August Bank Holiday Monday is no a day for news, as this morning's emails are confirming. But then I noticed that this headline had slipped into the FT:
KPMG wins £223mn UK government contract amid plans to cut consultant spend
What are those at the firm at which I worked from 1979 to 1983 up to now, I thought? The FT explained:
KPMG has won a UK government contract worth up to £223mn to train civil servants, the second-largest public sector contract ever awarded to the Big Four firm, before the Treasury set out plans to drastically reduce Whitehall's reliance on external consultants last month.
In fairness, they note in the article that the contract was agreed by the last government and not this one. But as they note:
[T]he consulting firm will manage learning and development services across Whitehall, including overseeing courses on policymaking, communications and career development.
Let's be clear about this. In 2021, this firm was banned from bidding for government contracts because it had been involved in so many scandals. No firm has paid more in fines for its inability to undertake its core activity, which is auditing. Unsurprisingly, the private sector has noted that KPMG is a firm in decline as a result, compared to its competitors.
And lest anyone forget, this firm still runs a massive network of tax haven operations whose primary purposes are to undermine the legitimate tax revenues of governments like that of the UK and to simultaneously undermine the regulations that they create.
Dedicated to the private sector, they promote the core profit-motivated philosophy of the neoliberal agenda, which inevitably brings with it the 'market good/state bad' thinking so associated with right-wing politicians, think tanks and consulting firms.
And these are the people who are now going to teach our civil servants. Let me guess the curriculum content:
- If in doubt, ask a consultant
- If the answer isn't to privatise or outsource, start again
- Always make sure wealth trickles upwards
- The only people who matter are wealthy because only they can pay the fees
- If you want to get on, leave public service, put yourself first, and join a consultancy
Variations on this theme will, no doubt, be available, but what else are they going to say?
And so large is this contract that it will form eight per cent of KPMG's UK revenues.
I reiterate: this is a Tory contract. But if I were Labour, I would be looking for a break clause. This is dangerous to the well-being of this country and a sure indication of the destruction of the capacity to think independently within the civil service. It is important to do better than this in the future: a strong and independent civil service is vital, and that is the last thing KPMG is going to create.
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This was the other bit of news today that caught my eye and made me think of you
https://www.theguardian.com/money/article/2024/aug/26/uk-has-record-991000-self-employed-workers-aged-60-or-over
I am one of them….
Concur Richard several senior positions have been put in place by labour in the Civil Service
Discraceful this obviously will help Freeport’s and SEZ
Unfortunately I’m unable to access the pay walled article. Is this the recent 1 year extension of existing 4 year training contract? Or a new contract? This particular outsourcing practice seems deeply embedded.
‘The total value of KPMG’s contract has risen from £158m to £237m and EY’s from £130m to £195m. These are framework contracts and as such there is no spending commitment – departments may dip into this fund as and when required’.
https://www.civilserviceworld.com/professions/article/civil-service-learning-ey-kpmg-contracts-extended-150m-high-demand
KPMG “Klynveld Peat Marwick Goerdeler” (after the founders) is a multinational that operates worldwide, headquartered in London, a network of firms in 145 countries with 273,424 employees. They seem to have a number of controversies associated with them. See https://en.wikipedia.org/wiki/KPMG#Controversies
KPMG and founders? KPMG gobbled up smaller, venerable accounting firms to establish effectively four international firms as the only audit option for major corporates. But they were also allowed to offer a wide range of profitable services, and not just provide the critical audit service.
This seems to me a very problematic and unsatisfactory system; but nobody cares.
It seems KPMG is not alone.
“The FCA has fined PricewaterhouseCoopers LLP (PwC) for failing to report to the regulator their belief that London Capital & Finance plc (LCF) might be involved in fraudulent activity. This is the first time the FCA has fined an audit firm.” (Financial Conduct Authority, 16th August, 2024).
What on earth……………..?!
