Announcement

Response to the Local Government Chronicle's factually inaccurate analysis of spending over £500 that the Department publishes as part of its commitment to transparency

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Local Government Chronicle has made claims that “Eric Pickles has spent millions on consultants since he took the reins in the Department…

The Local Government Chronicle has made claims that “Eric Pickles has spent millions on consultants since he took the reins in the Department for Communities and Local Government reflecting the cost of the reorganisation under way at Eland House.”

This assertion is based on a factually inaccurate analysis of the spending over £500 that the Department now publishes as part of its commitment to transparency.

A spokesperson for the Department for Communities and Local Government said:

It is completely untrue to suggest that millions have been spent on consultants since the change in administration. Several of the figures quoted are incorrect, refer to spending under the previous administration or have been incorrectly entered as consultancy. The Department is implementing a programme to reduce this year’s running costs by £50 million, as part of an overall budget reduction of £780 million for the department announced in May last year.

The Local Government Chronicle makes a series of claims based on spending items. These are taken in turn and refuted or explained below.

LGC claims:

Spending data published by DCLG for the period from May-December 2010 shows a sharp spike in spending on finance consultancy, up from just £1,678 in May-June and £839 in July-August to £704k in the in final quarter of 2010. This compares to a total spend of £868k over the whole of 2009-10.

The reality is:

The spike in spending of £704k in the last quarter of 2010 can be attributed to a payment of £700,000 made to HM Treasury, which had been incorrectly coded as Finance Consultancy.

LGC claims:

The Communities Secretary has also overseen a nearly £1m bill for Human Resource consultancy over the period May-Dec, compared to a total spend of just £110k in all of 2009-10.

The reality is:

This figure bears no relation to the published data. Entries listed as HR consultancy on the departments spending tables totals around £150k for the period May - Dec 2010.

LGC claims:

The cost of IT consultancy has also risen since May, up from £240k in May-June to £674k in July-Aug, followed by a huge bill of £2.8m in the final quarter.

The reality:

The spend in the final quarter of £2.8m can be mainly attributed to two areas. £1.5m was paid to the Tenant Services Authority in November, this was not for IT consultancy and this information has been incorrectly coded. Approximately £1m of the remaining spend can be attributed to spend with Mott MacDonald, who provide Technical support and project Management to the Firelink project and FireControl - an overbudget and now terminated programme from the last administration.

LGC claims:

Legal costs have also risen steadily since Mr Pickles entered Eland House, with a £404k bill in May-June rising to £545k in July-Aug, which rose again to £747k in Oct-Dec.

The reality:

The new Government inherited over 200 ongoing legal issues from the last administration and the legal spend compares to a comparable spend of £4.8 million in 2009-10. Hansard, 15 Dec 2010 : Column 809W
http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm101215/text/101215w0003.htm#1012163001764

LGC claims:

And despite housing minister Grant Shapps criticising the Audit Commission for spending £53k on office chairs, DCLG has spent £73k on office furniture since May, including £40k on luxury Herman Miller desks and chairs.

The reality is:

These are costs associated with the refurbishment of the Department following a rationalisation of buildings from 2 to 1 that was overseen and implemented in the period of the previous administration. These particular chairs were ordered before May with payments being made at a later date.

LGC claims:

The Department has also spent £9,198 on excess fares since May, charged against travel on trains without a valid ticket.

The reality is:

This spending entry does not relate to travelling without a valid ticket.

In other areas Mr Pickles has overseen sharp decreases in spending, including advertising and publicity, down from £563k in July-August to £72k in Oct-Dec, while the department’s mobile phone bills have fallen from £28k in May-June to just £1,159 in Oct- Dec.

These reductions in spending are part of a much wider effort right across the department to drive down costs.  To cut our in-year running costs we have:

  • implemented a recruitment freeze, reduced bonuses and used fewer agency and interim staff, delivering £3.9 million savings
  • reduced our spending on accommodation, IT and training - delivering £2.8 million savings
  • cut down the number of external conferences, as well the cost of consultants and other corporate running costs - delivering £3.7 million savings.

In addition to this we have saved £18 million from the Department’s central programme budgets - by bearing down on marketing and research budgets - and our QUANGOs are delivering savings of £23 million.

So, taken together what the figures actually show is that the claim:

Eric Pickles has spent millions on consultants since he took the reins in the Department for Communities & Local Government reflecting the cost of the reorganisation underway at Eland House.

…is completely untrue.