Government departments spent more than £63 million on outside consultants between 1994 and 1996, but it is hard to identify what benefits resulted from the spending, a report from the Office of the Comptroller and Auditor General says.
The value-for-money report looked at the system of engaging outside consultants, which has grown in recent years, covering areas such as management, legal advice, market research, staff training, IT and public relations.
The report says most departments were not in a position in the period examined to "know how much they spend or are committed to spending on consultancies".
The report adds that alternatives to outside consultants should be considered. It suggests training existing civil servants and "developing in-house capabilities". Andersen Consulting, which advises clients on strategic change, is the "clear leader" in terms of securing consultancy work, according to the report. In addition to its normal work, it was also commissioned for one of the largest consultancy contracts, worth over £13 million, awarded by the Department of Justice, which involved setting up the Garda Siochana's information technology project.
The Department of Justice commissioned the most consultants (see table), mainly because it lacked in-house skills in certain areas, it claims.
The report says there was little evidence that departments gave sufficient consideration in advance "to the likely cost-effectiveness of consultancy assignments".
"It was not common practice to prepare a formal business case or make an estimate of the likely cost or worth of the consultancy to the department," it adds.
In the period examined, there was little evidence that plans governing the consultancy contracts were checked to see if they corresponded with the work done. The report states that two-thirds of the consultancies examined ran late.
There were two governments in power during the period when the evaluation took place - the Fianna Fail/Labour coalition until December 1994 and the Rainbow coalition for the remainder of the period. The report says there "is no justification" for the 161 consultancies, which were not even governed by a written contract. For example one contract, worth £177,000, which the report does not detail, was agreed without any form of written contract. In another case, a department was unable to produce a copy of a contract it signed with a consultancy company.
On the methods used for selecting the consultants, the report says half the consultancies commissioned were awarded without proposals or tenders being sought from a number of candidates.
It says that more than £10 million of consultancies were awarded without the "minimum recourse to competition". All departments are meant to keep records of the evaluation done of the consultants who apply for a specific contract.
But the report finds that, in some of the cases examined, departments were unable to supply documentary evidence of any evaluation process.
The report strongly criticises the management of consultancy projects within the Civil Service. "The examination has found there is significant scope for improvement in the efficient management of consultancies," it says.
"Sound practices for managing the execution of consultancy projects were not widely evident. Plans with milestones, against which progress can be monitored, were not agreed with all consultancies; many which did have this element ran late," it says.
The report is equally critical of how departments evaluate whet her any benefit resulted from commissioning the consultancy work. It says, despite Department of Finance guidelines to the contrary, there is little evidence that formal evaluations of the consultancy work were carried out.
The report cites one case where a department, not specified, contracted a consultancy team to carry out a review of its organisation structure and prepare an implementation plan for changes needed. The cost of contracting the consultants was £52,000, but very few of the changes suggested were implemented.
The report suggests that the department was "not fully prepared to act on what was likely to be proposed". It says for departments to ignore recommendations "may cast some doubt on the original basis for the consultancy". While it would seem reasonable to expect some savings to result from the consultants' work, the reports says most departments were unable to "point to any savings achieved which could be attributed to consultants".
"Only two departments claimed that savings had been or would be achieved as a result," it states.