‘Consultants’ cost SIC £21 million over six years

Over £21 million has been spent by Shetland Islands Council on consultants in the last six years.

Consultancy costs have been at least £2 million every year since 2011/12, peaking at £5.5 million in 2015/16.

Among the biggest recipients of the authority’s money since 2011 have been NIRAS Fraenkel (£2.4 million for work including the upkeep of Sullom Voe’s marine facilities), Hub North Scotland (£2.3 million for work on the new school and hostel) and Baillie Gifford (£2.1 million for work on asset management).

The information was acquired by The Shetland Times following a Freedom of Information (FoI) request. All figures include costs for travel, subsistence and other associated outgoings.

The full list can be viewed here.

SIC’s executive manager of finance Jonathan Belford said: “The council makes specific and targeted use of consultants to enable the effective delivery of services and any comment on the value of those consultancy services should be seen firmly in the context of the total expenditure that the council incurs [an average of around £185 million each year], and £21 million is a very low percentage of the approved budgets over that period.”

The amount spent on consultants doubled in the space of three years between 2011/12 and 2014/15, going from £2.1 million to £4.2 million.

However, the biggest spend was in 2015/16 when the final figure was £5.5 million.

A large proportion of the outgoings that year – and the year before – went on payments to Hub North Scotland for work on the new Anderson High School building and hostel. The cost of securing the firm’s services was around £1 million each year.

Asked how the council ensures consultants provide value for money, Mr Belford said: “The fact that these individuals and companies bring specialist skills to a small local authority provides excellent value for money when compared to the cost of trying to employ our own staff to fulfil such specialist roles.

The majority of consultants have cost the council under £500 for each piece of work.

But there have always been a small number of organisations whose services have cost more than £100,000. Broken down by year, they are as follows:

• In 2011/12: Mott MacDonald (£144,655); NHS Shetland (£151,230); NIRAS Fraenkel (£263,865); West Lothian Council (£152,903).

• In 2012/13: Baillie Gifford (£532,293); Insight Investment Management Ltd (£247,775); NHS Shetland (£155,174); NIRAS Fraenkel (£346,851); “pension fund external consultant” (£200,118)

• In 2013/14: Baillie Gifford (£415,535); Blackrock Life Ltd (£140,131); Insight Investment Management Ltd (£211,097); NIRAS Fraenkel (£504,666).

• In 2014/15: Baillie Gifford (£489,544.74); Blackrock Investment Management (UK) Ltd (£138,203); Blackrock Life Ltd (£97,258.51); Hub North Scotland (£1,024,863); Insight Investment Management (UK) Ltd (£131,445); NHS Shetland (£186,282); NIRAS Fraenkel (£349,513); Tulloch Developments Ltd (£156,718)

• In 2015/16: ACAD (Applied Care and Development) (£105,525); Baillie Gifford (£558,048); Blackrock Investment Management Ltd (£140,605); Blackrock Life Ltd (£312,052); Hub North Scotland Ltd (£1,185,812); Insight Investment Management Ltd (£139,994); Kleinwort Benson (£294,486); Newton (£393,929); NHS Shetland (£196,197); NIRAS Fraenkel (£476,247); “pension fund consultant” (£300,624).

• In 2016/17: Baillie Gifford (£603,223); Blackrock Investment Management (UK) Ltd (£170,263); Blackrock Life Ltd (£155,469); Insight Investment Management Ltd (£109,036); Kleinwort Benson (£412,337); Newton (£390,040); NHS Shetland (£197,265); NIRAS Fraenkel (£448,031); Seven Resourcing Ltd (£142,665).

Mr Belford said that he personally would not classify fund managers – such as Baillie Gifford, Blackrock and Insight Investment Management (UK) Ltd – as consultants because “they are very specialist in their field, [and] there’s no way the council would be trying to emulate a fund manager”.

The council department which has usually been the biggest spender on consultants is corporate services. Last year it spent £2.2 million – an increase of 675 per cent on its total for 2011/12 (£286,579).

In contrast, the chief executive’s department spent £19,612 on consultants last year.

The relatively low spend by the chief executive’s department in the last four years, including just £4,600 in 2014/15, represents a departure from the higher levels of spending seen in 2012/13 (£154,413) and 2011/12 (£554,311).

Other departments’ spending on consultants last year was as follows:

• Children’s services: £624,772;

• Development services: £405,749

• Health and social care: £92,334

• Infrastructure: £689,482

Not all consultants approached by the council have been businesses. Individuals have also carried out work for the authority.

For example, David Wagstaff’s work as an “Olympic torch consultant” in 2012/13 cost the council £3,337; Malachy Tallack’s work on “scenario planning” cost £1,400 in 2011/12; and Steve Westbrook’s work as a consultant on the “strategy for education” cost £6,780 in 2015/16.

Other consultants over the years include: Orkney Islands Council (costing the SIC £5,885 for its work as a “management consultant” in 2011/12); Wobblygang Productions (costing £14,154 as a “youth music” consultant in 2012/13); and the University of Edinburgh (costing £6,317.43 as a “special education” consultant in 2014/15).