The lessons from an excess of consulting

Posted on

As the FT has reported:

Britain’s exit from the EU may be tumultuous but it has delivered a bonanza for consultants, with central government keen to hire their services.

Eight of the biggest firms — PwC, Deloitte, EY, KPMG, McKinsey, BCG, Bain and PA Consulting — enjoyed a 20 per cent increase in the value of work in the year to September 2019, according to Tussell, a data provider on government contracts. Spending on these firms rose by £77m to £464m last year.

I am not opposed, per se, to the use of consultants. Seeking alternative opinion is not wrong. And it should be paid for when required.

But there are big questions to ask about this spend. In particular this is because much of this total will be incurred for the purchase of what will, I am quite sure, be pretty mundane reports.

There are, of course, experts in the consulting firms.

And there are also considerable numbers of quite young consultants with little more than a Masters degree or MBA to guide them, and with no world experience beyond the consulting market to offer. Paying for boilerplate solutions, invariably based around the supposed market based solutions that are the standard fare of so-called management training, is an exercise in one of two things. The first is prevarication. And the second is delayed justification of an action already decided upon.

I hate to be cynical, but I simply doubt that many of these firms could add value to the scale of their fees.

And in the case of the Big 4 auditing firms we know that those fees do create conflicts of interest in the audit market which undermine any benefit choice might offer in that sector.

There are two morals from this. One is hire the real expertise. The other is that ministers, and others,  should learn to make up their minds. It is what they are paid to do.