Jim Armitage: Inquiries should engage brain before engaging advisers

When KPMG’s name appeared as an adviser to the Grenfell Inquiry, it was one of those moments when you say: “You are kidding, right?”

Anyone who had last year looked at the organisations associated with the tragic blaze could not fail to notice that KPMG’s name kept popping up as auditor.

And when you added up the sums of money it had made from these clients over the years, the numbers quickly became mindboggling.

So how on earth could the Cabinet Office be so crass as to hand the firm hundreds of thousands of pounds more to help investigate those same people?

Though this was never a conflict of interest issue — the nature of the contract meant KPMG could not influence the substance of the investigation — it was distasteful in the extreme. Particularly when there was so much concern in the community that any inquiry would be an establishment stitch-up.

That the appointment was made without full competition just added to the bad smell. Especially as there are so many other consultancies and law firms capable of doing such work.

When the Evening Standard first started asking questions, it looked like inquiry officials would stick to their guns. Yes, they said, we knew KPMG was auditor to Rydon — the prime contractors on the tower refurbishment — and, yes, we knew it also did Kensington & Chelsea. But we ensured there would be no conflict of interest.

However, when this paper pointed out that the third major organisation involved — the maker of the tower’s insulation — was also a KPMG client, it seemed winded. A long pause ensued before the response came: Erm, no. We were not made aware of that.

Tut, tut, KPMG. From that moment on, its days seemed numbered.

Ideally, the inquiry would have corrected its mistake as soon as we highlighted it. In the end, it took a petition of politicians and pop stars to make it think again.

So, what should officials learn from this fiasco? First, we must rethink the grip the Big Four accountants have on the public sector. They moved into local government in force after Eric Pickles scrapped the Audit Commission in 2010. Like it or loathe it, the commission’s abolition (which came after much lobbying from the Big Four firms) makes it ever more important that audit and consultancy work should never go to the same firms.

Second, the inquiry must learn to be far more scrupulous about its processes.

Although its haste in hiring an adviser is understandable given the pressure it was under to establish itself quickly, it clearly acted without thinking how its actions would be perceived by the public. Cutting corners rarely makes for good outcomes.