Posted on 13-09-2010 at 01:00
Tender Writers
Out to Tender
Jobs for the boys is nothing new and happens across the whole of the public sector. For example staff in the NHS often retire and come back as consultants. Its a waste of money and it is our money. At a time when we are all being told to tighten our belts this really is a slap in the face.
Public bodies have spent millions of pounds handing contracts to consultancy firms run by their former employees, a Sunday Herald investigation can reveal.
Some of the companies or individuals received the cash without the work being tendered.
The deals have been slammed as evidence of a revolving-door culture by one MSP.
The Scottish Government and its network of agencies spend more than £100million a year on expert advice from consultants. The 1200 consultancies that received work in 2007 provided extra help on IT, human resources, management, finance, engineering and the law.
This is in spite of the same public bodies being staffed by thousands of employees who, critics argue, could perform many of the outsourced tasks.
A report by watchdog Audit Scotland found that the Government did not have a “clear strategy” for using consultants, adding: “There is a lack of information on what consultancy skills, knowledge and services are bought and why consultants are used.”
This newspaper can reveal that quangos, agencies, councils and police bodies have awarded work to firms run by their former managers and executives, effectively ‘rehiring’ senior staff who have left.
Scottish Enterprise, which until recently had a budget of £550m, has handed large chunks of work to the firm’s of one-time employees.
In 1995, John Kelly left a management post at Scottish Enterprise and joined consultancy EKOS Ltd, of which he is a director. According to documents released under freedom of information by SE, the quango and its now defunct local enterprise companies have awarded EKOS more than £6m since 2001.
This included £34,000 for “European project research”, £31,000 for “creative industries studies”, £22,000 for “economic intelligence” and £18,000 for “research and development”.
According to the EKOS website, two directors, one associate director and three staff all used to work for the jobs quango.
But Kelly told this newspaper that he disputed the £6m figure, as he believed another firm called EKOS may have carried out some of the work attributed to his firm. He said: “There are jobs in this [list] we do not recognise, and also in many cases the fees were split across many consultants where we were in the lead, so do not reflect actual fees to EKOS.”
In response, a spokeswoman for Scottish Enterprise said she stood by the £6m figure, except for £20,000 of work that was awarded to a firm with a similar name.
A report by EKOS Ltd on the Homecoming celebration was criticised last week for using economic modelling that was “out-of-date and incorrect”.
Since 2001, Scottish Enterprise has awarded at least £31,295 to a Blue Toucan. The firm was set up in 2000 by Alison McRae, who spent 10 years with Highlands and Islands Enterprise (HIE) and Scottish Enterprise. Her company was paid £8,474 for “communication and content”, £6,664 for “genealogy development”, and £7,440 for “strategy development cluster”.
Another consultancy to receive cash from Scottish Enterprise was O’Herlihy and Co Ltd, set up in 1998 by former SE senior project manager Donal O’Herlihy. According to SE figures, this organisation was given at least £62,438 from 2001 to 2006, including £8,075 for “business model innovation”, £8,482 for “talent match evaluation” and £10,716 for “local economic forum support”.
Yellow Book Ltd, launched in 2001 by John Lord, has received around £90,000 for various projects by SE and its LECs.
This includes £28,376 for a Clyde Waterfront initiative, £7,050 for a “digital champions” project and £15,577 for “strategy and research”. Lord was SE’s “strategy director” from 1991 to 1997.
In the last three years alone, SE says it has given £21,271 to the Cogent Strategies International consultancy, founded by Professor Hervey Gibson in 1993. Gibson was previously head of economics for Scottish Enterprise.
A spokesperson for Scottish Enterprise said: “On reviewing your list, this seems to relate to individuals who may have worked for Scottish Enterprise nearly 20 years ago and it is unreasonable to expect us to be able to comment.
“We have clear policies against rehiring former employees who have received severance and we also have robust procurement practices in place to ensure best value for the public purse.”
HIE, another part of the country’s enterprise network, has also paid out consultancy cash to firms run by former employees. In 2004, Tom Matthew left HIE as its Transport Policy Manager and became a director of Reference Economic Consulting. Since 2005, the company has received £724,292 in work from the quango and its local arms.
HIE has shelled out £501,701 to “Steve Westbrook Economist” for expert advice since 2000. Westbrook used to work as an economist with the Highlands and Islands Development Board, which became HIE in 1991.
