Hay McBer management consultants, which is helping ministers to develop performance-

related pay, confirmed this week it had not had to compete against other firms for the work. Hay’s involvement is said to be worth at least pound;3m, with the project leader charging pound;2,500 a day - figures the company would not confirm.

Lex Melzer, communications manager for Hay McBer, said the firm had been given the contract because it carried out similar work two years ago devising the leadership programme for serving heads. The initial work had been put out to open tender.

The company was backed by the Department for Education and Employment. “This work did not need to be competitively tendered,” said a spokesman. “There was already a contract in place.”

“We regard this as a major issue,” said Liberal Democrat education spokesman Phil Willis, who has tabled a parliamentary question to try to discover how many more contracts have been awarded without competition. Earlier this year ministers admitted that the Government had spent pound;8m on educational consultants since coming to power.

Theresa May, shadow education secretary, said she would also be asking questions in the House, adding: “I find it strange that a company has not had to tender for a contract like that.”

The TES has discovered that more than pound;1m has been spent hiring consultants, at around pound;1,000 a day, to shake up failing education authorities.

Most of the cash has gone to consultants KPMG, sent into Liverpool and the London borough of Hackney - with the Department for Education and Employment picking up most of the bill.

PriceWaterhouseCoopers received pound;260,000 for its work in Islington, and the Office for Public Management was paid pound;100,000 for preparing a list of recommendations to form the basis of an LEA action plan in the City of Leicester.

In all four failing authorities bar Hackney, the council has had to pay a share of the cost of consultants. Liverpool and Islington paid a quarter of the bill, and Leicester City 40 per cent.

The disclosure of the cost of consultancy comes as schools minister Estelle Morris this week predicted private companies would be sent into a further 15 local education authorities - taking the total of failing councils to 19 out of 150.

So far consultants have recommended that only Hackney’s school improvement service be handed over to a private company.

Decisions on the fate of services in Liverpool and Islington are expected next month but already Liverpool heads are urging a stay of execution for the authority.

The Liverpool Association of Secondary Heads wants the council, which has appointed a new education director and chief executive, to be put on a year’s probation.

John Smartt, head of King David school and chair of LASH, said: “We feel these people should be given the chance.”

Bob Clark, the education director from Wigan who was sent in to take charge temporarily of Liverpool, said there was now a real sense of optimism among heads.

But both heads and Mr Clark were sure that without the Government’s intervention, the city would have struggled to survive.

FE consultancy, FE Focus