The use of management consultants in the public sector has proved controversial and it is half the size of what it was in 2010. New figures show some return to growth, but the relationship would be helped by a better procurement process
Figures revealed this morning show that management consulting is growing. The report from the Management Consultancies Association shows that fee income for members grew by 8%. Assignments often involved supporting business expansion as economic growth returned. In short, consulting is growing by helping others grow.
This complements consulting’s record during the downturn. Then consultants supported enterprises in efforts to restructure and downsize. Consultants are invaluable in times of change.
If large private concerns, relentlessly focused on the bottom line, hire consultants to help seize business opportunities, it is unsurprising that the UK public sector needs them too. It is shrinking spend, while expanding in responsibility, necessitating higher productivity. It is a prime candidate for consulting support.
Public service consulting creates value. Consultants have improved customer segmentation in local government, mapped NHS patient pathways and promoted choice in long-term care.
Yet public sector consulting is controversial. Some see it as wasteful, suggesting a trade-off between consulting and, say, more doctors and nurses.
Yet doctors treat patients. They don't run the vast NHS. The choice for the health service is not between consultants and doctors. It's between keeping the strategists, change managers, and digital specialists it will always need on the books (expensive), or deploying consultants when required (efficient).
Public sector consulting contracted after the financial crisis and the coalition's deficit reduction strategy. Now, it is rising again. Though half the size of what it was in 2010 in real terms, public sector consulting grew by 3% in 2013, having grown by 5% in 2012. Central government consulting, the largest overall share, fell as a proportion, while there was a sharp rise in defence spend, and smaller rises in local government and health.
Consultants welcome this shift of focus towards frontline organisations, where they can really make a difference. But they would welcome even more a settled accord with government on the sustainable and value-generating role of advisory services.
MCA members continually engage with officials on these matters. There have been some improvements. But the failings of consulting procurement identified by the 2006 National Audit Office report persist. For every one of our members who points to more risk and reward contracts, several note the persistence of poor specifications and little use of small and medium-sized enterprises.
The MCA runs the Consultancy Buyers Forum. There, consultants meet those who purchase them. Its message is that as procurement gets closer to the strategic decision-makers who want consultants, better buying decisions are made. There are lessons here for the Crown Commercial Service. The CCS goal of cost reduction may be better realised through its reinvention as a shared service, working for departments, rather than as a centralised gate-keeper.
Our members understand frontline public service realities. As the General Election 2015 campaign heats up, the MCA Think Tank will focus on public services. We will gather consulting insights on health, education, digital and public service reform and ensure these contribute positively to the debate on how best to guarantee world-class public services as resources shrink.
Paul Connolly is director of the MCA Think Tank and author of today’s report UK Consulting Industry Statistics 2014
