The firm’s fees were charged on a billed-time basis when it advised the government during the £585.1m sale of its 40 per cent stake in Eurostar to Patina Rail, a consortium made up of a Canadian investment fund and UK-based Hermes Infrastructure.

Reliance on external advisors

The Committee of Public Accounts (CPA) found the government relied heavily on external advisers and its investments arm 'needs to improve its understanding of the costs and value of this work'.

‘Will seek capped fees’

In response, the government confirmed that, where appropriate, it ‘will seek capped fees although this will be dependent on the detail of the individual project and the negotiated commercial contract between the government and advisory firms.’

The government added that: ‘It is also usual for firms to be required to ensure skills transfer to in house teams, wherever possible and practical, to reduce dependence on external resources in future assignments.’

‘Inefficient and problematic’

According to a report carried out by the National Audit Office last November, HM Treasury was 'concerned about the cost of the legal work and considered re-procuring the legal adviser during the sale process but it decided that a change of legal team midway through the process would have been inefficient and problematic due to the time-critical nature of the work.'

Sources: Legal Business; HM Treasury