An HIE spokesman said: “We comply with all relevant procurement legislation and follow best practice. The key issues are whether an external supplier has the skills and experience we require, can achieve best value and deliver on time.”
The Scottish Parliament, which employs more than 400 staff, has also “rehired” a staff member who had left the payroll.
In 2010, Holyrood paid consultant Sue Morris £11,175 to judge whether the Parliament’s research service was fit for purpose. Morris was Holyrood’s joint head of research in the early days of the institution.
A Parliament spokesperson said three quotes were sought before Morris secured the contract: “The work carried out by Sue Morris could have been done by internal staff. However, the research review project board decided to appoint an experienced external consultant to assist with aspects of the review.”
From 2008 to 2010, the Scottish Housing Regulator watchdog paid Kirsten Griew around £18,500 for website-related consultancy and for validating statistics from landlords. A SHR spokesperson said Griew used to be a team administrator when SHR was part of Communities Scotland.
The police service has also left itself open to criticism on staff rehires. In 2006, Dan Hewitt retired as the corporate communications manager for Lothian and Borders police.
He then landed a consultancy role as a “media relations advisor” for the same force, which he no longer works for. A spokesman for L&B confirmed the arrangement.
Since 2007, the Scottish Police Services Authority (SPSA) has “re-engaged” four former employees as consultants. The SPSA is withholding the names of the individuals for “personal data” reasons, but one consultant pocketed £25,133 while another received £9,433.
A spokeswoman said: “Three individuals who were former employees of SPSA have been contracted to provide various elements of specialist police training at the Scottish Police College. In one further case a former employee with senior HR experience was contracted by SPSA on a part-time basis.”
Aberdeen University is also not averse to the ‘revolving-door’ practice. Up until April, Sir Duncan Rice earned nearly £300,000 a year as principal of the institution. He retired, and was appointed to a consultancy “fundraising” role worth £2,000 a day, or £5,000 a month.
A university spokeswoman said the consultancy was not put out to tender.
At a local authority level, Clackmannanshire Council has given around £14,500 since 2007 to the Tapestry Partnership. Keir Bloomer, who stood down as the council’s chief executive in 2007, is listed as the organisation’s chair.
A spokeswoman for the council said: “We paid for teacher training through the Tapestry Partnership. This included attendance at conferences with world-class speakers on topics such as child development, innovation in learning and teaching, assessment and curriculum for excellence.”
Between 2007 and 2009, West Lothian Council paid around £36,000 to a consultant who used to be employed by the local authority, work which was not tendered.
A spokesman for the local authority said: “One former employee was taken on as a specialist consultant, as updates required a person who had very specific experience and technical knowledge of systems within our Housing and Building Service.”
Similarly, the Scottish Environment Protection Agency commissioned a firm run by ex-SEPA manager Evan Williams to do £12,885 of consultancy work last year. One of the contracts was tendered to at least two companies, while the second piece of work was designated “single-action tender”, which does not require a competitive process.
A spokeswoman said: “SEPA uses consultancies to carry out a variety of work on our behalf. Our procurement processes are followed and selection decisions are based on the best value for money and expertise for our requirements. Companies are selected on that basis whether former staff members are involved or not.”
Sportscotland has estimated that it will pay £46,000 to a former staffer this year for external advice on a new structure for the organisation.
On whether the job was tendered, the spokesman said: “Due to the organisation’s urgent business needs at the time to appoint a consultant for this role and in order to avoid delaying this appointment any further, a decision was made not to put the work out to tender.”
Scottish Natural Heritage, the body set up to protect the landscape, has also confirmed it rehired a former staffer as a consultant.
A spokesman said: “It was to help complete a project on a specialist subject, following the death of the person originally leading it.”
Although there is no evidence of wrong-doing of the part of the consultants, MSPs believe the practice raises questions for the public bodies who hire ex members of staff.
Hugh Henry, a Labour MSP and convener of the Public Audit Committee, said: “It is a scandal that scarce public resources are being used in this way, as it looks to me like an ‘old pals’ act. I want Scottish Ministers to investigate these contracts and I will also be writing to Audit Scotland to examine whether these practices represent value for money.”
Jeremy Purvis, the LibDem finance spokesman, said: “This sounds like a revolving-door culture that cannot continue. It also appears to come at a very high cost to the public.”
