09/21/2011 05:56 EDT | Updated 11/21/2011 05:12 EST

Federal Spending Cuts: Ottawa Hires Outside Consultant Grant Westcott For Key Program In Strategic Cuts Plan

Flickr: Diego3336

OTTAWA - The Harper government hired an outside consultant to manage a key downsizing project even as it fended off criticism of a $90,000-a-day contract to another consulting firm.

On Wednesday, the prime minister announced Grant Westcott, an independent management consultant, has been hired to run Shared Services Canada, a new agency that will consolidate 308 far-flung data centres into just 20.

Westcott has worked for Effingham Technology Management since 2009, and was previously an executive vice-president for technology with the Canadian Imperial Bank of Commerce.

Shared Services Canada was created in August on the recommendation of PriceWaterhouseCoopers, a consulting firm that was paid $2.5 million for its advice. The firm warned that the project has significant risks, and will require investments of up to $300 million.

The data-centre project is a key element of the government's ambitious plan to balance the books by 2014 by chopping $4 billion from the annual budget, or about five per cent of the $80 billion earmarked for operations.

The Tories came under fire this week when The Canadian Press reported the government had hired Deloitte Inc. in August on a $19.8-million contract that runs until March 31.

The company will advise ministers and senior officials on the cutting exercise, which begins in earnest Oct. 3 when more than five dozen departments and agencies must present a cabinet sub-committee with two scenarios, one for a five per cent budget chop, the other for 10 per cent.

Liberal MP Scott Brison said that when he was in cabinet in charge of Public Works, major cost-cutting was managed by ministers, not consultants.

"We were able to accomplish that and we didn't need to spend that kind of money on exterior consultants," he said.

"The reality is the Conservatives have increased spending on consultants by $3 billion per year since taking office.

"And this one is just particularly ludicrous because they're hiring consultants at $90,000 per day to tell them how to reduce the cost of government. So it's particularly obscene."

But Finance Minister Jim Flaherty, who plans to incorporate the cost-cutting plan shepherded by Deloitte into his spring budget, defended the use of consultants, saying government needs an outside perspective.

"We shouldn't do it ourselves, solely," Flaherty told the House of Commons.

"We should get advice and expertise from the private sector. The cost, for every $1 of spending on experts we expect $200 of savings, which is a pretty good deal."

Liberal Leader Bob Rae suggested one measure to reduce government spending: "I would like to ask the minister of finance, what does he think the chances are that the $20-million consultants just hired will come back and say, 'Do you know what is a good way to save money? Cut the use of consultants'."

A Toronto-based spokeswoman for Deloitte Inc. declined to comment on the specifics of the contract, including the number of staff involved or their home offices.

"We are very pleased to have been awarded this contract through a competitive tender process," Jeanne d'Arc Umurungi said in an email.

"As always, due to our code of conduct in relation with our client confidentiality, we are not allowed to give any information about our client mandates."