In 2022, the global accounting and consultancy firm EY unveiled plans to split its business in two and float its consulting arm on the stock market.
In the end it proved impossible, as the 13,500 partners that own the firm could not agree how to divide up its assets and potential liabilities, including pensions. The dominant US arm of the firm decided not to proceed and Project Everest came to a halt. But not before the consulting business was valued at $100 billion.
The 116 partners in EY Ireland would have shared in this pay-day – but they are not exactly feeling the pinch without it. The Irish firm turned over €727 million in the financial year to June 2024. The bulk of its revenue came from non-audit services. Audit is the traditional business of accounting firms but now represents only 27 per cent of EY Ireland’s turnover, with the balance of €529 million coming from non-audit services, presumably consultancy.
Somewhere in that figure is the €514,000 that Transport Infrastructure Ireland (TII) paid EY for advice on how it can best deliver the €9.5 billion MetroLink and other infrastructure projects over the next decade. To date, it has received two reports totalling 33 pages, and a third report of about 100 pages is in the works.
It’s a mistake to judge a book by its cover, and equally to judge a consultant’s report by its size. But before getting into that it is worth interrogating the reason TII sought the report.
The State agency was created by the merger of the National Roads Authority (NRA) and the Railway Procurement Agency (RPA), and is responsible for delivering large road and rail projects under the National Development Plan. There are a number of these in the pipeline, of which MetroLink is the biggest.
Given the step-up in terms of size and complexity involved in MetroLink, the idea that TII would stop and ask itself whether it was properly organised for such a mammoth task is entirely sensible.
No one who claims to have an interest in how taxpayer money is spent should question this decision. This is particularly true of a politician who has railed against the cost overruns at the national children’s hospital project with the enthusiasm displayed by Catherine Murphy, whose Dáil question unearthed the details of the EY contract with TII.
As Murphy knows, the only in-depth analysis of the national children’s hospital – which was carried out by another consultancy firm, PwC – concluded that the Government did not have the skills or experience required to deliver a project of such scale and complexity. It highlighted numerous mistakes, the farthest reaching of which was to start the project before all the cost were tied down.
Unsurprisingly, the national children’s hospital hospital is one of three case studies in the EY report, along with the Crossrail project in London and the Sydney Metro, both of which suffered delays.
Equally unsurprising was that EY identified gaps in TII’s capabilities that would hamper its ability to deliver on the various projects currently in its in-tray. They warned these gaps are already starting to affect the delivery of MetroLink. Not addressing them “would be to risk the successful delivery of the project”.
EY identified leadership and expert roles that need to be filled at TII to address the problem. To date, approval has been received to recruit four of the 18, according to the report.
EY may have produced only 33 pages so far but, in truth, their work actually boils down to this one important sentence: MetroLink is already in trouble and if skill deficits at TII are not addressed, overruns and delays are inevitable.
The cost of not addressing the problems at TII is likely to dwarf the €514,000 that EY has charged them, but that is not to say that fee represents good value for money. It is presumably the market price, as TII followed public procurement guidelines.
The issue of whether consultancy firms such as EY and its rivals represent value for money is complex. Critics of the consultancy model argue that over the past 50 years or so large organisations, businesses and governments have outsourced so much work to consultancy firms in the name of “efficiency” as dictated by the precepts of neoliberal economics that they have lost the ability to think for themselves.
Not only that, but they have become utterly dependent on consultants and the consultancy model. What started out as fairly niche area of engineering advice in the 1920s has ballooned into a trillion dollar business that – according to two economists at University College London, Mariana Mazzucato and Rosie Collington, authors of The Big Con – weakens business, disables governments and threatens democracy.
The actual value that consultants deliver is debatable, according to the authors, but what is not in dispute is that they are in a position to charge an awful lot of money. It doesn’t mean they are wrong.