Margaret Mitchell, a Tory MSP in Central Scotland, said: “Organisations should have the in-house staff whose expertise would mean that consultants would not need to be hired. But if consultants are hired, as a last resort, value for money is paramount. It is not acceptable to hand out these sorts of contracts without a tender.”
A spokesperson for Finance Secretary John Swinney said: “John is absolutely committed to further tightening this up. In April, he introduced a new system which introduced a cap on total staff numbers in post – which applies to all staff, including recruitment agency workers, secondees and consultants.
“In terms of Scottish Government staff, no-one can be brought into the organisation unless there is strong evidence that we do not have the skills internally and there is a reduction in numbers elsewhere – and contracts for a consultancy of up to £50,000 in value must be approved at director general level.”
Quango sets aside £200,000 ... to learn how to save money
A gaffe-prone quango has earmarked £200,000 of taxpayers’ money – to learn how to become more efficient. Skills Development Scotland (SDS) is to set aside the cash so PA Consulting can help it “streamline”.
SDS was set up in 2008 to deliver careers, skills and training services. It has a budget of about £180 million and employs nearly 1500 staff. However, in March, it paid hypnotist Paul McKenna £20,000 to give a pep talk to jobless youths. It then planned to spend up to £2m to change its name to Scotland The Works, an idea blasted by Labour’s Holyrood leader Iain Gray. SDS then spent more than £100,000 on an away day during which staff wrote ideas on tablecloths.
PA Consulting describes itself as a “leading management, systems and technology consulting firm” and is being paid to “explore” options for improving efficiency. Its appointment was made by another SDS contractor, Atos Origin, which the quango describes as our “technology and transformation partner”.
David Whitton, Labour’s shadow finance spokesman, said: “An agency for skills should have enough expertise in its own ranks to deal with efficiencies.”
John Wilson, SNP MSP for Central Scotland, said: “It is remarkable that the newly established SDS finds it necessary to spend £200,000 to pull together a strategy for the future. Maybe they should consider stepping aside to enable a team to drive the organisation forward.”
Asked why SDS staff could not have carried out an internal efficiency review, an spokeswoman said: “SDS has achieved significant productivity gains and efficiency savings. To sustain this level, while continuing to meet stretching government targets, the board of SDS has approved the limited use of external consultants to work alongside SDS staff.”
Public bodies have spent millions of pounds handing contracts to consultancy firms run by their former employees, a Sunday Herald investigation can reveal.
Some of the companies or individuals received the cash without the work being tendered.
The deals have been slammed as evidence of a revolving-door culture by one MSP.
The Scottish Government and its network of agencies spend more than £100million a year on expert advice from consultants. The 1200 consultancies that received work in 2007 provided extra help on IT, human resources, management, finance, engineering and the law.
This is in spite of the same public bodies being staffed by thousands of employees who, critics argue, could perform many of the outsourced tasks.
A report by watchdog Audit Scotland found that the Government did not have a “clear strategy” for using consultants, adding: “There is a lack of information on what consultancy skills, knowledge and services are bought and why consultants are used.”
This newspaper can reveal that quangos, agencies, councils and police bodies have awarded work to firms run by their former managers and executives, effectively ‘rehiring’ senior staff who have left.
Scottish Enterprise, which until recently had a budget of £550m, has handed large chunks of work to the firm’s of one-time employees.
In 1995, John Kelly left a management post at Scottish Enterprise and joined consultancy EKOS Ltd, of which he is a director. According to documents released under freedom of information by SE, the quango and its now defunct local enterprise companies have awarded EKOS more than £6m since 2001.
This included £34,000 for “European project research”, £31,000 for “creative industries studies”, £22,000 for “economic intelligence” and £18,000 for “research and development”.
According to the EKOS website, two directors, one associate director and three staff all used to work for the jobs quango.
But Kelly told this newspaper that he disputed the £6m figure, as he believed another firm called EKOS may have carried out some of the work attributed to his firm. He said: “There are jobs in this [list] we do not recognise, and also in many cases the fees were split across many consultants where we were in the lead, so do not reflect actual fees to EKOS.”
In response, a spokeswoman for Scottish Enterprise said she stood by the £6m figure, except for £20,000 of work that was awarded to a firm with a similar name.
A report by EKOS Ltd on the Homecoming celebration was criticised last week for using economic modelling that was “out-of-date and incorrect”.
