Chief executive mounts robust defence of £300,000 spent by council on consultants

Almost £300,000 has been spent so far on hiring consultants to advise Shetland Islands Council how to cut costs and improve its performance. The 15 people drafted in so far have been charging on average £450-£500 a day each for their services.

The figures were revealed today following a request to the local authority by The Shetland Times under Freedom of Information provisions. But the council declined to reveal the day rates of individuals due to their desire for commercial confidentiality.

The hiring of outside help to rapidly implement a wide-ranging improvement programme was robustly defended by chief executive Alistair Buchan. He said the level of independence and momentum provided by expert consultants was essential to successfully implement change.

“I’m not going to apologise to anybody for the use of consultants,” he said. “I’m absolutely clear their input is needed to move this organisation forward. I’m very confident we’ve got the right formula for change.”

The expertise is already paying for itself, he said, citing one example of a consultancy costing around £70,000 which has put the council “well on track” to cutting the cost of top management by £1 million a year.

The 75 manager posts below Mr Buchan have now been whittled down to just 38. He said: “There is no way that could be achieved without external consultancy.”

Working with the council’s own staff, the consultants have also helped find savings of £7-8 million from this year’s total budget, towards required savings of £9 million.

The consultants have also overseen the introduction of a new committee system designed to improve political decision-making in the blunder-prone local authority.

Challenged about the handsome rewards for individuals, Mr Buchan said the typical daily rate was just two-thirds of what the council was paying consultants 10 years ago. Today, high-powered consultants can command fees of £1,000-a-day or more.

He said: “I have always driven a hard bargain with consultants and I believe I’m getting excellent value for money for Shetland.

“We’re talking about people who have been at the top of their profession in Scottish local government. That is why they are here. They are highly regarded and respected in their fields across the country.”

Mr Buchan was handed a budget of £1 million to carry out the radical surgery required to revive the council following grave failings in its performance uncovered by the Accounts Commission. There were suggestions that failure to act might lead to the commission or even the Scottish government intervening to assume control of the failing body.

The chief executive has come in for some criticism for relying on outside consultants but Mr Buchan was keen to stress that only four of the team had been engaged by him. Several were chosen by councillors themselves.

He also denied suggestions that he was too ready to slash jobs and services. He said: “I’m not some sort of macho-manager who believes in cost-cutting to make a name for himself.”

Four of the consultants – Brian Lawrie, Keith Yates, Nigel Stewart and former NHS Shetland chief executive Sandra Laurenson – were engaged through the local government improvement service run by the Scottish government and the local authority organisation Cosla. They have cost a total of £170,427 (up to 31st July). Travel costs amounted to £15,837 and accommodation cost £13,334.

A team of six people from The Chartered Institute of Public Finance and Accountancy, PricewaterhouseCoopers and a freelance has been paid £67,431 up to the end of July for financial assistance, which started in October.

Peter McKiernan and Gary Bowman have been helping plan for the future through the scenario planning process, at a cost so far of £33,429.

A further £18,338 has been paid to Rosie Docherty and Jean Couper from Cosla’s job evaluation consortium over a five-month period to help re-organise senior council posts.

The only consultant whose exact fee is known is communications specialist Tom Morton, the journalist and radio DJ. He earned £6,975 for his part-time involvement between 1st December and 31st July. He is due to continue until the end of this month.

Mr Buchan said a mistake of the past had been the failure to invest in change, which any successful private company would have done. However, there had been a clear recognition among councillors that things had to change.

He said: “The scale of the difficulties this council face – which are well-documented by an external report – illustrate the need for rapid change and a clear decision of the council was to make the change as quickly as possible while doing the job right.”

He singled out Mrs Laurenson for particular praise, saying he was “absolutely delighted” by the results of her quest for savings. One of her ideas, the staff suggestion scheme for making savings, has already attracted 110 responses.




Add Your Comment
  • Pat Horne

    • September 7th, 2011 21:22

    Wow, your Mr. Buchan knows how to get a good deal! On average each consultant will “work” 42 days @ an average charge out rate of £475 per day. Each consultant should achieve savings of £600K per person (or £14,285 per consultant per working day) to achieve the council’s goal of £9 Million in cost savings.
    Sure consultants can deliver excellent value for money and look at issues objectively, but like anybody they will go for the quick wins initially and thereafter there effectiveness will become less so etc. I am surprised the council didn’t think about setting up a “working body” within to look at the “Quick Wins” on the basis this would be an internal cost and probably saved 2/3rd of the consultancy cost. The consultants could have then looked at the legacy and scoped out the more difficult issues.
    Having worked in management myself (and yes I am a consultant as well) I certainly wouldn’t be looking to pay a consultant (Mrs. Laurenson) to come up with the idea of a “staff suggestion box” and Mr Buchan was “absolutely delighted” – Mr Buchan states he drove a “hard bargain” with consultants – clearly his level of acceptability isn’t too great, as Mrs Laurenson is costing a notional average of £43K! (An office junior could have come up with this idea! Assuming the 110 suggestions were valid ones, it does beg the question why hasn’t somebody already thought about this or bought a good book on the subject of slashing costs £20?!)
    Mr Buchan – you strike me as a disgrace and typical of somebody who is in charge but in reality is clueless. I think you need to look at things from a different perspective, use some of the internal talent you have, look at the council like a business and use key people (you already pay them!) who know the council, islands & people – but then you have already spent circa 1/3rd of your budget to save £9million, clearly savings isn’t something you are having to worry about!

  • ian Tinkler

    • September 8th, 2011 11:23

    Wow. Well done sir. Now go please.

  • Sandy McMillan

    • September 9th, 2011 17:55

    Mr Buchan knows how to spend, but ofcourse its not his own, why do the Council need Consultant in the first instance, surely out of the 23 of them, that includes Mr Buchan, there has to be one with somthing between the lugs, all Buchan has done since his appointment is lay of staff and spend money, the sooner he goes the better financially Shetland will be.


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