IT consultant paid £2,000 a day to cover civil servant's job(theguardian.com)
theguardian.com
IT consultant paid £2,000 a day to cover civil servant's job
http://www.theguardian.com/uk-news/2014/feb/11/mod-it-consultant-paid-2000-day-cover-civil-servant-job
8 comments
I have worked for various different companies where they pay developers up to 3 times less than contractor developers and in some cases I have seen companies have more contractors to developers for long periods of time. I understand contractors are useful but they are not worth 3 times more.
remember a number of things (in UK at least):
Employee hidden costs: Employers NI, PAYE, car allowance, holiday pay, sick pay, maternity pay, paternity pay, training, pension, healthcare
Contractors have to pay all of that from their turnover - along with professional indemnity insurance, public liability insurance, accountancy fees etc.
And note I said turnover. There seems to be this misconception that all contractor payments go straight into the contractor's pockets. They don't, they are business receipts that go into a company. That company then pays the contractor.
What contractors do get is the ability to shift things around as they see fit. Employees are stuck with whatever structure of payments to make up "the package" is decided by the higher ups.
Employee hidden costs: Employers NI, PAYE, car allowance, holiday pay, sick pay, maternity pay, paternity pay, training, pension, healthcare
Contractors have to pay all of that from their turnover - along with professional indemnity insurance, public liability insurance, accountancy fees etc.
And note I said turnover. There seems to be this misconception that all contractor payments go straight into the contractor's pockets. They don't, they are business receipts that go into a company. That company then pays the contractor.
What contractors do get is the ability to shift things around as they see fit. Employees are stuck with whatever structure of payments to make up "the package" is decided by the higher ups.
It's funny how brobdingnagian salaries have to get for people to feel shocked.
Would it be OK for only £1,000 a day? £200 a day? Seriously, where is the limit?
Would it be OK for only £1,000 a day? £200 a day? Seriously, where is the limit?
For the top rack, which is this... short term contract, I am not outraged. Should I be?
Except the article says it's not really short term and she's overseeing several long term projects.
The public sector in the UK is notorious for keeping these 'temporary' people in place at great cost to the taxpayer.
The public sector in the UK is notorious for keeping these 'temporary' people in place at great cost to the taxpayer.
The article precisely says that "It is understood that Ferguson is on a short-term contract".. And the fact that she has prior top-end contracts with RM and TfL proves that she will not be there forever.
It's too easy to assume situations like this are 'at cost' to the taxpayer, it's probable that it is a net saving to the taxpayer.
It's too easy to assume situations like this are 'at cost' to the taxpayer, it's probable that it is a net saving to the taxpayer.
It's very unlikely this is a net saving to anyone, Capita are involved.
Who knows? But It´s easy to see how so much money is wasted...
According to the article, the recruitment was from the private sector and pays the market rate. If this was nepotism, then I would had agreed with the waste argument. But just because someone is being paid 10x the majority, doesn't make the decision to recruit them wrong.
It doesn´t make the decision wrong. It´s a supply and demand game isn´t it? It´s hard not to second guess in this matter, but you have to presume that the cost to replace them is much greater.
It's easy to get up in arms about consultants being paid a high rate. But who really knows how much time and money was wasted among the 50,000 staff that was laid off? This is a very difficult question to answer, since "performance" can't be measured accurately.
Exactly. A consultant's job is to deliver results from day one. If not, they're quickly out the door. The same can't be said for staff because they are considered an investment by their employer and therefore kept around much longer despite how much the drop off in "performance" may be compared to a consultant.
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This article is highly misleading. Shoddy reporting from the Guardian there.
She's not on a £2k/day salary, that's just the rate paid to Capita, a consulting company. For a senior person (e.g. partner-level), £2k is actually on the cheap end. I went for £400/day 10 years ago as a Junior Software Engineer fresh out of uni, and by the time I left my day rate was about £1k/day.
(My rate was from Accenture - somewhat more high profile than Capita, but shows that £2k/day of chargeout rate is not so extraordinary).
In case this was not obvious, neither myself not Ms Ferguson take home anything close to the day rate - back when I was being sold at £400/day my own salary was a whopping £22k p.a.
