Public spending watchdog hits out over "incompetence" in handling of £19m trade expert contract

Mark Sands
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Parliament's public spending watchdog has today blasted “incompetence” in a government plan to provide trade experts for UK exporters and overseas firms looking to trade in the UK.

UK Trade and Investment scrapped a £19m contract in January 2016 after just 15 months, leaving MPs with serious questions, and the influential Public Accounts Committee hitting out over poor decision-making by government.

And with the government on the hunt for more trade experts after Brexit, the committee has called on the Department for International Trade to review its capabilities in procurement.

Read More: UK can sign trade deals now, argues Brexiteer economist

UKTI, now part of the Department for International Trade, recruited PA Consulting services to provide trade and investment specialists in May 2014, paying £18.8m for the first 11 months of the contract.

However, UKTI became concerned about the way PA had priced the contract and about PA’s transparency, with the relationship breaking down.

The contract was terminated in January 2016, with UKTI agreeing to pay the balance of PA’s outstanding invoices less £3m.

And committee chair Meg Hillier warned that more than four months after taking expert evidence, “our committee cannot say with confidence that it has got to the bottom of what happened”.

“This clearly leaves us with serious concerns and we urge the government to commission the National Audit Office to conduct an independent forensic audit.”

Read More: What a post-Brexit UK-US free trade deal could mean for London

Investigating the collapse of the deal, MPs found that UKTI failed to keep records, and displayed poor governance, pushing to sign the contract even before negotiations were finished.

And MPs also claimed PA provided UKTI with “a service it is not clear it needed and failed to give the fair breakdown of its costs and profit that UKTI asked for”.

“The contract between UKTI and PA Consulting is a sorry saga from beginning to end. Our inquiry has been hampered by the lack of proper records from all parties concerned. We cannot remember a previous inquiry in which so many witnesses corrected their evidence after a public session,” the committee said.

“These events do not inspire us with confidence that we have got to the bottom of what happened. The incompetence by all parties involved in letting the contract, managing the contract and keeping records is an extraordinary coincidence. Such a lack of competence across the board leaves us with serious concerns.”

A spokeswoman for PA said the firm would welcome an independent forensic review into its dealings wuth UKTI.

"PA won this work in open competition, in response to a government procurement process, responding to a requirement set entirely by UKTI.

"UKTI acknowledges that PA over-delivered against the target outcomes, including creating or safeguarding 29,010 jobs," they said.

"We have accepted our share of the responsibility for misunderstandings between us and our client. We have conducted a review, and assured Government that there are no other misunderstandings on existing contracts. We have taken the necessary steps to ensure that such misunderstandings will not happen again."

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