Sunday 23 November 2014

Revealed: the €165m splurged on 'experts'

Consultants rake in fortune from just seven departments and 14 quangos

SHANE PHELAN Public Affairs Editor EXCLUSIVE

Published 09/03/2014 | 02:30

Fianna Fail Senator Marc MacSharry at Leinster House. Picture: Tom Burke
Fianna Fail Senator Marc MacSharry at Leinster House. Picture: Tom Burke

THE Government has splashed out a minimum of €165m in fees to consultants and a range of "external service providers" since it came to power, the Sunday Independent can reveal.

But the massive payout over the past three years is just the tip of the iceberg as it relates to only seven of the 16 government departments and 14 of the estimated 800 State bodies or quangos.

Analysis of official figures shows that the creaming off of huge government consultancy fees goes much further than the Irish Water controversy.

The departments and agencies which spent most on consultants include the Department of Foreign Affairs (€50.7m), Revenue Commissioners (up to €27.9m), the Sustainable Energy Authority of Ireland (€27.3m) and the Department of Social Protection (€20.6m).

This lavish spending is over and above the €86m being spent on consultants by Irish Water and the €32m which has already gone to consultants working on the ill-fated Poolbeg incinerator project – on which not a single brick has yet been laid.

Today's revelations show how reliant government agencies have become on external experts and service providers. It also suggests that there is a huge skills deficit in the civil and public services, particularly in relation to IT, energy and banking sector expertise.

The figures published are the most up to date collated by government departments – but the €165m sum is expected to be dwarfed when the spending figures of the remaining departments, including Health, Education, the HSE and other agencies, are released.

Sums revealed in the data seen by the Sunday Independent include:

* Payments of €6m to law firm Arthur Cox for advice to the Department of Finance on the banking crisis.

* Huge consultancy contracts, totalling €27m, entered into by the Sustainable Energy Authority, a body chaired by former Labour general secretary Brendan Halligan, including a €400,000 PR contract with Drury Communications.

* €19.4m spent on IT consultants by the Department of Social Protection.

* €7.2m paid to business consulting giant Bearing Point to provide technical support for the maintenance of the automated passport system.

* Over €4.3m spent moving the belongings of Irish diplomats around the world.

* Over €1.4m spent hiring cleaners at the Department of Foreign Affairs.

* Almost €1m for private catering during Ireland's presidency of the Council of the European Union last year.

* Large sums spent on chauffeur services, executive airport lounge hire and travel agency costs by the Department of Foreign Affairs.

The information was released to Fianna Fail senator Marc MacSharry, who has tabled questions to dozens of government bodies about their spending on external experts and service providers since the Coalition came to power.

Mr MacSharry has questioned whether the civil and public service no longer has any expertise of its own.

"The overall picture here is over €160m spent on consultants while frontline services are being cut," he said. "Is there no expertise left in the public service?

"For example, are there no press officers in SEAI? Why is a €400,000 contract necessary? And if you look at the Department of Social Protection, they are, from a State perspective, pioneering in terms of IT over the years. Do we really need to spend almost €20m getting consultants in?"

The SEAI said it was "absolutely satisfied" that all of its external consultancy spending was providing value for money. It said the PR contract involved "many communications activities".

The Department of Social Protection said it needed the outside expertise as it was constantly modernising its IT systems.

"We are dealing with 85 million individual payments annually and have a track record of delivering those payments on time. Obviously, our IT infrastructure plays a huge part in that," said a spokesman.

A spokesman for the Department of Public Expenditure insisted that consultancy spending was "closely monitored" by its officials and any issues of concern which may arise are taken up with the particular department or agency involved.

"We have staff who consult on a regular basis with their colleagues in the line departments, so all areas of spending have to be discussed and cleared," the spokesman said.

However, the department said that while consultancy spending had been slashed in 2008 following the crash, no overall review of this area had been done in recent years.

Public Accounts Committee chairman John McGuinness said an urgent review was now necessary.

He added: "There are consultants almost permanently employed in the system. It has gotten to a stage that a county council will spend €100,000 on a consultant before they even start a job."

He also questioned the procurement system, saying there were examples of consultants who had provided bad advice during the boom but were still being paid to provide advice.

The Department of Finance has recouped some of the legal fees from the seven banks covered by the State's guarantee scheme. Last year, seven banks covered by the guarantee scheme repaid €5.35m towards the State's legal and administrative costs.

Sunday Independent

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