agency's own staff costs were some £140 million a year.[22]

14. We were unable to take evidence from the Agency's Senior Responsible Owner (SRO) for the project from 2005 to June 2009 as he had left the Agency to work for Parsons Brinckerhoff, a company that was then employed as an adviser on the project. This company's contract was terminated, to avoid potential conflicts of interest, in October 2009, when it was taken over by Balfour Beatty, one of the contractors to the project. The Agency told us that as a senior civil servant the SRO had been through the Cabinet Office clearance process prior to leaving, and that one of the resulting conditions of his departure was that he would work on rail projects. The Agency told us that the former SRO was working exclusively on rail projects, but it was not clear what arrangements were in place to ensure that that was the case.[23]

19   C&AG's Report, para 2.23 Back

20   Qq192-198 Back

21   C&AG's Report, para 20 Back

22   Ev 22 Back

23   Qq24, 25, 40-44 Back

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