Chancellor George Osborne's announcement about including the public in deciding where the public spending axe should fall is the latest chapter in an ongoing debate.
The new coalition government has one overriding objective: to reduce the cost of public services while continuing to improve their quality. It says it aims to 'deliver a step change in public sector productivity and value for money'.
The government will certainly require clear political leadership and strong support from a high-quality civil service. But it will also need access to the best skills and experience that are available outside government in the private sector.
A new report by the Management Consultancies Association, published next week, will help explain how this can be achieved.
As the report shows, the use of consulting by central government is driven primarily by the fact that specialist capabilities are not available within departments, particularly the sophisticated project and programme management skills that are needed to deliver complex and high-profile initiatives.
And why should they be? In a modern economy, it makes economic as well as practical sense to draw on outside expertise whenever it is cost-effective to do so; no organisation should or could use full-time staff to cover all their needs.
The use of management consultants by central government, however, remains controversial. The industry must therefore explain what consultancy does and how it adds value. It is particularly important to help policy-makers distinguish genuine consultancy from interim management or staff substitution. Confusion between the two is creating frustration within government and is short-changing the taxpayer.
The report also considers progress since the 2006 National Audit Office report on this subject. The results are mixed. We suggest a number of areas for further improvement. These include a much clearer focus on outcomes and the value that is delivered through engagement with consultancies.
The scope for innovative payment mechanisms has also been significantly constrained in the public sector. If changes are wanted here then there needs to be much more debate and discussion with the industry by procurement departments and others, and a better mutual understanding of how they can work and where they are most useful.
Many of the best and most radical approaches to public service provision originated in the consulting industry. Taxpayers deserve access to the best skills and knowledge that is available.
Alan Leaman is chief executive of the Management Consultancies Association
