It's good news that growth has returned to the public sector consultancy market. Outside advice can be vital to public bodies as they try to make savings while improving services
Data released by the Management Consultancies Association this week suggest that the dramatic falls in public sector spending on consultancy may have come to an end.
Apart from local government, fee income figures for 2012 show small increases in spending throughout the sector – though from a much reduced base.
Part of this reflects the natural shift from policy-making to the implementation of change. But it is also clear that consulting firms are now helping public sector organisations to generate cashable savings while providing enhanced service to the public.
The health sector, for instance, while required to make savings, is also engaged in significant restructuring, facing rising expectations from patients and looking for the right strategic investments.
The public sector often gets a bad press but, as the recent MCA Awards winners all showed, it can use its access to consulting services to deliver step-changes in performance – raising quality while also making savings.
One trend immediately stands out from the data. The ministerial cri de coeur that more public sector business should be opened up to smaller companies appears to have had an effect - even though the vast majority of consulting takes place well away from central government.
The UK consulting industry boasts a number of specialist consultancies that are outstanding in their field. Some of them – despite all the procurement difficulties and the costs of bidding - have devoted themselves to assisting public sector organisations to reach their goals. They are achieving impressive growth rates as well as superb outcomes for their clients.
Recent years have also seen some significant enhancements in the public sector’s buying of consulting. Austerity has focused minds. The quality of business cases is improving, more effort is made to check whether projects can be carried out in-house and consultancies are often being deployed in a more strategic way.
The arrival of the new ConsultancyONE procurement framework should also herald improvements. Its lengthy gestation has frustrated many consulting providers and buyers, but it has now gone ‘live’. Provided that the public sector gets behind it, and that it is effectively monitored and overseen, ConsultancyONE should ensure that there is far better tracking of the value that is generated through consulting work – and that lessons learnt are widely shared.
The penalty of not engaging outside support and advice was vividly demonstrated in the West Coast rail franchise fiasco. The benefits of doing so should now be more transparent and accessible.
Alan Leaman is Chief Executive of the Management Consultancies Association
