VALUE for money from the government’s use of consultants “cannot be demonstrated consistently”, according to a watchdog – with one role costing the Island over £300,000 a year.
The Comptroller and Auditor General, Lynn Pamment, has today published a report on the government’s use of consultants.
It comes after news recently emerged that external consultants cost the taxpayer nearly £60 million during Deputy Kristina Moore’s time as Chief Minister.
The publication of these figures was delayed by over a year, and the CAG found that “the reporting of consultant and contingent labour spend to the States Assembly has fallen behind”.
“The most recent report, published in February 2024, was for the period July to December 2022, with the previous report for January to June 2022 published in February 2023,” the report stated.
Ms Pamment also found that the most recent report “shows a significant increase in consultancy expenditure on non-major projects compared with previous periods”.
Five years have passed since the government agreed to publish a report every six months on the cost of the consultants, fixed-term employees and agency staff it employed.
However, the CAG found that “the monitoring of expenditure on consultants and contingent labour is not undertaken in a consistent manner across government”.
“I have not seen strong evidence of this expenditure being reported on a regular basis at departmental level, and there is no corporate monitoring of the expenditure across government at a senior level on a consistent basis,” she said.
The CAG also raised concerns about the number of consultant arrangements that were not procured through a tender process, but through procurement exemptions.
“The rates that are being paid for such roles far exceed the cost of employing substantive project managers,” the report said.
One such role that the CAG reviewed has cost the government over £300,000 annually, including expenses.
When roles are not procured through a tender process, they are deemed a procurement exemption or breach.
A procurement exemption is the formal process for requesting a deviation from the standard sourcing route which is usually sought in exceptional circumstances.
A breach occurs when expenditure has already been committed to but no exemption has been approved.
The CAG found that – across all procurements, not just the procurement of consultants – the total value of all procurement breaches and exemptions from 1 January 2020 to 31 July 2023 totalled over £881 million.
“The average number of breaches and exemptions each month is around 30, but in the late months of 2022 and early months of 2023 this rose to more than 60 in most months,” the report said.
Ms Pamment found some “significant individual sums” included in the breaches and exemptions report.
“I have identified instances where procurement exemptions have been approved for the use of consultants and contingent labour with what I consider to be insufficient evidence to support an exemption,” she added.
Ms Pamment also identified examples where consultants had been commissioned internally and then had their contracts extended by review or “consideration as to whether alternative methods of delivery would drive greater value for money”.
“As a result of poor contract management, some consultants have been with the government for significant amounts of time, and at a cost far in excess of the recruitment and payment of a member of staff to undertake the work,” she found. “Some contracts have simply ‘rolled forward’ with little evidence of challenge and scrutiny and little evidence of value for money being delivered.”
It also emerged that “some of the contractors being used by government are ex-employees paid at higher rates than when they were employees”.
Ms Pamment explained: “Some consultants ‘move’ to areas of need across different projects rather than the contract being terminated at the end of a project and a new contract procured for the new project, as is required by the Public Finances Manual.”
The CAG also found that the quality of record-keeping for some consultancy projects “was in need of improvement”.
“In some departments, officers took a long time to produce the information I requested and when it was produced it was not always complete,” she said.
“Poor record-keeping is evidence of poor accountability and the absence of contract documents can cause serious problems in the event of a dispute with the contractor.”
Announcing the publication of the report, Ms Pamment said: “…Where consultants are used, there is a need to ensure robust processes are in place to drive value for money.
“My review has identified that such processes are not in place on a consistent basis across the States of Jersey.
“As a consequence, value for money from the use of consultants cannot be demonstrated consistently.”
She added: “The States of Jersey should build on earlier progress by implementing the recommendations in this report to secure better value for money from their use of consultants.”
Responding to the report, Chief Minister Lyndon Farnham said: “We welcome this follow-up review from the CAG and note the findings and recommendations.
“Reducing the cost of consultants is a high priority for this government.
“There will always be certain skills we do not have on island. However, where it is necessary to use consultants there is a need for a more robust process to be in place to deliver savings and ensure value for money.”
