Government 'put pressure on ad agencies to work for free'

The government is putting pressure on advertising agencies to work on public sector marketing campaigns for free as part of its cost-cutting drive, according to the industry's trade body. Hamish Pringle, the director general of the Institute of Practitioners in Advertising (IPA), said several advertising agencies have been leant on by the government to continue to work on campaigns for nothing. Francis Maude, the minister in charge of the cabinet's efficiency drive, has frozen all but a few "essential" governmental ad campaigns co-ordinated by the Central Office of Information (COI). Pringle said that he felt compelled to speak out on behalf of the IPA's members – 40 of its ad agency members are on the COI's approved roster for handling work – who were too frightened to go public in case they were blackballed from the government's extremely lucrative contracts. "We know that at least two agencies have been leant on very heavily by the cabinet through the COI, to make concessions, in terms of remuneration, in a way we think is disproportionate and unjustified," he said. "Some are being asked to do additional work without being paid for it. So, if an agency has produced a campaign, they are asked to carry on with it, for no more money." Pringle said that the tactics went beyond the typical business practice of reviewing an advertising contract and attempting to drive down the remuneration, trying to whittle down the margin the agency makes off working on the account. "Now pressures are being placed on those agencies who had the idea, who own the intellectual property, to stand aside," he said, although added that he did not know of any agency to make any form of rebate, or repayment, back to the COI. "The crux of the matter is that these agencies have fought to get on the COI roster, it is a fantastic badge of honour," he said. "The pressures stem back to the formation of the coalition government in May and its attack on government advertising and marketing. My own belief is that we have been used as a stalking horse." He added: "We are not sitting here saying there don't need to be cuts in public spending but we object to the lack of credence that the cabinet has given to the quality of work done by agencies and the COI. We do absolutely think the UK needs to take a marketing approach to its problems, and that the creative industries are an important lubricant to the economy. If it makes cuts to the COI it should do so with regret. Instead, it's all been a waste of money." The COI spent £531m on all forms of marketing and communications in the year to the end of March, of which traditional ad spend, on media such as television, press and radio, was about £200m. A freeze was put on all bar essential government ad campaigns in June, pending the outcome of the Maude review, with areas including the armed forces, tax, revenue and some health and safety campaigns among those where advertising activity is continuing. • To contact the MediaGuardian news desk email [email protected] or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. • If you are writing a comment for publication, please mark clearly "for publication".