H & F Council "Wasted Millions" on Unorthodox Consultancies

Audit reveals consultants had no contracts and no judge of performance

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Hammersmith and Fulham Council has been criticised for "wasting up to £12 million" on consultants who had no formal contract and no criteria judging their performance.

The BBC's Politics Show reported on Sunday that an audit by accountancy firm Deloitte looked at the arrangements around consultants employed by Conservative run council and found that only one of seven consultants had a formal agreement.

The report also revealed that there was no evidence of any formal, document selection and recruitment process;

No evidence of any formal performance monitoring;

No complete list of all the consulting companies used by the council.

The report also looked at H & F Homes and found an agreement had been made with a dissolved  company and one formal employee had charged over £21,000 for 25 days' consultancy work.

The council says it has accepted and acted on all the recommendations in the audit. Says Councillor Greg Smith: "Clearly what this Deloitte report showed is that there were some things that we needed to do differently and do better and we have done every single one of them."

The council's Labour Group of Councillors however are not satisfied. Leader Stephen Cowan says on his blog The Cowan Report that the examination of these consultancies was the result of the group's own two year investigation, and that according to their estimates, H&F Council has wasted between £5m to £12m by commissioning consultants for work that was thoroughly unnecessary. 

He says: " The investigation showed that while the Conservatives argued they were cutting the number of staff they employed, they were actually hiring many of them back on inflated private service company contracts which were hidden from public scrutiny. This meant:  

  • Some council bureaucrats were being paid twice from the public purse given that they were former local government employees already on generous final salary pensions (who had often been allowed to retire early) but were then hired back by H&F Council as full time employees for sums ranging up to £1000 per day and more
  • The Conservative-run Council kept no records of how many consultants it employed and initially tried to stop any investigation by the Audit Committee on the basis that it would be “too much work” to compile this information
  • The Conservative Administration got itself into a situation where consultants were hiring other consultants to do work that was unspecified, unmonitored and in many cases unnecessary
  • The Conservative Administration even paid consultants despite the work not being completed and in one case the consultancy company had even ceased to exist."

Mr Cowan continues: " Many residents will be asking how much more is there to come out? H&F Council therefore needs to be transparent and publish a full public account of what's gone wrong and why they tried to avoid fixing it. Then the Administration needs to publish a detailed plan of how they are going to ensure this type of waste never happens again.

" If they don't do that and we discover further problems, then the Opposition will be calling for some high profile resignations."

October 24, 2011