Since 2001, Scottish Enterprise has awarded at least £31,295 to a Blue Toucan. The firm was set up in 2000 by Alison McRae, who spent 10 years with Highlands and Islands Enterprise (HIE) and Scottish Enterprise. Her company was paid £8,474 for “communication and content”, £6,664 for “genealogy development”, and £7,440 for “strategy development cluster”.
Another consultancy to receive cash from Scottish Enterprise was O’Herlihy and Co Ltd, set up in 1998 by former SE senior project manager Donal O’Herlihy. According to SE figures, this organisation was given at least £62,438 from 2001 to 2006, including £8,075 for “business model innovation”, £8,482 for “talent match evaluation” and £10,716 for “local economic forum support”.
Yellow Book Ltd, launched in 2001 by John Lord, has received around £90,000 for various projects by SE and its LECs.
This includes £28,376 for a Clyde Waterfront initiative, £7,050 for a “digital champions” project and £15,577 for “strategy and research”. Lord was SE’s “strategy director” from 1991 to 1997.
In the last three years alone, SE says it has given £21,271 to the Cogent Strategies International consultancy, founded by Professor Hervey Gibson in 1993. Gibson was previously head of economics for Scottish Enterprise.
A spokesperson for Scottish Enterprise said: “On reviewing your list, this seems to relate to individuals who may have worked for Scottish Enterprise nearly 20 years ago and it is unreasonable to expect us to be able to comment.
“We have clear policies against rehiring former employees who have received severance and we also have robust procurement practices in place to ensure best value for the public purse.”
HIE, another part of the country’s enterprise network, has also paid out consultancy cash to firms run by former employees. In 2004, Tom Matthew left HIE as its Transport Policy Manager and became a director of Reference Economic Consulting. Since 2005, the company has received £724,292 in work from the quango and its local arms.
HIE has shelled out £501,701 to “Steve Westbrook Economist” for expert advice since 2000. Westbrook used to work as an economist with the Highlands and Islands Development Board, which became HIE in 1991.
An HIE spokesman said: “We comply with all relevant procurement legislation and follow best practice. The key issues are whether an external supplier has the skills and experience we require, can achieve best value and deliver on time.”
The Scottish Parliament, which employs more than 400 staff, has also “rehired” a staff member who had left the payroll.
In 2010, Holyrood paid consultant Sue Morris £11,175 to judge whether the Parliament’s research service was fit for purpose. Morris was Holyrood’s joint head of research in the early days of the institution.
A Parliament spokesperson said three quotes were sought before Morris secured the contract: “The work carried out by Sue Morris could have been done by internal staff. However, the research review project board decided to appoint an experienced external consultant to assist with aspects of the review.”
From 2008 to 2010, the Scottish Housing Regulator watchdog paid Kirsten Griew around £18,500 for website-related consultancy and for validating statistics from landlords. A SHR spokesperson said Griew used to be a team administrator when SHR was part of Communities Scotland.
The police service has also left itself open to criticism on staff rehires. In 2006, Dan Hewitt retired as the corporate communications manager for Lothian and Borders police.
He then landed a consultancy role as a “media relations advisor” for the same force, which he no longer works for. A spokesman for L&B confirmed the arrangement.
Since 2007, the Scottish Police Services Authority (SPSA) has “re-engaged” four former employees as consultants. The SPSA is withholding the names of the individuals for “personal data” reasons, but one consultant pocketed £25,133 while another received £9,433.
A spokeswoman said: “Three individuals who were former employees of SPSA have been contracted to provide various elements of specialist police training at the Scottish Police College. In one further case a former employee with senior HR experience was contracted by SPSA on a part-time basis.”
Aberdeen University is also not averse to the ‘revolving-door’ practice. Up until April, Sir Duncan Rice earned nearly £300,000 a year as principal of the institution. He retired, and was appointed to a consultancy “fundraising” role worth £2,000 a day, or £5,000 a month.
A university spokeswoman said the consultancy was not put out to tender.
At a local authority level, Clackmannanshire Council has given around £14,500 since 2007 to the Tapestry Partnership. Keir Bloomer, who stood down as the council’s chief executive in 2007, is listed as the organisation’s chair.
A spokeswoman for the council said: “We paid for teacher training through the Tapestry Partnership. This included attendance at conferences with world-class speakers on topics such as child development, innovation in learning and teaching, assessment and curriculum for excellence.”
