Labour quadruples use of consultants in run-up to UK election
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Labour has quadrupled its use of consultants as it prepares for a general election, despite shadow chancellor Rachel Reeves vowing to cut their deployment in the civil service if her party takes power.
The opposition party received £287,000 in donations of staff time from consultancy firms in the year to September 2023, up from £72,000 in the prior 12 months, according to Electoral Commission data.
Labour under Sir Keir Starmer has been critical of the Conservative government’s increasing use of expensive consultants in the civil service.
At Labour’s annual conference in October Reeves vowed to introduce “tough new rules” to “slash government consultancy spending” in half if the party comes to power in the election expected this year.
Government expenditure on consultants in core departments, including the Home Office and Ministry of Defence, rose 130 per cent to £723mn between 2018-19 and 2021-22, the Financial Times previously reported.
Richard Murphy, a left-wing campaigner and professor of accounting practice at Sheffield university, said Labour’s use of consultants was “fairly naive” as it undermined their message about limiting the outsourcing of expertise to corporate advisers.
Murphy said the practice of offering staff time for free gave consultancies an opportunity to gain “influence, access, phone numbers and a competitive advantage”.
He added that Labour could find it harder to wean government off hiring external expertise if it built a dependence on consultants in opposition.
Both Labour and the Conservatives have previously relied on consultants, primarily when in opposition, and ramped up their use in the run-up to general elections as they prepare policy pledges.
Labour under Ed Miliband received a total of £767,000 worth of donated staff time from PwC, Deloitte and KPMG in 2014, the highest figure for Labour since 2001.
Under Jeremy Corbyn, Labour stopped the practice and no donations from consultants were recorded between 2016 and 2020.
The Tories in 2009, when they were in opposition, accepted nearly £600,000 in staff time from groups including EY, PwC and KPMG. The party last accepted significant donations of consultant staff time in 2010.
Dame Meg Hillier, Labour chair of the House of Commons public accounts committee, said it was “completely right” that opposition parties preparing for government would use external consultants with “the right skills and expertise at their fingertips”.
“One thing that the Big Four do have is expertise in crunching numbers. It doesn’t mean they are carrying out a sales pitch to the party at the same time,” Hillier added.
The biggest contribution of staff hours Labour received in the 12 months to September 2023 was about £138,000 from EY UK.
Labour also received just over £93,000 from the UK arm of PwC. The firm’s Australian division has been embroiled in a scandal about partners leaking information from government advisory work to private clients.
Labour said the party would “treat every pound of taxpayer money with the respect it deserves”.
“Consultants play an important role in the delivery of public services, and Labour’s plan will mean that government departments must demonstrate the value-for-money case. If they cannot, that request will be denied,” it added.
EY declined to comment. PwC said that requests for consultancy staff tend to come from opposition parties that do not have access to the same resources as the government and their expertise can help parties to better understand the business environment.
The company considers “requests for secondees from the main political parties on a case-by-case basis”, they added. “We have no political affiliation and don’t develop policy on their behalf.”