She's not on a £2k/day salary, that's just the rate paid to Capita, a consulting company. For a senior person (e.g. partner-level), £2k is actually on the cheap end. I went for £400/day 10 years ago as a Junior Software Engineer fresh out of uni, and by the time I left my day rate was about £1k/day.
(My rate was from Accenture - somewhat more high profile than Capita, but shows that £2k/day of chargeout rate is not so extraordinary).
In case this was not obvious, neither myself not Ms Ferguson take home anything close to the day rate - back when I was being sold at £400/day my own salary was a whopping £22k p.a.
But the point of the article is that the MOD is trying to cut costs. The takehome wage of Ms Ferguson is irrelevant, she is still costing the MOD £2k/day.
IMO there is a reasonable story here: is the ministry really saving much money by laying off staff and then, as a result, being forced to bring in contractors at much higher costs?
IMO there is a reasonable story here: is the ministry really saving much money by laying off staff and then, as a result, being forced to bring in contractors at much higher costs?
If they bring in permanent staff to fill a short term role and lay them off as soon as they find the right person, that will cost a lot of money. Layoffs aren't cheap in the UK, even in the private sector.
When you pay a lot of money for a contractor, part of what you are paying for is the right to get rid of them easily.
When you pay a lot of money for a contractor, part of what you are paying for is the right to get rid of them easily.
The Guardian has an agenda, and they routinely misinterpret things to sell news.
They're the "daily mail" of the left. Happily, judging by their circulation figures, they won't be around too much longer.
They're the "daily mail" of the left. Happily, judging by their circulation figures, they won't be around too much longer.
I wouldn't quite go that far. While The Guardian drives me nuts sometimes, especially regarding UK politics, it's markedly less nakedly evil than the Daily Mail. See the recent NSA revelations for good, high-quality, pushing-the-boundaries journalism, which we'd all miss were it gone.
Everything is less evil than the Daily Mail so that's not much of a comparison.
I've given up reading the news in the UK. It's either biased towards the agenda of the paper or terribly depressing. Both unfortunately sell very well. I've even got rid of my television. Life is good.
I've given up reading the news in the UK. It's either biased towards the agenda of the paper or terribly depressing. Both unfortunately sell very well. I've even got rid of my television. Life is good.
I guess. Though I'd argue that the UK's media outlets are actually among the least consistently unusable. At least for bare-bones here-are-the-facts reporting, the BBC is pretty useful.
In any case, I don't know how feasible it is to have a "non-biased" newspaper that pushes actual journalism.
In any case, I don't know how feasible it is to have a "non-biased" newspaper that pushes actual journalism.
The BBC however have very selective reporting.
It probably isn't. I was hoping WikiNews would end up being that to be honest.
It probably isn't. I was hoping WikiNews would end up being that to be honest.
The BBC is pretty left leaning. I expect the vast majority of BBC workers read the Guardian.
The BBC is accused of being left-leaning by right-wingers, and right-leaning by left-wingers. I suspect you're right, and it's slightly left-leaning in practice, and I'd argue that this reflects reality.
So they published stolen state secrets, and put people in danger. Yay them!
Makes 'phone hacking' seem lame in comparison.
Makes 'phone hacking' seem lame in comparison.
It's substantially more complex than that, and you know it. Don't trivialise an important issue.
Just a touch more evidence based than the DM, but anyone who is in the business of selling news a) has an agenda and b) need to sell their stories, so quelle surprise.
I think the reason The Guardian is interesting is because they don't really need to sell their stories.
They happily make millions of pounds of losses each year, and are bankrolled by people who seem to not mind.
They are not driven by profit, they're driven by a moral crusade (A mistaken one IMHO, but still).
They happily make millions of pounds of losses each year, and are bankrolled by people who seem to not mind.
They are not driven by profit, they're driven by a moral crusade (A mistaken one IMHO, but still).
The Guardian is funded by a trust. It is losing money but the circulation figures mean little: Print is dead.
It's funded by sales from some other profitable less biased papers/magazines.
Losses after losses... at some point, something's gotta give.
"Funded by a trust" isn't some magic get out of jail free card.
Circulation figures for other newspapers are doing pretty well actually. Print still has a long life ahead.
Losses after losses... at some point, something's gotta give.
"Funded by a trust" isn't some magic get out of jail free card.
Circulation figures for other newspapers are doing pretty well actually. Print still has a long life ahead.
Not really. Only tangentially.
