Magazine article Public Finance

NAO Urges Performance-Related Contracts for Consultants

Magazine article Public Finance

NAO Urges Performance-Related Contracts for Consultants

Article excerpt

The army of external consultants advising Whitehall departments should be tied to performance-related contracts under plans to secure better value for taxpayers, a senior auditor said this week.

Keith Davis, head of efficiency at the National Audit Office, told Public Finance that departments should offer contracts whereby consultants receive 'payments by incentives or fixed outcomes' as part of plans to slash the £2.5bn annual bill for external advice.

Cabinet secretary Sir Gus O'Donnell recently wrote to all Whitehall bodies warning them to reduce their use of consultants. It followed an NAO report last December which revealed that Whitehall alone spent £1.8m on advice in 2005/06.

The auditors claimed that public bodies could make £500m in annual efficiency gains - a mixture of direct cash savings and improved contracting - by using consultants selectively. …

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