06 May 2005
Public bodies' use of private management consultants continued to expand rapidly in 2004, with payments to external advisers reaching £1.9bn, according to a new study.
But civil servants this week questioned the value to taxpayers of the government's huge outsourcing drive for advisory services.
A study published by the Management Consultancies Association on May 4 indicates that the public sector remains the fastest growing area of the management consultancy market, fuelled by outsourcing across local government and the National Health Service.
Public sector external consulting grew by 46% during 2004. Although that growth rate is lower than in 2003 (111%), the MCA reports it 'remains substantially higher than [growth] in the private sector.'
In contrast to 2003, however, the sharpest increases in outsourced consultancy work came from outside Whitehall.
According to the MCA, local government's 'extensive operational restructuring and outsourcing' requirements led council chief executives to spend £230m on external management expertise in 2004, compared with just £59m in 2003: growth of 289%.
Meanwhile, the NHS's national IT programme led health sector leaders to spend £85m on management fees last year, compared with £25m in 2003: growth of 235%.
However, central government's use of consultants remains the highest in spending terms. Whitehall spent more than £1bn on consultants last year, compared with £980m in 2003.
Across all UK public sector bodies, only the international agencies and European Commission-linked organisations spent less on management consultants last year than in 2003.
The government is increasingly keen to use external advisers in order to bring private sector expertise into Whitehall. But the Public and Commercial Services union, which represents 300,000 civil servants, said it opposed the widespread use of consultants because they often replaced or duplicated work that could be undertaken by existing staff.
A PCS spokesman also claimed that the government had been forced to employ expensive expertise because many departments had axed management staff as part of a target to reduce Whitehall costs by £40bn by 2008.
'Ministers have created a false economy. This trend [towards external advice] is likely to continue upwards as departments look to cut jobs, yet realise that crucial work still has to be done,' the PCS spokesman said.
'Consultants take up the slack but they are costly and we question the value for money that taxpayers get from this plethora of consultants at a time when the government wants to be more efficient.'
PFmay2005
