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Covid Track And Trace – BCG Fees And BCG Pay Are Not The Same Thing

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The Guardian treats us to the money porn horror that consultants are being paid £7,000 a day and more to help out with the coronavirus track and trade system. Which would be nice work if you could get it to be sure but it’s not actually what is happening. Rather, consultants are being charged out at that rate.

Management consultants are being paid as much as £6,250 a day to work on the British government’s struggling coronavirus testing system, sources have confirmed.

No, they’re not, really, they’re not.

Individual consultants from the firm could earn £2,400 a day; the most senior consultants up to £7,360, sources confirmed.

Nonsense.

What is happening is that BCG is charging the government those rates – £2,400 a day, £7,000 and change a day – for the people who are working on the projects. That might be a good number, might be a bad one, but that’s what is happening – the company is charging the government that.

Out of that sum the offices that BCG works from are paid for. The holiday pay, pensions and so on of the workers. All the people who work in the firm who are not in fact consultants – all that internal management and support. What the consultants themselves actually get paid will be some fraction of that charging amount.

To switch examples. Back when I did write for The Guardian I would get £85 for a piece online only at Comment is Free. The Guardian makes some amount of money from the existence of that piece on The Guardian website. Out of the revenue gained there The Guardian pays for the management team, the editorial hierarchy, the code monkeys who put it online, the bandwidth charges and on and on.

My pay is some rather smaller number than the revenue. Because this is the way that business works, there are overheads, costs, to running a business. Which have to be paid out of the revenue coming in. OK, sure, given The G’s tradition of losses maybe not the finest example but still, the general bones of the argument should be visible. The revenue from a piece of labour is not the same as the lay to that labour because overheads etc. And all that before we even get to the expropriation of the value added by labour…..

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4 COMMENTS

  1. Hm. Seems like pendantry to me. Track & Trace is a mess so the government has spunked £10M on consultants to maybe sort it out. It probably shouldn’t have cost £10M in total in the first place let alone then throw more money down the drain but that’s because the public sector (and those that infest it) has no idea of the value of things.

    So I think stating the fees as individual pay makes sense to people. That they are “being paid more a day than I do in a week” resonates with people who then understand how shockingly badly their tax money is used. Although for the “readers” of the Graudian it’ll not be the takeaway – more like evil Tory bastards take money from sick babies to give to their mates.

  2. There’s also the fact that that payment has to cover when the consultants don’t have any work. If they only get consultancy on Monday and Tuesday they still have to eat on Wednesday and Thursday. So the product price is built to reflect that.

    • You can hire contractors who have to pay for their own holidays, sickness, lack of work, pensions and so forth. For a software developer that’s in the range of around £350-700/day + 25% agency fee) depending on skill, experience and location. Business analysts cost no more than £500/day, even in London.

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