CROSS POSTED ON BYLINE.COM
If you were running a business would you employ people without checking how much you are paying them? Would you lose your documents for outlining your business case for a crucial contract? Would you also sign a deal that was so complex – running to over 600 pages – without understanding what you are doing?
Of course you wouldn’t or you’d soon be bust.
This and more was done by a Whitehall agency in a botched up privatisation contract which allowed the contractor to rip off the government and the taxpayer and left the agency looking daft.
What is more serious is that the agency is UK Trade and Investment – the very organisation that will be at the heart of advising British firms on how to capitalise on exports and encouraging foreign firms to invest in Britain – post Brexit.
While ministers have been flying round the world promising an exciting future for trade deals outside Europe – the body that actually has to do all the nitty gritty work has been an embarrassing failure that couldn’t organise the proverbial p… up in a brewery.
The whole sorry saga was outlined in a report by MPs on the Public Accounts Committee which came out during the recess following a National Audit Office investigation. I also wrote about this and another privatisation failure involving tax credits in Tribune magazine.
The firm which ripped off the department was PA Consulting who were asked to supply staff to provide specialist advice to exporters. One extraordinary fact in the report is that PA Consulting jacked up consultants rates by £142 a day – some 29 per cent – between the bid and the deal ..and UKTI did not even notice it.
The MPs said : ”
“UKTI displayed poor governance and did not keep proper records. It made a simple matter as complex as possible. It negotiated significant changes to the contract with PA when it should have gone back to the market. It pushed to sign the contract before it had finished these negotiations. All this was unfair to other bidders and left UKTI exposed to being exploited by PA.
“For its part, PA fell well short of the appropriate duty of care that we expect contractors to demonstrate when in receipt of taxpayers’ money; instead of looking out for its client, PA took advantage of UKTI’s poor decision making. It sold UKTI a service it is not clear it needed and failed to give the fair breakdown of its costs and profit that UKTI asked for.
“Instead, it used the negotiations to pass on costs to UKTI that it had said in its bid that it would bear, and to increase its profit from the contract while telling UKTI that its profit had not increased. Our inquiry has been hampered by the lack of proper records from all parties concerned.”
The MPs are demanding a forensic audit of UKTI as a result of this fiasco. I should say so or otherwise I don’t see British firms getting any meaningful help from this group of naive incompetents when we do start having to negotiate new trade deals.
Marcus Agius is Chairman of PA since January 2014. Marcus was Chairman of Barclays for six years until October 2012. He was also the Chairman of the British Bankers Association and a Member of the Take-over Panel. He was the first Non-Executive Director to be appointed to the BBC’s Executive Board, acting as its Senior Independent Director until November 2012. Before then, Marcus was Deputy Chairman of Lazard Ltd, and Chairman of Lazard in London. He also served as a Non-Executive Director of BAA plc, becoming its Chairman in 2002. He is Chairman of the Trustees of the Royal Botanic Gardens, Kew.
Just wondering is connections to the government? One thing is sure we will not be hearing this story on the BBC. if memory serves me right he was at the heart of the Libor scandal. DO WE NEED TO SAY MORE ABOUT UK TODAY
As well you know David, these things are engineered for someones benefit, they are not mere mistakes or bad governance/due dilligence. if this happened, it was meant to happen, and someone somewhere new about it but let it slip through. look into the connections with the government to find how their friends got in on it and I’d put money on their being a major donor/beneficiary in there somewhere 🙂
How much is the arm’s length relationship between Department and agency responsible? Do DTI’s own internal audit people have anything to say on the subject?