A case for the adviser?

31 October 2012 As central government faces some serious questions over how departments are run, could we be seeing the impact of efforts to cut the use of external advisers?
When the coalition took office, it became immediately clear that advisers were no longer flavour of the month.

Ministers were quick to criticise the number of advisers working across the public sector, from the NHS, through Building Schools for the Future projects to the central departments themselves. The most public manifestation of this dislike was the so-called ‘bonfire of the quangos’, which saw several agencies that had been advising government scrapped.

But some recent developments suggest the purge of the advisory community may have gone too far, too fast.

First, there was the debacle surrounding the West Coast Mainline franchise procurement. Transport Secretary Patrick McLoughlin and an interim report on the process both blamed failures of officials within the department for the fiasco.

Sources in the industry agree that the collapse of the deal following a variety of failures and inconsistencies throughout the bidding process smacks of a lack of sufficient advice being sought. If that is the case, it begs an interesting question: how much would the extra advice have cost and would it have been less than the £40m taxpayers are now having to pay out to the bidders in compensation?

The fact that this came to light as a result of the losing bidder, Virgin, launching a legal challenge should also set a few alarm bells ringing in government. At a time when private contractors are fighting fiercely for the scraps being thrown to them by the government, there is the potential for more challenges in the future – especially as the private sector will no doubt be emboldened by the success in this case. Officials in the procuring offices of all departments will need to make sure every t has been crossed and i dotted.

The second case in point is the recent Commons public accounts committee report into the financial management at the Department of Health. While the criticisms cover a period far longer than just the last two-and-a-half years of coalition (for example failing to estimate the liabilities it is exposed to through PFI deals), some more recent problems also shine light on the lack of advisory support on offer.

In particular, the committee said the department was unable to explain what happens to a trust that goes bankrupt and what the process for that trust will be – despite the fact there is already one trust that has been put into the Regime for Unsustainable NHS Providers.

The government is often criticised for cutting too far, too fast. This is often in relation to its apparent refusal to provide a fiscal stimulus, but its attack on advisers could increasingly be seen in this light.


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31 October 2012.


A case for the adviser?

As central government faces some serious questions over how departments are run, could we be seeing the impact of efforts to cut the use of external advisers?


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