KPMG wins UK government contracts despite withdrawing from tenders following scandals
KPMG has won millions of dollars in UK government contracts since it pledged to temporarily suspend tenders for public sector work after being threatened with a ban over its involvement in a series of corporate scandals.
Consultancy Big Four has won 22 UK public sector contracts worth £10m
The largest of these is an estimated £3million share of a £21million contract awarded by NHS England.
In addition, KPMG has been awarded contracts worth up to £3.2m to advise four government departments including the Ministry of Defense and the Department for Environment, Food and Rural Affairs, according to Tussell, which pursues government contracts. The energy regulator Ofgem has also commissioned the company.
KPMG said it had reached an agreement with the Cabinet Office to “proceed with tenders already in progress or new work where it is in the public interest to do so”. It added: “The very small number of contracts that have been awarded to us since then fall into this category.”
The contracts included “vital work with NHS England,” it said. Some of the contracts were not awarded by the central government and were therefore “outside of agreement with the Cabinet Office,” said a person briefed on the matter.
Since KPMG agreed to halt bids for new government work, regulators have ordered the company and its partners to pay $4.8 million in fines and costs.
In January it admitted to having misled Financial Reporting Council inspectors during checks on its audit by Carillion. The following month it vowed to defend a £1.3bn lawsuit brought by Carillion’s insolvency practitioners, alleging the auditor had missed “red flags”, that the UK outsourcer’s accounts were misrepresented and that the group was more had been insolvent for more than two years prior to its collapse.
Despite the legal and regulatory woes, KPMG’s UK partners received an average of £688,000 last year, the highest payout since 2014.
The Cabinet Office said it was continuing to monitor the situation and that the review of KPMG was “ongoing”.
“KPMG has been awarded a small number of engagements in very limited circumstances, such as continuing important projects that were already underway,” the Cabinet Office said.
KPMG’s state audit followed the £13million fine the company was fined by an industry court in August for serious misconduct when it forced bed maker Silentnight into bankruptcy to help a private equity firm leave the company without to buy the burden of its pension liabilities.
The consulting firm was recognized by the FRC last year for its “unacceptable” failure to improve its bank exams for the third straight year. The watchdog continues to investigate KPMG’s work for Rolls-Royce and Eddie Stobart Logistics and Carillion.
KPMG, which employs 16,000 people in the UK and is one of the government’s largest advisers, has already been blocked from applying to run training courses for civil service apprentices after an Ofsted report found an existing scheme “inadequate”. had the lowest possible score.
A total ban on public procurement tenders is rare. Security firm G4S was temporarily banned in 2013 after it accused the government of electronically tagging criminals, some of whom were dead or still in prison.
Deloitte stopped bidding for public works for six months in 2016 after a leaked note in which its advisers criticized the government.