Unless the claim is that the Ministry of Defense laid off their CIO - which is the role she’s playing. They’re just in the process of looking for a new one, which doesn’t happen overnight.
Unless the claim is that the Ministry of Defense laid off their CIO - which is the role she’s playing. They’re just in the process of looking for a new one, which doesn’t happen overnight.
> She's not on a £2k/day salary, that's just the rate paid to Capita, a consulting company.
The point is that the state foots a £2000/day bill to replace a civil servant who'd be paid what, 10% of that? For a total cost of 20% including charges and the like? Which is an odd move if the goal is to reduce costs.
The point is that the state foots a £2000/day bill to replace a civil servant who'd be paid what, 10% of that? For a total cost of 20% including charges and the like? Which is an odd move if the goal is to reduce costs.
The point is that the state foots a £2000/day bill to replace a civil servant who'd be paid what, 10% of that?
The trouble with this argument is that it is based on the assumption that you could actually hire someone with the skills necessary to fix the much-maligned IT facilities of a major government department for a salary to them of, say, £30k. Given that someone with those skills has a market rate that is an order of magnitude higher than that, this seems implausible.
If this person is actually competent to do the job, then given the amount of money the MoD can expect to save as a direct result of changes she brings in, the rate they're paying is reasonable. It may be politically awkward, because the average voter probably doesn't understand the economics involved, but that's a different issue.
The trouble with this argument is that it is based on the assumption that you could actually hire someone with the skills necessary to fix the much-maligned IT facilities of a major government department for a salary to them of, say, £30k. Given that someone with those skills has a market rate that is an order of magnitude higher than that, this seems implausible.
If this person is actually competent to do the job, then given the amount of money the MoD can expect to save as a direct result of changes she brings in, the rate they're paying is reasonable. It may be politically awkward, because the average voter probably doesn't understand the economics involved, but that's a different issue.
I completely agree, I was mostly pointing out nitpicking on what goes to the consulting company versus the actual employee is not relevant to the article.
> The point is that the state foots a £2000/day bill to replace a civil servant who'd be paid what, 10% of that?
30% (according to the article - 500k pa vs. 150k pa).
In any case, it's a new role that didn't exist before, so there's naturally a lot of set-up effort. It makes sense to get a more experienced person before hiring someone definitively.
30% (according to the article - 500k pa vs. 150k pa).
In any case, it's a new role that didn't exist before, so there's naturally a lot of set-up effort. It makes sense to get a more experienced person before hiring someone definitively.
You can't compare 500k pa on a short term contract with 150k pa on a permanent civil service contract.
That 150k comes with a fantastic pension (final salary!), they have to pay employer taxes, insurances etc. Not to mention that they're almost impossible to fire.
It's closer to a 300k vs 500k pa comparision.
That 150k comes with a fantastic pension (final salary!), they have to pay employer taxes, insurances etc. Not to mention that they're almost impossible to fire.
It's closer to a 300k vs 500k pa comparision.
It won't come with a final salary pension since that was reformed, but the contributions are still around the 20-25% mark, vs 6% in the real world.
It will if it ends up being an internal transfer.
Exactly, which is 95% assured - the top positions will go to experience people.
For a permanent employee, don't forget the employer NI contributions, pension, paid holiday, possibly maternity pay, expenses, etc. So maybe the total cost for a permanent employee would be 40-50% of the contracter
Did you read the article? This is for the CIO... the C.I.O of the MoD she isn't some project management office admin clerk, she has previously been the CIO of the Post Office too, so is well qualified in the matter.
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It does mention that the £2k is the charge paid by MoD further down the page, although I admit it could be clearer.
Good luck with the messaging on this one when the wider press get hold of it.
Good luck with the messaging on this one when the wider press get hold of it.
> This article is highly misleading. Shoddy reporting from the Guardian there.
Like most of their journalism.
Like most of their journalism.
Another silly article to my collection: http://linkbaiters.tumblr.com/post/77169841950/it-consultant...
Civil Servant?
(I'm wasting my time here)
Civil Servant?
(I'm wasting my time here)
Why does anyone allow their labor to be resold at such a high profit to someone else? If someone will pay £400/day for your services then you ought to receive the bulk of that yourself.
Because nobody would have hired me for £400/day at the time, since I had no experience. The cachet of "Accenture" was what allowed them to sell me at that price. Without Accenture, I would not even have been considered for that role.