Between 2007 and 2009, West Lothian Council paid around £36,000 to a consultant who used to be employed by the local authority, work which was not tendered.
A spokesman for the local authority said: “One former employee was taken on as a specialist consultant, as updates required a person who had very specific experience and technical knowledge of systems within our Housing and Building Service.”
Similarly, the Scottish Environment Protection Agency commissioned a firm run by ex-SEPA manager Evan Williams to do £12,885 of consultancy work last year. One of the contracts was tendered to at least two companies, while the second piece of work was designated “single-action tender”, which does not require a competitive process.
A spokeswoman said: “SEPA uses consultancies to carry out a variety of work on our behalf. Our procurement processes are followed and selection decisions are based on the best value for money and expertise for our requirements. Companies are selected on that basis whether former staff members are involved or not.”
Sportscotland has estimated that it will pay £46,000 to a former staffer this year for external advice on a new structure for the organisation.
On whether the job was tendered, the spokesman said: “Due to the organisation’s urgent business needs at the time to appoint a consultant for this role and in order to avoid delaying this appointment any further, a decision was made not to put the work out to tender.”
Scottish Natural Heritage, the body set up to protect the landscape, has also confirmed it rehired a former staffer as a consultant.
A spokesman said: “It was to help complete a project on a specialist subject, following the death of the person originally leading it.”
Although there is no evidence of wrong-doing of the part of the consultants, MSPs believe the practice raises questions for the public bodies who hire ex members of staff.
Hugh Henry, a Labour MSP and convener of the Public Audit Committee, said: “It is a scandal that scarce public resources are being used in this way, as it looks to me like an ‘old pals’ act. I want Scottish Ministers to investigate these contracts and I will also be writing to Audit Scotland to examine whether these practices represent value for money.”
Jeremy Purvis, the LibDem finance spokesman, said: “This sounds like a revolving-door culture that cannot continue. It also appears to come at a very high cost to the public.”
Margaret Mitchell, a Tory MSP in Central Scotland, said: “Organisations should have the in-house staff whose expertise would mean that consultants would not need to be hired. But if consultants are hired, as a last resort, value for money is paramount. It is not acceptable to hand out these sorts of contracts without a tender.”
A spokesperson for Finance Secretary John Swinney said: “John is absolutely committed to further tightening this up. In April, he introduced a new system which introduced a cap on total staff numbers in post – which applies to all staff, including recruitment agency workers, secondees and consultants.
“In terms of Scottish Government staff, no-one can be brought into the organisation unless there is strong evidence that we do not have the skills internally and there is a reduction in numbers elsewhere – and contracts for a consultancy of up to £50,000 in value must be approved at director general level.”
Quango sets aside £200,000 ... to learn how to save money
A gaffe-prone quango has earmarked £200,000 of taxpayers’ money – to learn how to become more efficient. Skills Development Scotland (SDS) is to set aside the cash so PA Consulting can help it “streamline”.
SDS was set up in 2008 to deliver careers, skills and training services. It has a budget of about £180 million and employs nearly 1500 staff. However, in March, it paid hypnotist Paul McKenna £20,000 to give a pep talk to jobless youths. It then planned to spend up to £2m to change its name to Scotland The Works, an idea blasted by Labour’s Holyrood leader Iain Gray. SDS then spent more than £100,000 on an away day during which staff wrote ideas on tablecloths.
PA Consulting describes itself as a “leading management, systems and technology consulting firm” and is being paid to “explore” options for improving efficiency. Its appointment was made by another SDS contractor, Atos Origin, which the quango describes as our “technology and transformation partner”.
David Whitton, Labour’s shadow finance spokesman, said: “An agency for skills should have enough expertise in its own ranks to deal with efficiencies.”
John Wilson, SNP MSP for Central Scotland, said: “It is remarkable that the newly established SDS finds it necessary to spend £200,000 to pull together a strategy for the future. Maybe they should consider stepping aside to enable a team to drive the organisation forward.”
Asked why SDS staff could not have carried out an internal efficiency review, an spokeswoman said: “SDS has achieved significant productivity gains and efficiency savings. To sustain this level, while continuing to meet stretching government targets, the board of SDS has approved the limited use of external consultants to work alongside SDS staff.”
