Consultancy Risks Government Contract Ban.

With £244 million in UK Government contracts won in the 12 months to March 2021, KPMG will no doubt be feeling the heat after receiving a letter from the Cabinet Office seeking assurances that there would be no further missteps after recent misconduct allegations.

KPMG risks being banned from bidding on government contracts altogether, should more concerning activity come to light after the consultancy was fined £13 million over misconduct in August over the sales of Silent Night to a private equity fund. In a separate matter, the Financial Reporting Council have accused KPMG of giving it “false and misleading” information about collapsed construction giant Carillion.

No doubt this KMPG caution will have a ripple effect across the rest of the Big Four who have collectively been dealing with a range of fines, investigations and legal cases in the UK and overseas. Last month saw one of PwC’s German offices raided as part of investigations into alleged tax fraud. In June, a Singaporean oil trader sued Deloitte & Touche LLP, alleging the auditing firm failed to detect “serious irregularities” in its financial statements for more than a decade. EY was recently fined by the UK accountancy watchdog for failing to properly challenge Stagecoach bosses when auditing their accounts.

It is not just the Big Four. Grant Thornton was recently fined £2.3m for audit failings relating to the collapse of Patisserie Valerie and Mckinsey have agreed to a $573m settlement in the US opioid scandal.

As a customer, the Government provides a healthy revenue stream for the major consultancy groups, who annually make up the lion’s share of Government contract wins in the UK. Even last year, through the midst of the pandemic, it was a bumper year in UK public sector contract wins for the four with Deloitte, KPMG, EY and PwC amassing approx £300 million of Government contracts, in 2020 alone.

Perhaps this clampdown comes after the UK Government itself has been under pressure from the National Audit Office for its lack of transparency of procurement of Covid related services.

To assist with procurement transparency around UK Government consultancy contracts, we’ve published every known contract in the UK for consulting contracts around the UK since March 2020, giving anyone the ability to monitor contracts being issued by the Government. The table is free, accessible to all and updated daily. If you are interested in knowing more about Government contracting opportunities and who has won them, take a look at our table, here.

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Image thanks to Patrick Robert Doyle.