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.
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The old adage that a consultant is someone who comes into your organisation, asks to see your watch and then tells you the time, is often true.
Like the creative arts, consultants can add value when they a) quickly ascertain the problem and assist with the solution or b) have the necessary experience, judgment and critical thinking to test their assumptions and can roll out solutions.
Experience suggests that consultants need to keep themselves in work and so are not in the business of providing succinct answers even where those are appropriate.
Personally I like the idea of the citizens assembly – why, because it exposes whoever is doing the explaining of their particular area to be considered and careful about the facts and estimates. With 100 or so people listening to an informed debate/presentations, should lead to better responses.
Lets see how the climate citizens assembly goes – methinks, it will come up with entirely sensible outcomes that will be buried…
They’re making out like bandits in the public sector since the IR35 changes a couple of years ago.
Before that you could get someone quite good for £500 a day, more or less depending on the area. Certainly a lot less than what you’d pay for a fairly junior level consultant from a big firm.
Plenty of these experienced individuals (probably mid-50s up) have left the scene. Not worth doing the work on PAYE.
The client often doesn’t have the resource (expertise or sometimes just the numbers) to do the work.
Happy days for these giant firms.
A sheep farmer is tending his flock when a city slicker rolls up in his BMW, hops out and asks, “Hey, if I tell you exactly how many sheep you have, can I take one?” The farmer nods, so the city slicker opens his laptop, calls up some satellite photos, runs some algorithms, and announces, “You have 1,432 sheep.”
Impressed, the farmer says, “You’re right. Go ahead and take one.” So the city slicker loads one of the animals into the backseat of the car. “Now,” says the farmer, “I’ll bet all my sheep against your car that I can tell you what you do for a living.”
A gaming sort, the city slicker says, “Sure.”
“You’re a management consultant,” says the farmer.
“Wow!” says the consultant. “How’d you know?”
“Well,” says the farmer, “you come from nowhere even though I never asked you to. You drive a flash car, and wear a smart suit. You told me something I already knew. And you don’t know anything about my business. Now give me back my dog.”
“there are also considerable numbers of quite young consultants”
That’s true of course but they will be doing the donkey work and at most be putting first drafts together. The big consultancy partners know it’s their money at risk so would review anything that was issued to a client. It would in any case be a foolish client who put any store in a report produced by a single person.
“The other is that ministers, and others, should learn to make up their minds. It is what they are paid to do.”
Somewhat harsh.
Few people claim to know everything and have all the answers and I would distrust anyone who did. If ministers never sought advice it would be worrying. Ministers are for sure paid to make decisions but they ought to make up their minds after learning as much as they can.
Time and again people tell me stories about the quality fo consulting reports from the Big 4
They can’t all be wrong…
I joined Big Gov in the early 70’s when there were no such things as Consultants (except in hospitals!)…but somehow we muddled along.
HM Customs and Excise was a very different beast in those days but the man who used to run a big chunk of it (‘London Port’ – which extended from Battersea out into North Sea/English Channel) had worked his way up from an Admin (clerk’s!) role in the Postroom, barring a break for the hostilities.
He was a very shrewd, bright and charming man. During his 40-odd years he’d done every job in the organisation and so, on walkabouts, could talk, knowledgeably, to anyone and everyone about how things were, and used to be! If he had a problem to solve he would call on his staff..and equally, if the Chancellor wanted to explore options, then he and the handful of other senior bod’s would be on hand to advise, because they’d ‘been there and done it’.
It’s ‘a civilisation that has gone with the wind’ of course, but from this end of the telescope I’m struggling to see what was wrong with a system which allowed staff to remain in, and grow in expertise about, an organisation and to be promoted through it on merit until blessed with ‘wisdom’, upon which others could, in their turn, call. All other arguments aside, it certainly didn’t cost an extra half a billion quid a year!
I recall that when Jackie Smith retired as Home Secretary she commented how she felt under-qualified for her Ministerial roles, adding “when I became home secretary, I’d never run a major organisation”
Should or would it be possible to provide that MPs should be obliged to demonstrate some ‘life skills’ or other expertise appropriate for the job certainly before they achieved ministerial office?
It also seems absurd that ministers may remain in post for only a short period before being moved out often before they have even fully understood the functions and ramifications of their department.
Another view is that either the Civil Service’s expertise is underused or it is unsuitable to be trusted with providing suitable advice: the rise of SPADS comes to mind
The SNP provide a model…
I’ve long suspected that one of the principal services offered by consultants is to protect managements from responsibility. The Board when faced with having made a disastrous (or sub-optimal) decision can claim in its defence that it took (expensive) advice which was thought to be the best available.
It’s like an insurance policy for directors and the company picks up the premium.
I know that is a generalisation and that some consultants are worth their weight.
Your opening comment is very true
They sell management insurance