Brexit Consultancy Costs Contents

Conclusions and recommendations

1.Departments have again proved overly secretive with their preparations for Brexit, taking far too long to publish details of their consultancy contracts and then failing to meet their own basic standards of transparency. In February 2018 we reported that the shortage of information in the public domain about what departments were doing to support Brexit, including information on their workstreams, was undermining scrutiny of progress. Even now, 18 months on, departments are taking on average 119 days to publish basic details of their EU Exit consultancy contracts, and in some instances as long as 237 days, compared to a government guideline of 90 days. Some contracts have not been published at all, and at the time of our evidence session those contracts which had been published were all significantly redacted, again despite a government expectation that contracts should be published in full. There were key components of the contracts which were not publicly accessible, despite being advertised as such: it was not until this Committee formally requested that the statement of requirements for each contract was published that the Cabinet Office made them accessible online. The Cabinet Office acknowledges the delay in publishing contract details but attributes this to administrative oversight. Delays coupled with the extensive redactions again demonstrate a marked reluctance by departments to be transparent about how they are preparing for Brexit.

Recommendation: The Cabinet Office and the Department for Exiting the European Union should commit to making the government’s preparations for Brexit transparent; this should include making information on the degree of progress made against the various workstreams available and timely publication of details on contracts awarded to support Brexit.

2.The skills accessed through the Cabinet Office’s consultancy call-off arrangement suggest departments had been more focused on developing strategy than seeking support for practical implementation. We welcome the Cabinet Office’s establishment of a centralised call-off arrangement to facilitate departments’ access to consultancy services so it is quicker, more efficient and lower cost. The call-off framework allows departments to access consultancy services to help think through, shape and deliver Brexit preparations. So far, however, most of the consultancy services accessed have tended to fall under the category of thinking and shaping rather than delivering, despite the former traditionally being considered a strength of the Civil Service. We reported in February 2018 that the Department for Exiting the European Union had not been quick enough to move departments beyond planning for Brexit and onto getting things done, and we are concerned that departments continue to be slow to move into implementation. The Cabinet Office acknowledges that it took some time for departments move into the implementation phase.

Recommendation: In its Treasury Minute response to this report, the Cabinet Office should set out the extent to which departments are now using consultants to support implementation and delivery of preparations. It should also include a breakdown of how much has been spent as of July 2019 on Lot 1 (“thinking and shaping), Lot 2 (“further shaping and moving towards delivering”) and Lot 3 (“delivery”).

3.We are concerned that the bulk of Brexit consultancy contracts by value have been awarded to a small group of big firms and that the Cabinet Office seems overly-complacent about this despite previous government commitments to contract with more small and medium-sized enterprises. By value, 96% of consultancy work via the Cabinet Office’s arrangement has so far gone to just six firms. All of these firms are major global companies and the Cabinet Office told us that the distribution is not surprising as these firms possess deep pools of expertise. We have reported previously that the Cabinet Office’s arrangements for procuring consultancy tended to benefit large firms, and that across all contracts there was minimal use of small and medium-sized enterprises (SMEs)—despite government aspirations, led by the Cabinet Office, for much more government work to go to SMEs. It is therefore of concern that almost none of the Brexit consultancy work has gone to SMEs.

Recommendation: The Cabinet Office should write to us within three months setting out what it will do to incorporate a wider range of consultancy firms, including SMEs, in future frameworks.

4.There is a longstanding and widening discrepancy between Cabinet Office and departmental data on consultancy spending across government. There is an increasingly large gap between what departments report they have spent overall on consultancy services, not just on Brexit, and the total based on the Cabinet Office’s analysis of invoices. For 2017–18, the Cabinet Office’s figure of £1.5 billion compares to a total of departments’ figures of just £0.3 billion. The Cabinet Office confirmed that it and departments have not all been working to the same definition of consultancy. We have highlighted issues with the definitions before and suggested action on this in 2016. Despite this finding, the Cabinet Office tells us that it only spotted the problem at the end of 2017, and that in response it revised its criterion for approving consultancy contracts in April 2018. However, its 2018 plans to address the underlying problem of defining expenditure properly did not go ahead, due to work on Brexit taking priority. The data problems have still not been resolved and there is still no clear picture of how spending breaks down across consultancy and related services.

Recommendation: The Cabinet Office must urgently address the increasing inconsistencies in the reporting of consultancy and professional services spending across government, ensuring that its own overall spend matches up with that reported by departments. In its Treasury Minute response to this report, the Cabinet Office should clearly set out the reasons for the discrepancies and the accurate figures.

The Cabinet Office should work with departments to establish a shared definition of consultancy, ensuring that this is sufficient to exercise effective control over this area of expenditure.

Published: 12 September 2019