State paid consultants €103m for bank advice since 2011
Published 22/02/2014 | 02:30
THE State has paid €103m in consultancy fees to firms including Goldman Sachs and Arthur Cox for advice about the banks since the Coalition took office in 2011.
The Central Bank accounted for the lion's share of spending.
It paid out €75m in consultancy and legal fees over the period, according to the figures released by the Department of Finance in response to a question from Fianna Fail's Michael McGrath.
The level of fees being paid shows "an extraordinary over-dependence on consultants and a lack of expertise within the Department of Finance, the NTMA and the Central Bank," he said.
The biggest single set of costs was €29m incurred by the Central Bank in relation to the so- called "stress tests" to assess the financial position of the banks in 2011.
The data provided by the Department of Finance does not say who received fees paid by the Central Bank.
Worryingly, the main banks will go through a new round of stress tests later this year.
The Central Bank spent €1m on advice in relation to the liquidation of IBRC last year, the figures show.
The bank recoups its costs from the lenders it supervises.
"It seems to me that any time a serious decision has to be made or a new initiative undertaken, expensive external consultants seem to be the first port of call," Mr McGrath said.
"Some of the amounts paid to individual firms are truly breathtaking and you would have to ask how these fees can possibly be justified," the Fianna Fail finance spokesman said.
The National Treasury Management Agency (NTMA) has paid €22.7m to consultants for advice about the banks since the Coalition took office and recouped €8m from the banks, according to the figures.
That includes more than €9m paid to Goldman Sachs, €7.69m paid to law firm Arthur Cox and €4.4m to management consultants McKinsey.
The Department of Finance itself paid a further €4.6m in fees to firm Arthur Cox over the same period, and a second law company, Matheson, was paid just over €1m, the figures show.
The cost of legal advice accounts for the bulk of the department's €5.8m spending.
It recouped €2.4m of that from the banks, according to the official response to Mr McGrath but there is no breakdown of cash recouped from taxpayer-owned banks or private institutions.