Accountancy firm behind paper claiming government had no EU exit strategy was working in Whitehall despite No 10 claims

The accountancy firm behind the leaked memo that claimed the government had no Brexit strategy had been working in Whitehall helping to set up David Davis’s Brexit department.

Deloitte, along with seven other consultancy firms, worked on a short-term contract within the Department for Exiting the EU. In the wake of the critical memo being leaked, Theresa May dismissed it as “produced by an individual from an external accountancy firm, who was not working for government”.

Deloitte, however, had been hired along with other consultancy firms – on a pro-bono basis, or for a nominal fee of £1 – to help set up DExEU after it was created last summer.

The group was charged with internal financial planning, which means it was helping the department to sort out its budgets and so had knowledge of much of its planned work.

Consultants often undertake early Whitehall work for little or no fee to be better positioned for winning more lucrative contracts later.

The Deloitte memo, dated 7 November and leaked later that month, claimed there were cabinet-level splits over the UK’s negotiating strategy and said an additional 30,000 civil servants would be required to deal with the UK’s departure from the EU.

In response to the leak, and to make peace with furious ministers, Deloitte agreed to not bid for Whitehall work for six months and said it had “put forward a plan [to government] … to put this matter behind us”.

However, the revelation that Deloitte had actually been working for the Brexit department prompted an angry response from leave and remain camps. Leave supporters said Deloitte had failed to respect the privacy of its client, while remainers said it proved criticisms of the Brexit process contained in the memo were well-founded.

Richard Bacon, the senior Conservative on the Public Accounts Committee, questioned Deloitte’s suitability to work on Brexit and the number of consultants hired by the department. The senior Brexiteer accused Deloitte of “a certain chutzpah” for “dumping on the government’s approach”. He added: “The government will have to consider very carefully whether this firm is really in a suitable position to receive future Brexit-related work.”

The Liberal Democrat leader Tim Farron, who campaigned for remain, said: “This blows out of the water the idea that Deloitte does not have any idea about the Brexit process and the department’s working.

“Deloitte have been ‘sin binned’ for six months as a result of that memo, but surely they have expertise that would be helpful.”

A Deloitte spokesman said: “This was a two-and-a-half week project supporting the new department on its initial financial plans and budget needs and that work has now ended.”

A spokeswoman for the Department for Exiting the EU said: “As you would expect, the government is utilising the skills of the brightest and best across the civil service as we prepare to exit the EU.

“It is also quite standard for a government department to draw on the advice of external specialists and we make no apology for that. We will continue to bring in expertise from outside as appropriate.”