Why were SMEs barred from bidding for £75m worth of ‘secret’ Brexit Whitehall work?

Sky News reveals how major Brexit procurement was hidden under ‘Health and Community’ – and also given to ‘the usual suspects’

Posted 10 January 2019 by

Sky News yesterday revealed that the government “quietly awarded” £75m of Brexit-related contracts to some of the world’s biggest consultancy firms and which were never publicly announced, with contract value ranging from £5m to £10m.

And guess what – it’s Deloitte, Accenture and PwC type companies that won all this work… with nary an SME in the whole supply chain, with US firms Bain, McKinsey and Boston Consulting getting £25m level deals.

All nine agreements are described as contracts for “the supply of Cabinet Office consultancy support for EU Exit”, and are apparently due to run until 30 April 2019, but with the option for them to be renewed for a further year at the same cost.

Details were placed on “an unobtrusive part of the government website just before Christmas, eight months after they had come into action”.

But despite each including contracts running to more than 200 pages, crucial facts were removed – such as who in the government signed off the agreements and what work was actually involved, the story notes, adding that the reporter was told programme and project management, commercial expertise and advice in “operational delivery” were what the Cabinet Office went to market for.

Winners of this big chunk of important government business are

  • Boston Consulting Group – £10m
  • Bain & Company Inc. United Kingdom – £10m
  • McKinsey and Company, Inc. United Kingdom – £5m
  • Accenture (UK) Limited – £5m
  • Deloitte LLP – £10m
  • Ernst & Young LLP – £10m
  • Mott Macdonald Limited – £5m
  • PA Consulting Services Limited – £10m
  • Pricewaterhousecoopers LLP – £10m
  • What is a bit puzzling is also how the procurement contracts were awarded under a framework titled ‘Health and Community’, but are, in fact, “entirely focused upon preparations for Brexit”.

Chair of the Public Affairs Committee Meg Hillier, is quoted as saying she condemned the secrecy and delay as “ridiculous” and said the contracts would now be referred for investigation by the National Audit Office:

“It’s not a secret that the government needs management consultants to help prepare for Brexit. But not to tell us what those consultants are doing, when they’re being paid between £5m and £10m, is just crazy.

“I will be talking to the National Audit Office about this [as our Committee has] talked to them before about other contracts and they have the ability to go into a contract and see, in details, what’s involved. We should know what the government is spending and what it’s spending it on. Let’s not forget that this is taxpayers’ money.”

Sky News also interviewed Lord Kerslake, former head of the Civil Service, who was equally unimpressed:

“The question here – given the level of spend – is this, would it not have been more appropriate to have an open tendering process where anyone can bid rather than drawing from a framework contract that was inevitably a shorter list of companies to choose from?

“I don’t suggest there is anything inappropriate that has gone on here but I do think it raises questions about securing value for money given the scale of spending involved.”

The Cabinet Office is quoted as responding that, “It is standard for Government departments to draw on the advice of external specialists to deliver key government policy: all government contracts are published online, and these are no exception.”