Despite recommendations in 2002 and 2007 to increase governments core skills, the cabinet office feels that they have not done enough.
The MPs accepted that it takes time to grow such skills but there should have been more progress after 16 years. Particularly worrying was that IT and programme and project management consultancy had increased from 50 per cent to 60 per cent of all consultancy spend since 2006/07. Where skills do exist within government, the committee said, departments lack the knowledge and flexibility to deploy people to where they are needed. Also, pressure to cut training budgets may affect departments’ ability to develop the internal skills they need, reflecting a short-term financial cut leading to longer term unnecessary spending.
Reacting to the statistic that spending on consultants and interims by central government departments was more than £1bn in 2009-10, the committee said it was not clear why some departments used consultants more than others: for every £100 spent on staff costs, the Department for Transport spent £70 on consultants, a very high proportion when compared to HM Revenue and Customs which spent only £2. Central government had no idea about how arms length bodies used consultants, nor did it have any up to date data on their spending. The National Audit Office estimated that arms length bodies spent at least £700m on consultancy in 2009/10.
Committee chair Margaret Hodge said: “Despite spending over £1bn a year on consultants and interim staff, central government departments are largely in the dark about whether this represents value for money. There are of course legitimate reasons for a department to buy in specialist skills where they are in short supply internally. But departments have become too reliant on buying in core skills rather than developing them in their own staff.”s
