Doesn’t sound too far off of how much we’d charge for a project like that.
Since you haven’t said exactly what part has left you speechless, I’ll step up to defend the ad companies.
A big part of determining the cost for design or copywriting work is where it will be used. If it’s just a background design for a information pamphlet about a sub-brand of ear drops for dogs marketed only in Liverpool, the cost may be only a few hundred pounds.
This, OTOH, is the main logo for the entire organization, which will be used throughout the UK and possibly overseas on every poster, flyer, TV ad, pamphlet, letterhead and souvenir shopping bag they produce (the fact that it’s a government agency may have added to it). Forty thousand pounds (for one agency) is at the high end of what we’d charge, but isn’t really out of the ballpark.
As for the simplicity of the design, if their selection process is anything like ours, the designers probably came up with dozens of ideas. Usually, the client gives a general overview of what they want, after which the designers present them with a broad range of possible directions. The clients discuss which ones they like and dislike, giving more feedback on which avenues they want pursued. This goes back and forth several times, with almost all ideas ultimately being rejected or abandoned along the way. Basically, this means that the client has probably looked at lots of different designs (especially since they used two agencies), and of all those, they liked the circle idea the best.
That said, I have to agree that their choice sounds pretty unimpressive. Some possible explanations:
A. The UK Arts Council is made up of a bunch of uncreative stick-in-muds who actually think they’ve chosen something dynamic and exciting.
B. The UK Arts Council is a bunch of petty, quibbling bureaucrats who couldn’t agree on anything and wound up choosing this design as the lowest common denominator.
C. Someone on the UK Arts Council owed a favor to someone at one of the agencies.
Personally I think they should have held a logo competition open to all UK artists. They would have gotten thousands of design choices, raised awareness among the public of their work, and saved a hell of a lot of money.