The government's new framework for appointing public sector consultants could improve value-for-money for the taxpayer, and give public services a greater choice of suppliers
Like prisoners emerging from a lengthy period of captivity, blinking into the sunlight, the first successful consulting firms have just been told that they have won a place on the government’s new ConsultancyONE framework.
It has taken many months, but we are here at last. The final lots will be awarded towards the end of March.
ConsultancyONE is intended to be the primary route through which central government departments – and all other parts of the public sector, if they want – purchase consulting services in future. The Cabinet Office has hailed it as a ‘new single route.’
So, a big congratulations to all the winners, commiserations to those who didn’t make it and well done to the hard working officials who had to take this process though design, build and delivery. But now the bigger questions start. What difference will this new approach really make?
The first difference, and the one that everyone will notice, is that there are many more successful firms than in the past. The multi-specialism programme delivery list has twenty firms; previously similar lots had 6-8.
So buyers in government will have a greater choice of supplier and that is surely a good thing. The Management Consultancies Association has argued consistently that the market for public sector consulting services should be opened up to many more quality firms.
This is a very diverse and innovative industry. A longer list of suppliers will help the public sector to benefit from the wide range of choices that are available in the market-place.
Part of the story here is the onward march of smaller and specialist consulting firms. It made no sense for the public sector to deny itself the benefit of being able to engage such firms when it makes business sense.
The second difference, which should flow from the greater coherence and drive behind ConsultancyONE, will be an improved ability to monitor, chase and evaluate the government’s spending on consulting.
Government departments have too often been in the dark about what they are buying and why - and what the outcomes are. The result has been poor press coverage for both parties and a poorer return for the taxpayer.
Through the new MCA consultancy buyers' forum, UK consulting firms are working with their clients in the private sector to identify best practice in buying, delivering and then assessing the impact of consulting services. One area that the forum is exploring is the need to make a clear distinction between the value-adding role that consultancies play, and the separate provision of temporary or interim labour with which it is often confused.
Another is the move away from the old model of paying for consultant time – the famous day-rate - towards new ways of paying for outcomes and performance, and sharing risk.
For many in government this will be counter-cultural. The Cabinet Office release on ConsultancyONE crowed about bringing down day-rates. The real issue is increasing value. The public sector has some catching up to do – and ConsultancyONE should make that possible.
So, third, there is a potentially larger prize at stake. It remains only within touching distance, but, done well, ConsultancyONE could reset the entire relationship between the public sector and the consulting industry. In the past this has been strained. Frankly, both parties have had legitimate grounds for frustration and complaint.
But this new framework could signal a new start. A focus on engaging consultancies only when there is a clear business case for doing so and the need has been identified; selecting suppliers from a wider pool of quality firms; evaluating their performance and learning the lessons from each assignment: all these would enable everyone to move on.
Our research suggests that the average consulting project delivers benefits worth around £6 for every £1 spent in fees. We all know that the public sector faces massive challenges as it tries to reduce costs, raise productivity, improve services for the public and deliver better value for the taxpayer. Appropriate investment in consultancy services will help it meet those challenges.
Alan Leaman is chief executive of the Management Consultancies Association
