IT Consultancies take government to the cleaners


As
reported in the Register
today, IT firms are ripping off the government by charging more than twice the
market rate for staff, according to a recruitment company. 

ReThink Recruitment
said in a statement
that project managers, business managers, technical architects, software
consultants, programme managers and IT directors were all hired out by
recruitment firms at a charge of between £600 and £650 a day. They would then
be posted on government contracts by the big consultant groups, i.e. EDS, Accenture, PWC, etc between £1,200 and £2,000 a day.

Managing
director Jon Butterfield said the public sector found it harder to control its
staffing costs when it outsourced its project management to external
consultants. 

The
supply chain for key IT project skills was several tiers high, he said, and the
link at every level was taking a cut. “The final rate the outsourcing
provider bills the client is often several times the original price of the
skill at the bottom of the chain.”

What
ReThink didn’t say was that the average rate for the roles listed above to the
contractor
were only £300 to £500 per day. 

Recruitment
consultants consistently tell candidates that working for public sector clients
is at the bottom end of the market and rates are carefully capped.

Government
agencies would be better able to control their costs if they were to recruit
direct with contractors rather than via agencies, or to allow the big
consultancies to set the rate by which government is charged.  

If
they were to recruit direct using the popular electronic recruitment services such as Jobsite, they would reduce their staffing costs by
over 60 percent, and their choice of candidates would be much higher, with more
relevant skill sets available to them. This in turn means that as staffing
costs are the biggest part of the
PFI schemes, they could run
these projects themselves
, at a fraction of the overall cost, rather than
wasting billions of taxpayer money on the
PFI schemes.

They
would be able to recruit experienced contractors, providing true value for
money, rather than the plethora of graduates
preferred
by the big consultancy groups, as I wrote about in December06.

Also of concern is the distinct lack of IT knowledge within government, which if properly staffed with good skill sets would stop many of the abuses by consultancy groups setting  IT  capability and performance expectations way too high. 

The
downside to government of course is that Gordon Brown would not be able to hide
the costs by keeping the
PFI schemes off the books, and run up debts to IT
companies that will now take generations to pay off. 

Perhaps the Smith Institute could advise Gordon Brown on how to do this more cost effectively to the advantage of the taxpayer.

 

 

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About IanPJ

Ian Parker-Joseph, former Leader of the Libertarian Party UK, who currently heads PDPS Internet Hosting and the Personal Deed Poll Services company, has been an IT industry professional for over 20 years, providing Business Consulting, Programme and Project Management, specialising in the recovery of Projects that have failed in a process driven world. Ian’s experience is not limited to the UK, and he has successfully delivered projects in the Middle East, Africa, US, Russia, Poland, France and Germany. Working within different cultures, Ian has occupied high profile roles within multi-nationals such as Nortel and Cable & Wireless. These experiences have given Ian an excellent insight into world events, and the way that they can shape our own national future. His extensive overseas experiences have made him all too aware of how the UK interacts with its near neighbours, its place in the Commonwealth, and how our nation fits into the wider world. He is determined to rebuild many of the friendships and commercial relationships with other nations that have been sadly neglected over the years, and would like to see greater energy and food security in these countries, for the benefit of all. Ian is a vocal advocate of small government, individual freedom, low taxation and a minimum of regulation. Ian believes deeply and passionately in freedom and independence in all areas of life, and is now bringing his professional experiences to bear in the world of politics.
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