[Pounds Sterling]1.3billion; That's What the Blair Administration Lavished in a Year on Getting Advice from Management Consultants - and the Gravy Train Just Keeps on Rolling

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Byline: PAUL EASTHAM

WHITEHALL spent an astonishing [pounds sterling]1.3billion on management consultants last year - more than [pounds sterling]3million a day.

The outlay was twice that of the year before and makes the Government by far the biggest single spender on business advice.

It comes at a time when Gordon Brown is promising to save [pounds sterling]20billion a year by cutting the cost of running government.

Figures from the management consultancies' trade body show that central Government doubled its spending to [pounds sterling]1billion last year, while other public bodies spent a further [pounds sterling]300million.

If it was not for the Whitehall bonanza, the industry would be in the doldrums, with private firms cutting back their spending on consultants by four per cent.

The Management Consultancies Association's annual report shows spending by the public sector on business advice 'far outstripping the rates of growth in other sectors'. The UK industry recorded an overall increase of 13 per cent in fees coming in last year, entirely due to the boom in work coming in from the Government.

Central government is now the biggest single customer for the consultancy industry, accounting for 22 per cent of the market.

Experts regard the figures in the association's authoritative report as the best snapshot of trends in the industry.

But the figures could underestimate the true scale of Government spending in the sector, because the association represents only 60 per cent of management consultancy firms.

It does not represent some of the highest-charging consultants - such as U.S.based McKinsey, which regularly works for the Government.

Most Government departments have hired consultants for major projects.

One of the biggest deals was from the Department for Work and Pensions, which employed technology advisers PA Consulting when it upgraded the computerised benefits payment system.

Others included Transport for London, which brought in Deloitte to mastermind the introduction of the congestion charge in central London. The NHS has also hired outside advisers to work on a massive ten-year scheme to improve computer networks for GPs and hospitals.

In its report, the Management Consultancies Association makes clear that it expects the boom to continue for some time. …