The federal government spent more than half a billion euros on external consultants last year. This is the result of answers from the Ministry of Finance to questions from left-wing MP Matthias Höhn. The exact value cannot be determined yet, as four of the 15 ministries have so far only reported the figures for the first half of the year. Although the Ministry of Defense is one of them, it ranks first in the ranking with expenditure of 154.9 million euros for outside consultants. It is followed by the Interior Ministry with 152.4 million euros throughout 2019 as well as that Department of Transportation with 110.6 million.
The least additional expertise was therefore bought by the Chancellery (537,000 euros in the second half of the year), the Ministry of Science (717,000 euros) and that Ministry of Justice (2.4 million euros).
The total budget for consulting services per year has increased dramatically in the past decade: According to the Ministry of Finance, the sum of all
Expenditures of all ministries in 2011 at 93 million, in 2014
at more than 60 million and in 2017 at 248 million.
In her reply to Höhn's request, State Secretary for Finance Bettina Hagedorn pointed out that there is no uniform definition in the individual ministries for external "advisory and support services". Therefore "it cannot be assumed that the information can be compared across departments". The numbers are to be regarded as provisional.
Engaging business consultants and
other experts through the Federal government is high
controversial: The point of contention is whether the purchase of expertise is too expensive
and possibly even given the more than 20,000 ministries
would not be absolutely necessary. It also becomes too big an impact on the
Government work and increasing dependence on private providers are feared, Proponents promise against it in
very different areas add value by looking at
outside or use experts for special tasks for which no fixed
Employees are needed.
Consultant expenditure has increased almost tenfold since 2014
Höhn criticized the level of expenditure. "You can only shake your head," he said. "The federal government has thousands of competent civil servants in the ministries. First of all, they are there to do the substantive work for the government. Everything else makes a government dependent on private companies. That would be unacceptable."
Government spending on external consultants has been increasing for years. In February of last year, a similar survey by the Ministry of Finance showed that there had been a significant increase between 2014 and 2017. In 2014, government spending on consultants was € 63 million, in 2015 it was € 105 million and then in 2016 it was € 243 million. In 2017, the government spent 248 million on advisors, less than half as much as in the previous year. At that time, there were no complete figures for 2018.
The high spending of the Ministry of Defense has been criticized in the recent past. In 2018, the Federal Audit Office strongly questioned the profitability and legality of the advisory service in the Ministry. The engagement of consultants in the department has been reviewed by a committee of inquiry of the Bundestag for six months. It is about allegations of incorrect order placement past the procurement guidelines to nepotism. In mid-February, the committee interviewed the former Defense Minister and current EU Commission President Ursula von der Leyen. Recently, the deletion of data on two cell phones that she used as a minister had intensified the allegations against the ministry.
Ex-State Secretary justifies herself in the committee of inquiry
On Thursday, the former Secretary of State for Defense Minister Katrin Suder defended the costly use of external advisors before the committee. Von der Leyen appointed Suder as State Secretary in 2014, previously Suder was a consultant herself – at the consulting firm McKinsey, As such, it has betrayed, among other things, the Ministry of Labor, which at the time also had run the Leyen. Suder's task from 2014 was to modernize the armaments system within the Bundeswehr.
According to her before the committee, external help was often necessary for this. "External advisors have always been a means, never a strategy," said the former official. Consultation expenditure increased during her time at the ministry, but the increase was less than the increase in procurement volume.
Suder also rejected the accusation of nepotism. She comes from the private consulting industry and has always separated professional and private practice. "I have made it a rule to speak less rather than more," said Suder. She has always ensured that ex-colleagues from business are dealt with more transparently. In addition, she was not involved in the decision to involve external consultants.
"I didn't perceive it that way"
She described her private friendship with the management consultant Timo Noetzel, who also worked for McKinsey, as unproblematic. After moving to the consulting firm Accenture, he was able to increase the company's sales of Bundeswehr contracts from half a million euros in 2014 to 20 million in 2018. To a testimony that Noetzel had a special connection to the management level of the ministry, Suder now said: "I didn't perceive it that way."
Suder was State Secretary until 2018, today she works at the Hertie School and is Chair of the Federal Government's Digital Council – an advisory body. She had refused to testify before the Defense Committee, which initially examined the awarding of external advisory services. As a result, the committee of inquiry was formed, which is the only committee that has the option of enforcing subpoenas. Now Suder said that she had no intention of disregarding Parliament at the time, as stated in a statement by the Bundestag to the meeting of the committee of inquiry. Instead, she only canceled because she was accused of criminal behavior in public at the time.