Here’s how Brussels made the big consultants celebrate
In fact, between 2016 and 2019, the EU Commission spent more than 462 million euros on contracts with the Big Four of strategic consulting: Deloitte, Price Waterhouse Coopers (PwC), Kpmg and Ey. This was revealed by an investigation by Euractiv. Here are numbers and details
At the beginning of the month, the consultancy contract that the Ministry of Economy and Finance of the Draghi government had concluded with McKinsey for the drafting of the Plan had already been talked about, even if for significantly lower turnover (25 thousand euros). national recovery and resilience. Now, and with very different figures, the heated debate on the involvement of private companies in the management of public policies moves to Brussels and takes on continental contours.
In fact, between 2016 and 2019, the European Commission spent more than 462 million euros on contracts with the Big Four of strategic consulting: Deloitte, Price Waterhouse Coopers (PwC), Kpmg and Ernst & Young (Ey). This was revealed by an investigation by Euractiv , the pan-European information network based in Brussels, starting from information contained in official documents of the Commission, many of which also accessible through the FTS, the financial transparency system of the EU executive, the portal from where you can find all the beneficiaries of directly managed European funds.
Major recipient of EU funds, in the period considered by the Euractiv survey, is Kpmg, for a total of almost 155 million euros, followed by Ey (121.3), PwC (93.7) and Deloitte (92.2) .
SUPPORT FOR STRUCTURAL REFORMS
In recent years, advice has grown in particular in connection with the Structural Reform Support Program, the European Union "window" that provides Member States with tailor-made technical expertise, either by internal Commission staff or by hired outsiders. through other international organizations, private companies or NGOs, to plan and implement reforms in various areas, from competitiveness to the judicial system, from the financial sector to public administration, from social and labor policies to public accounts management.
Governments can, through a coordinating authority, request the support of the EU instrument (which is fully subsidized by Brussels and does not require national co-financing) in particular for the implementation of the structural reforms envisaged by the country-specific recommendations in the framework of the European Semester. , the coordination framework for EU economic policies.
For a few months (a very recent profile, however, not taken into account by the survey calculations), the skills provided by the structural reform support instrument (in the meantime renamed the Technical Support Instrument ), has also become an important pillar of the preparation and modification of the National Recovery and Resilience Plans (PNRR), the national strategies through which capitals can unlock Next Generation EU funds (672.5 billion) destined for States.
ONE THIRD OF THE CAKE
In 2017, the first year that the reform support program was operational, just 2% of the total went to private consultancy firms and the rest to international organizations. However, things quickly changed and in 2019, the last year examined by the investigation, the Big Four collected about a third of the budget available for consultancy in the preparation of structural reforms (about 25 million euros: 10.3 at PwC, 6.7 at EY, 3.9 at Deloitte and 3.4 at KPMG).
The "firepower" of the large strategic consultancy companies is destined to increase in the Recovery climate, foresees the EURACTIV survey, with an annual budget of about 115 million euros each year foreseen by the Commission for the Technical Support Instrument.
"THE BEST EXPERTISE"
The consultancy firms contracted by Brussels "provide the best world expertise where it is most needed", the comment of a Commission spokesman quoted by Euractiv, who also specified that all the contracts in question follow a public procedure that rewards the offer economically more advantageous and that the EU executive remains involved in the entire supply of the service. Yet many people raise some doubts about this normalization of the involvement of private strategic consulting firms in the preparation of public policies of the Member States in key areas.
Charged on paper to provide the necessary knowledge to governments to make decisions in technical and highly specialized fields (as also underlined by the executive vice-president of the Commission Margrethe Vestager), the Big Four conclude their reports with recommendations on the path to take, which then the national executive is free to follow or not. But according to some contracts cited by the investigation they would also be involved in decision-making moments.
CONFLICT OF INTEREST?
According to some MEPs cited by the portal, including the leader of the Greens Philippe Lamberts, there is not only the ethical dilemma over a sprawling role of companies in advising governments ("As the Commission has the money to hire external consultants, so would it have make new hires in its ranks "): the contracts would also raise problems of conflict of interest, given that the Big Four have in parallel, and on the same issues, also the provision of strategic advice to private actors. A node recently intercepted also by the office of the European Ombudsman, chaired by Emily O'Reilly, who in recent months had already warned against the outsourcing of consultancy to market operators with a clear regulatory interest in the area in question.
Asked by Euractiv, the Court of Auditors of the European Union confirmed that "it is evaluating the costs for external consultancy contracts made by the Commission in order to understand if it obtains a good quality / price ratio and at the same time protects its interests".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ecco-come-bruxelles-ha-fatto-festeggiare-le-big-della-consulenza/ on Sun, 21 Mar 2021 09:11:15 +0000.