It's more true than it seems. The client I first worked at was UBS. While I was in Switzerland, I actually applied for a role at UBS - they rejected me outright. Accenture hired me, and then sold me to UBS for probably 5x what UBS would have paid if they'd hired me.
Whilst I felt a bit used in this, I do recognise that most of that 5x premium was due to Accenture's brand, nothing to do with my skills or experience.
It's more true than it seems. The client I first worked at was UBS. While I was in Switzerland, I actually applied for a role at UBS - they rejected me outright. Accenture hired me, and then sold me to UBS for probably 5x what UBS would have paid if they'd hired me.
Whilst I felt a bit used in this, I do recognise that most of that 5x premium was due to Accenture's brand, nothing to do with my skills or experience.
Of course, this is an excellent example of why the British government should do more of what it keeps saying it will, and what the contractors' and small businesses' representative bodies keep arguing for: use smaller businesses or individual contractors for jobs that can readily be done on those scales, and consequently have far less red tape, pay far less money, and probably get results at least as good as anything you'll get from a professional government sponge-soaker like the big consultancies.
It's about time governments stopped using big name consultancies primarily because of their name rather than any measurable benefit, and paying (apparently) a 400% premium for the privilege. That money comes from taxpayers and doesn't even go to the skilled people actually doing the useful work.
This probably ranks alongside laughing at anyone who defends excessive compensation and bonuses for for senior management, investment banking staff, and the like, on the basis that they need to pay competitive salaries, all while those staff are actually making decisions that result in huge losses to their employers. It is never necessary to pay the market rate for incompetence.
It's about time governments stopped using big name consultancies primarily because of their name rather than any measurable benefit, and paying (apparently) a 400% premium for the privilege. That money comes from taxpayers and doesn't even go to the skilled people actually doing the useful work.
This probably ranks alongside laughing at anyone who defends excessive compensation and bonuses for for senior management, investment banking staff, and the like, on the basis that they need to pay competitive salaries, all while those staff are actually making decisions that result in huge losses to their employers. It is never necessary to pay the market rate for incompetence.
True. But for a lot of people they don't want to manage the additional overhead. Sure at £400/day could roughly equate to £100,000/yr but that's as optimistic as you can get (assuming you work 5 days a week and only take two weeks off a year). The reality could be much less if you take into account sick days and days you just were not able to sell. Some people would rather just have a sure bet even if its much less than they could potentially take home if they were on their own.
Job security? Don't want to do sales? Comfort?
>> She's not on a £2k/day salary, that's just the rate paid to Capita
So it's alright because there's a middle-man taking a cut too?
So it's alright because there's a middle-man taking a cut too?
£2k a day is a loss-leader for Capita who are in it for the contacts.
Dunno why you're being downvoted. That could well be the case. Back in my Accenture days, I recall senior managers going for over £2k a day, and that was 10 years ago. This is a very high-level executive, who can jump into the CIO role like this... they could well be paid more than £2k a day of net pay! (by Capita, not by the government)
Looks like a perfectly fair consulting rate for someone with the skill to be CIO of a large organization.
Do we really have to re-explain the difference between short-term costs of things like rentals and long-term costs of things like employees?
This lady is a rental. You need a rental to give you breathing room to find an employee. Very sorry, but there's nothing much to see here. This is just attention-seeking.
This lady is a rental. You need a rental to give you breathing room to find an employee. Very sorry, but there's nothing much to see here. This is just attention-seeking.
So what's more expensive, hiring an expert at $4k/day who by herself in one month can accomplish what an entire team of complacent government employees probably can't in three years or keeping around a staff of employees who for the most part probably are grossly under-qualified to perform this kind of work?
This article reeks of a lazy financial assessment of this investment (ie, person A is really expensive in dollar terms so we should be appalled that the government laid off person B who was paid 1/100 of this sum).
This article reeks of a lazy financial assessment of this investment (ie, person A is really expensive in dollar terms so we should be appalled that the government laid off person B who was paid 1/100 of this sum).
It sounds like for the 2000 quid a day she's building systems that will replace the jobs of thousands of civil servants.
If this is true then the real outrage here is that it's a pretty good investment.
If this is true then the real outrage here is that it's a pretty good investment.