In a recent survey by the Management Consultancies Association only 13 per cent of member companies reported that government departments had improved their understanding of the difference between management consultants/contractors and interim managers since the National Audit Office last reported on this topic in 2006.
This is a disappointing result, but perhaps not a surprise when most public discussion of consultancy continues to muddle the two. Recent press stories about the expensive role of ‘consultants’ in the public sector have normally been about interims or temporary staff.
This blurring of the line between consultancy and staff substitution creates frustration within both government and the consulting industry, and is short-changing the taxpayer. It is true that each can provide real value when used appropriately; problems arise when there is a lack of clear thinking about the different roles that each should play. Too much money has been spent using temporary staff when a shorter and more productive consultancy project was what was really needed.
A recent MCA report, 21st Century Government, suggests that central government spent around £640m in 2009 on genuine management consultancy, generating benefits to clients worth in excess of £3bn. By contrast, nearly £1.3bn was spent on temporary staff, contractors and interim managers, many of them employed at an inflated rate to do work that could be carried out by full-time employees.
Contractors and interim managers can provide a useful stop-gap when an organisation is finding it difficult to recruit full-time staff. Their focus is primarily on running a function or a team, rather than achieving a specific outcome.
Management consultants, by contrast, are better used on projects where speed of delivery is important and where it would not be cost-effective to hire in the expertise involved on a permanent basis. They are driven by the need to secure results and can provide challenge and independence as well. They transfer skills and knowledge into their client organisations. Consultants also bring the oversight and quality control that comes with working for a consulting firm, expressed, for instance, through the code of practice adopted by all MCA member companies.
A Treasury-sponsored report in 2009 celebrated the UK’s management consulting industry as a ‘world leader’. The government will want to make good use of its services if they are to achieve the changes and savings that the programme to reduce the deficit implies. A good start will be to draw a far clearer distinction between management consulting and the work done by contractors, temporary staff and interim managers.
Alan Leaman is chief executive of the Management Consultancies Association. 21st Century Government is available at www.mca.org.uk
