The FSA paid out more than £13m in fees to external consultants last year.
Top earners include Defaqto which was paid £1,330,494 and PriceWaterhouseCoopers which received £1,208,663. Other big beneficiaries were Mills & Reeve with £366,953, QI Consulting on £345,905, Concerto Consulting with £362,098 and KPMG £316,518.
A freedom of information request made by Money Marketing shows 162 external consultants were paid £13,162,155 in 2006/07. Seventy per cent – £9,328,039 – went to just 20 organisations. The sum paid amounted to more than 5 per cent of the regulator’s budget of £276.1m for the year.
Michael Philips proprietor Michael Both questions whether the FSA is making the best use of its resources. He says: “Why is it paying highly paid consultants for strategic thinking? Isn’t that what their own highly paid staff should be doing? One would like to think they have hired good brains so they should be using them.”
Government body the Central Office of Information received the biggest chunk of fees paid at £2,619,916 while the University of Bristol received £148,977. Ernst & Young got £231,845 for its services while Echo Research was paid £268,751, Reputation Inc got £226,430 and IBM UK £223,250.
Both says: “Considering the resources that the FSA has, you have to ask does it need to spend 5 per cent of its budget on consulting? It should do a basic cost-benefit analysis on whether the cost of using outside analysts justifies their expense.”
But FSA spokesman Robin Gordon-Walker claims the regulator is making good use of its resources. He says: “Our strategic thinking is broadly done in house. A lot of the work of consultants is on research. The way we spend money on external consultants is on a basis of need and the most efficient way to meet requirements.
“We cannot comment on our individual contracts with consultants but, in general terms, we use consultants to help provide the FSA with information, research and analysis it needs to achieve its objectives and to conduct its business effectively.”
TOP 20 CONSULTANTS FOR FSA
COI Communications £2,619,916
Mills & Reeve £366,953
Concerto Consulting £362,098
QI Consulting £345,905KPMG £316,518
CRA International £277,303
Echo Research £268,751
Ernst & Young £231,845
Reputation Inc £226,430
IBM UK £223,250
IFF Research £218,504
Parity Resources £195,919
Ashurst £185,105CM Insight £169,356
McKinsey & Company £169,200
University of Bristol £148,977