Let’s face it the Neoliberal agenda was code for how much corruption can we get away with! We saw it revealed with the last government now it’s happening again with its Single Transferable Party replacement. Is this the reality of the human condition to always have some individuals who’ll treat others as objects to be exploited? If so is there any point to us? Or is some kind of experiment going on to see whether we can transcend this defective side of human nature?
https://en.wikipedia.org/wiki/Mark_Thatcher
The FCA fine is £15m. For an audit firm! What does the CA institutes have to say about all this?
Nothing
I’ve had a look at the ICAS site today to see what, if anything, it has to say about the KPMG and PwC cases. Predictably not a sausage. I’ll check it daily for a bit to see whether they actually get round to acknowledging that there might be a problem looming for the accounting profession, but I won’t be holding my breath.
I would expect nothing, Ken.
I picked my jaw up from the floor… and then reminded myself that there is – still – a Civil Service Code.
https://www.gov.uk/government/publications/civil-service-code/the-civil-service-code
Commercial interests won’t work if the CS is to maintain its integrity.
Do I expect the CS to be able to maintain its professionalism? How will we know with KPMG running the department? And the question will always hover like a bad smell: “Who trained that MP’s advisor?”
The real screamer for me is “policy-making”, and its callback to your piece on prevarication. Align the action implied there with that oh-so-meaningful word: *Service*. It just doesn’t fit.
The Civil Service, of which I am proud to have been a very lowly member, should simply **advise** Ministers. The MPs are those who were *elected* to do the policy-making.
In a paraphrase of the concern of Tony Benn, we know how to get rid of an MP. How do we get rid of an anonymous Civil Servant?
My experience has been that whenever someone is promoted to a CEO or equivalent position they quickly employ consultants to review and comment upon the system they have taken charge of. The accumulated knowledge of the subordinate staff is then extracted by the consultants and fed back to the commissioning executive with a report telling him/her how to do more with less. There is never any subsequent reports on the success or failure of consultancy advice.
In the process the confidence of the indigenous staff is mainly destroyed but, of course, there are always those who see which way the wind is blowing and go with it.
Nowadays the cumulative knowledge of an organisation is not used to form internal consultancy teams (used to be called Work Study), probably because this would impede the career path of thrusting, envy free, neoliberals.
Credit where credit is due. The Tories found a brilliant way to circumvent the “no Government can bind a future Government” convention of Westminster politics. It’s terrifyingly effective and over time it could seriously undermine the ethos and impartiality of the Civil Service.
Sadly, I don’t think Starmer’s crew will even see it as a problem.
Consultants!
I see lots of those in the public sector where I work who are on really good money, but are preferred because there are no NI or pension contributions to be made by a local authority who cannot recruit because of budget and therefore wage restrictions caused by central government budget cuts.
I have seen up to three different people deal with the same issue in my line of work.
I can’t think what KPMG are going to teach these people? What – how to cope with a large workload? Cut corners? Are they going to be just training managers to be more demanding and less flexible to get more out of less?
This sounds to me like typically thick politicians with no domain knowledge not realising that their own austerity measures (and more) have decimated the delivery of public services. It’s as simple as that.
Or do they know what are doing like they know what they are doing in the NHS and now helping to create ‘new markets’ for the like of KPMG?
Core business supposed to be auditing, provision of assurance regarding the truth and fairness of published accounts, Will the training include imparting to senior civil servants a basic grounding in double-entry accounting which they so signally lack? Thought not.
It’s akin to having major accounting firms consulted heavily in formulating and writing a countries taxing arrangements. (Name any western country for an example) Its having a rapacious fox consult in designing henhouse security to minimise hen and egg loss to maximise service efficiency. To the fox benefit of course.
We pay politicians to arrange for senior executives to formulate arrangements to benefit services to the people as a whole. Not delegate, contract out or avoid responsibility.
We should not be paying for politicians or senior govt execs to just delegate those arrangements to a costly private company to arrange profit for themselves. A decent politician or exec would be arranging their own very close scrutiny consultation processes, from needs to desired and or acceptable end results to the broader public without a profit motive or future political funding as the end result.
Private consulting and poorly designed or poorly scrutinised private contract delivery options always have a high profit motive designed for the company owner(s), never the public who ultimately pay for it.