Council to pay staggering £20MILLION... for advice on 'how to save money'

The deal follows the authority’s decision to raise council tax by 7.5 per cent in April, well above the five per cent national limit.

Newton was hired after Somerset’s 2023 reorganisation into a unitary authority failed to stabilise its finances.

The first phase of the contract costs £1.5million, with projections suggesting the total could reach £20million. This approach is being mirrored elsewhere.

Southampton city council, run by Labour, paid Newton £9million for “savings proposals” while preparing to receive £121.6million in Government support due to mounting debt.

The authority imposed the maximum 4.99 per cent council tax rise in April.

Birmingham city council, which has declared effective bankruptcy, has paid Newton £6.3million since 2023 for work in adult social care and children’s services.

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The Labour-run authority has also brought in KPMG and PwC to find budget reductions, while raising council tax by 7.5 per cent in April.

Conservative-led Croydon council, carrying a £98million deficit, paid Boston Consulting Group £1.6million for just 16 weeks of work in 2024, according to Freedom of Information disclosures.

Critics argue these spending decisions are fuelling taxpayer frustration.

Mike Caswell, a Conservative councillor in Somerset, called the costs “ridiculous”.

He said: “You can’t just magic £20million out of the air, it’s got to come from somewhere."

“If you bring in consultants, they’ll say: ‘What do you want to know?’ Then they’ll go away for six months, charge you £20million and tell you exactly what you wanted to hear. It’s a self-fulfilling prophecy. Taxes are going to have to go up.”

Peter Baillie, Conservative leader in Southampton, criticised Labour-run authorities.

He said: “There’s a culture of thinking it comes out of a magic pot. I think many Labour councillors do not feel it is public money that they have to spend to the best of their ability.”

In Birmingham, costs have mounted further, with £1.6million paid to Government-appointed commissioners since early 2024.

Robert Alden, leader of Birmingham’s Conservative group, said: “A lot of the money that is spent on consultants ends up producing plans for savings in areas that the opposition has already told them to do.

“Residents are rightly concerned to see the Labour council constantly trying to outsource the decisions they’re meant to be making. Spending money on a wish list for an administration that is going to lose control next year is just wasting taxpayers’ money.”

Newton Consulting markets its work as providing “evidence and insight” for “financial sustainability” using digital tools and artificial intelligence.

A spokesperson for Newton said the firm had a “track record of improving resident outcomes” and “actually delivering” identified savings.

The firm stressed its model “guarantees the delivery of the agreed outcomes, including financial benefits.”

Several councils insist the investments will pay off.

Southampton projects £23million of savings next year, claiming “over £90million in savings over four years as a result of our work with Newton.”

Croydon expects “over £60million of annual savings by 2029” alongside service improvements.

Birmingham said it “takes its duty to deliver value for money, a balanced budget and good services to residents extremely seriously.”

Newton added that all referenced contracts went through competitive tendering.