There is an excellent article today in the Independent (thanks, Stephen) about the massive contribution to the Tories from accountancy firms.
Analysis by The Independent has revealed that leading companies including PricewaterhouseCoopers (PwC) and KPMG, have given the Tories nearly £500,000 since the start of last year as they attempt to build ties with the party that has a double-digit lead in the polls.
The firms involved already hold government contracts worth millions of pounds between them. More consultancy contracts would be on offer for auditors and consultants as the party would be forced to grapple with making vast savings across the public sector should it form the next government.
The Independent reckons these firms already have £4 billion worth of government contracts. Of course not only are they accountants and auditors, but “management consultants”. The idea that private sector consultants always know better took full wing under Thatcher and was enthusiastically adopted by New Labour. I have always found the argument that accountants know best how to fight wars, run hospitals and teach to be complete tripe. As the Independent says:
A single KPMG consultant working in the Department for Children, Schools and Families costs the taxpayer £1.35m over three years, a parliamentary inquiry found.
That’s ten teachers. We could make a start to saving public funds by banning the use of external consultants.
But the Tories’ dependence on these people should shatter any illusions that the Tories will better control the financial services sector. The financial services sector will, as always, control the Tories,
Newly elected Norwich North MP Chloe Smith was of course one of those seconded from the sector – from Deloitte – to the Conservative Party. It is an instructive case. After university, Smith worked for two Tory MPs, Gillian Shepherd and James Clappison – the latter famously bought 156 trees at taxpayer expense to mark the boundary of his country estate.
Chloe’s theoretical “Transfer” to Deloitte – while still in fact working for the Conservative Party on secondment – appears to be not only a subvention from Deloitte in taking a full time Tory hack onto their books, but a deliberate attempt to build up Chloe’s CV by making it appear she had not only worked for the Conservative Party.
As the Times put it:
She describes herself as a “business consultant” but is vague about what she does for Deloitte. Perhaps this is because she is on secondment to the Conservatives’ implementation unit
There may be one problem for them from this subterfuge strategy – unlike the secondments and donations mentioned in the Independent article, and unlike other secondments from Deloitte, Chloe Smith’s secondment has not been declared to the Electoral Commission as a donation to the Tory Party.
That is illegal.
Deloittes were, of course, auditors to the Royal Bank of Scotland/Natwest before the massive crash. A comment from Praguetory on a post below argued that nothing was wrong with the RBS audit. Well, that is true, if you overlook the failure to flag up the incredible over-valuation of worthless toxic assets, and the failure to warn that the biggest crash in corporate history was imminent.
I posted on this before, and hugely upset a (usually very interesting) accountants’ blog called The Sharpener, which had given a super review to Murder in Samarkand. But the plain truth is that all the first class financial scandals you can name – Polly Peck, BCCI, Enron, Equitable Life, RBS, Allan Stanford, Bernie Madoff – had blue chip accountants who signed off regularly on accounts giving a wholly false picture.
In not one of those case was it the auditors who blew the whistle.
The entire Western accounting system is based on the compliance of morally corrupt little pen pushers. The fact that it is the company which chooses its own accountants and auditors, who have a vested interest in keeping their mouths shut and are never prosecuted when a scheme folds (along with the hopes and savings of millions of investors), is a scandal.
Our jails should hold less desperate social security scammers, and a great many more accountants.