Ministers have been accused of playing “fast and loose” with public money after auditors discovered an increase in Whitehall spending on consultants and temporary staff who are paid up to £1,000 a day. The National Audit Office (NAO) found that central government is spending up to £1.3bn on specialist staff whose civil service counterparts would cost on average half the amount.

In a report issued on Wednesday, auditors said that 47 specialists brought into central government are being paid more than £1,000 a day. These include 11 consultants in the Department for Transport, 10 in Revenue and Customs, seven in the Department for Business, Innovation and Skills, and five in the Department for Education. According to the NAO’s calculations, specialist temporary staff are paid twice as much as their civil service counterparts.



The Home Office is singled out for criticism by the report after figures showed that more than four out of five temporary departmental staff have worked there for more than a year. One staff member has been paid £1.4m over seven years while logged there as a temporary employee. Overall spending on consultants and temporary staff has increased by up to £600m since 2011/12, auditors concluded, after being cut back in 2010 as a result of austerity measures.

The conclusions have angered MPs and unions, who say the government is wasting public money in order to satisfy short-term political goals. Meg Hillier, chair of the public accounts committee, said: “I am concerned that some departments are playing fast and loose with taxpayers’ money in their use of consultants and temporary staff.



“It is unacceptable that a lack of planning and an inability to recruit and retain permanent staff with the right skills at the right time means that departments are overly reliant on external staff in key areas such as project management and IT. The taxpayer risks losing out twice, with employment costs often twice those of employing a permanent member of staff, and a loss of skills when their contract ends, perpetuating existing shortages.”



Spending on consultants and temporary staff could rise further as departments invest in transformation projects aimed at cutting overall costs following George Osborne’s 2015 spending review, the report found. In 2014/15 the main 17 government departments spent between £1bn and £1.3bn on consultants and temporary staff, the NAO reported. More than three-quarters of all consultancy work is won by major accounting firms including Pricewaterhouse Coopers, Deloitte, KPMG, Ernst & Young, PA Consulting Services and McKinsey & Co, the report said.

The Cabinet Office and the Treasury spent the biggest proportion of their budgets on consultants and temporary staff, the report found. “Since 2009-10, the government has used spending controls to reduce its use of consultants and temporary staff, and by 2014-15 spending had fallen by £1.5bn,” the report said.

“However, spending has increased by between £400m and £600m since 2011-12, suggesting that this was more of a short-term reduction than a sustainable strategy. In the short term, departments will need to draw on consultants and temporary staff to make up for shortages in these skills in the civil service. In the longer term, departments will need to develop workforce, skills and capacity plans to reduce their dependence on external skills.”

In 2014-15, ministries spent an average of 6% to 8% of the cost of their civil servants on outside staff, with individual departments ranging from 1% at HMRC to 35% at the Cabinet Office. The Cabinet Office recommends that departments review requests for outside work, but the NAO found that this internal approval process is weak in some departments, and even the Cabinet Office itself did not always follow its own procedures.



Unions believe that departments are unable to plan staffing strategically because they are forced by the Treasury to meet spending targets on an arbitrary timetable. Mark Serwotka, the general secretary of the Public and Commercial Services union, said: “It is no surprise to find the civil service still does not have the use of external consultants under control, because departments are being forced to make arbitrary and excessive spending cuts to a political timetable.”

A Cabinet Office spokeswoman said the total spend on consultants is still less than half of that in 2009-10. “Of course we’ll need specialist expertise, especially where government is undertaking complex transformative projects and needs to draw on experienced minds,” she said. “But we only do this when the key skills are not readily available within the civil service and where it delivers better value for taxpayers.”