Managing the consultants

24 Nov 11
Alan Leaman

The Cabinet Office’s new framework for buying in consultancy services is a significant step forward for taxpayers and the consulting industry alike – but there is still more to do.

In normal times the announcement of a new government procurement framework for management consultancy would be unlikely to set pulses racing.

But we don’t live in normal times, either for the consulting industry or the government.

Since the 2010 election, the coalition has introduced a series of controls on spending on consulting services, reinforcing the culture of austerity that now dominates Whitehall. Much to their relief, ministers have proved that they can regulate the scale and speed of expenditure; this played a large part in securing the immediate savings for 2010/11 that were announced shortly after the election. Recent Management Consultancies Association data suggests that spending on consulting has dropped by somewhere between a third and a half.

At the same time, and in parallel, a debate has been under way about how to change and improve the government’s use of consultancy. This is important in its own right, but also because consultancies should play a significant role in helping the government to reach its targets for deficit reduction and in securing improvements in public sector productivity and the quality of public services.

The MCA has pressed for reforms, largely supported by the National Audit Office in a recent report, which would put a far greater focus on providing maximum value for public sector clients. And many people in government see that they will need to get better value from consultancy as they grapple with a massive change agenda.

The result is the announcement by the Cabinet Office’s Efficiency and Reform Group this week of ConsultancyONE. It marks a significant step forward for both taxpayers and the consulting industry.

ConsultancyONE has put clear water between genuine consultancy and interim placements or other staff substitution. Confusion between the two has been a source of significant reputational damage for the consulting industry and has led to the government paying more than it should for many services. The new framework should end the buying of temporary labour which is then dressed up as consulting.

If things go according to plan, government buyers of consulting will also now have access to a far wider range of quality firms in the industry. The bidding process for smaller companies will be simpler and cheaper. Unnecessary and irrelevant criteria are being ditched. The number of places on each framework lot is being extended to create more competition and choice.

And the new arrangements will give government buyers every incentive to buy for value, rather than just for price. Improved specifications and clarity about desired outcomes will help both buyers and suppliers to provide maximum value through their engagement.

There will be more to do. The government should set out a clear statement of why and when it plans to use consultancy services. This will help instil the necessary confidence in ministers that their staff only work with consultancies when they really need to and in a way that will generate real value for the taxpayer.

And we should build proper evaluation and transfer of knowledge into all the government consulting projects. We should know not just how much is spent, but how much value has been created.

The public sector needs to provide better services with reduced resources. The consulting industry can play a vital role working alongside public sector clients. Ultimately, it is the public that will benefit the most from an improved and renewed partnership.

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