Nearly £100m of public money has been spent on private consultancy firms recruited by the government to provide Brexit advice, including no-deal planning, a leaked Whitehall report obtained by the Guardian reveals.
The draft report by the National Audit Office (NAO), which scrutinises spending for parliament, details how government departments have paid at least £97m to Brexit consultants up to April this year and criticises them for not meeting transparency standards.
Marked “official sensitive”, the investigation warns Whitehall spending on Brexit consultancy work could hit £240m by 2020, as officials scramble to plan for departure from the EU.
The leaked figures highlight the government’s reliance on hired consultants to provide expertise as the country heads towards leaving on 31 October without a deal currently in place.
It also shows significant growth in spending on consultants beyond Brexit, rising from £513m in 2015-16 to £1.54bn in 2017-18.
The report, entitled “Departments’ use of consultants to support preparations for EU exit”, is understood to be in draft form, meaning the final figures could be tweaked ahead of its official publication.
The vast bulk (96%) of the Brexit consultancy expenditure under Cabinet Office arrangements – which accounts for £65m of the £97m total – has so far been handed to six consultancy companies: Deloitte, PA Consulting, PricewaterhouseCoopers (PWC), Ernst & Young, Bain & Company and Boston Consulting Group.
Five departments: the Cabinet Office, Home Office, Border Delivery Group, Department of Health and Social Care (DHSC) and the Department for Environment, Food and Rural Affairs, account for the majority of spending via the Cabinet Office.
According to a Whitehall source, it is understood a large proportion of the consultancy relates to planning for a no-deal Brexit. The report splits the type of consultancy work into five categories, with the largest being “readiness for exit scenarios”.
Explaining the category further, it says: “Expertise supporting the work required to ensure government is ready at the point at which the UK leaves the EU, including planning for whether the UK leaves with a deal or with no deal, and possible civil contingency need.”
Giving examples of the type of consultancy work carried out, the report details how the DHSC employed Deloitte for “management support … in ensuring the supply of medical devices in case the UK leaves the EU without a deal”.
It also uses the example of the Border Delivery Group, a new cross-departmental body planning for changes to the country’s borders as a result of Brexit, using Bain & Company between August 2018 and February 2019 to support engagement with the food and car industries to “understand the impact a no-deal exit would have on them”.
The report criticises departments’ lack of transparency, highlighting how they have been months behind publishing details of their Brexit consultancy spending. “Departments have not met the standards of transparency expected by government when publishing expenditure on EU exit consultancy,” it says.
The report says the Crown Commercial Service, responsible for improving government commercial and procurement activity, has issued guidance calling on departments to publish basic information about the award of contracts within 90 days. But the report says it has taken an average of 161 days for basic details of Brexit consultancy contracts to be published, compared with 83 days for all consultancy contracts.
About £65m of the money was spent in a single year between April 2018 and 2019. In early 2018, the report said, a system was put in place allowing departments to access Brexit consultancy services via the Cabinet Office after it “identified that departments required support”.
Using data held by a “sample of four departments and by the Crown Commercial Service”, NAO investigators found an additional £32m was paid to private consultants. The figure “largely relates to contracts entered into before [the] Cabinet Office began offering support” for consultancy services. It brings the total spend on Brexit consultants to £97m but, the report adds, the “actual figure will be higher, as the expenditure identified in our sample cannot be reliably extrapolated to estimate a total figure”.
About £20.9m of the £65m was spent on “readiness for exit scenarios”. The report, dated May 2019, details how it has been compiled at the request of the public accounts committee. It scrutinises spending on consultants in preparation for Brexit between the summer of 2016 and April 2019. It makes clear its function is not to “consider the value for money of the expenditure on consultancy services”.
It adds: “Preparing for the UK’s exit from the EU has been a significant challenge for departments and has required skills that are in short supply … Departments have used consultants for EU exit activities to fill specific skill gaps and to meet immediate staffing needs.”
The government has already faced scrutiny over the extent of spending on external advice over Brexit. In February, analysis found government and public sector bodies had awarded contracts worth £107m for “professional services” in relation to Brexit planning. Tussell, a private firm that analyses public contracts, said the figure included 28 consultancy contracts worth nearly £92m.
A government spokesman said: “It is often more cost-efficient to draw upon the advice of external specialists for short-term projects requiring specialist skills. These include EU exit priorities such as ensuring the uninterrupted supply of medical products and food to the UK.”
An NAO spokesman said: “Our role is to scrutinise public spending on behalf of parliament. Until we finalise this piece of work and report our findings to parliament it would not be appropriate for us to comment further.”
