More than £100m of taxpayers' money is spent on private consultants each year, a report reveals today.
More than £100m of taxpayers' money is spent on private consultants each year, a report reveals today.
Audit Scotland criticised the lack of strategy in governmental spending, calling for better planning and more efficient organisation of public sector workers.
Simple changes to the way government bodies use consultants could lead to savings of £13m per year, the report said, significantly reducing the overall bill of £114m.
Regulators looked into public accounts from the 2006-07 period to compile their report - Central Government's Use of Consultancy Services - the most in-depth study of the topic in recent years.
Robert Black, Auditor General for Scotland, said: "Central government bodies need to plan their use of consultants so that they use their knowledge and skills where it brings greatest value for money. They should gather and share consistent information on what consultancy services they buy and why.
"Bodies should consider when it is better to use their own staff, and how best to ensure public servants learn from consultants when they are hired for projects or in advisory roles."
Auditors recorded £114m paid to 1200 consultancies during the period 2006-07. A significant proportion of the money was wasted on projects which could have been carried out by public servants or else secured with less expenditure through more efficient tendering procedures, the report added.
However, it also highlighted inadequacies within the public sector, noting that "consultants are used most often because staff do not have the skills or expertise needed". Reorganisation could provide a new framework in which to make more efficient use of talent.
The £114m total bill was split almost equally between government directorates, agencies and non-departmental public bodies. Scottish Enterprise and Highlands and Islands Enterprise accounted for £35m, while Transport Scotland spent £12m.
More than a third of total spending went on IT projects, with £29m on business consultants and £14m on financial services advisors. Legal consultation, human resources and property and estate services accounted for the remainder.
The report made recommendations which could save authorities £13m per year without threatening service provision.
Arranging for staff to take on consultancy work, or hiring more employees if necessary, could cut costs by £10m. An Audit Scotland study found that public employees are an average of two-thirds as expensive as private consultants.
"Based on current spending levels, central government can make savings of £1.6m annually by ensuring it uses the most cost-effective and appropriate competition route" the report added.
A further £1.3m could be kept in the public purse if greater use was made of existing framework agreements.
Despite the millions that could be saved through more efficient management and planning, Audit Scotland praised recent initiatives, estimating that around £1.8m was already being saved.
Opposition politicians were quick to voice their concern. Liberal Democrat finance spokesman Jeremy Purvis said: "The SNP needs to make sure that taxpayer's money isn't being wasted on unnecessary external consultants."
Derek Brownlee, Conservative finance spokesman, added: "This is a damning report from Audit Scotland which shows clearly how the Scottish Government can improve value for money."
