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PwC consultancy goes sour at Inverclyde

14th Jan 2011
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A PricewaterhouseCoopers (PwC) consultancy project to introduce efficiency savings at Inverclyde Council in Scotland hit the headlines this week with the suspension of four senior officials responsible for the £650,000 project.

Corporate director Paul Wallace, heads of service John Arthur and Gordon McLoughlin and Arun Menon who heads IT project management (on salaries ranging from £75,000 to £105,000) have been suspended while the council undertakes an investigation why the project that was supposed to generate £1.9m in savings only achieved efficiencies worth £250,000.

The Evening Times reports that the four officials helped to launch the Future Operating Model (FOM) drive in February 2009, with a target to recoup £6.43m in organisational savings three years.

A government shared risk report compiled in in July 2010 for housing, social care and education authorities warned Inverclyde Council that it needed to “ensure that the Future Operating Model was going to deliver its projected efficiency savings and the intended improvements”.

Based on the latest published figures, the FOM project spectacularly failed to do so. In spite of effectively producing an operational loss on this scheme, PwC won a further £300,000 consultancy contract that was not put out to tender, plus another later commission for a contract that did go out to tender.

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