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Public sector managers want more consulting spend, says Source

Department for Transport

London: European public sector managers want to spend more on consultants but can't, according to a study by specialist research group Source Information Services, published today.

Source's findings will add fuel to political fire in the UK, where government limits on the use of consultants and external auditors at the Department for Transport has been blamed for the West Coast Mainline rail franchise fiasco.

The study of 450 public sector managers in the UK, France and Germany found that on average, only a small proportion (14 per cent) of buyers feel that they use consultants too much. The remaining 86 per cent either feel that their organisation's use is about right, or even want to use them more.

However, in-depth interviews by Source revealed that in reality the use of consultants is restricted by a number of factors including government policy, cost-constraints and political sensitivity. One senior manager in France told Source, "I think consultants can add enormous value but there are huge pressures on the country at the moment and the threat of strikes hangs over us. It's hard to justify bringing in consultants in such circumstances."

Validating important decisions...

Although the greatest use of consultants in the public sector is about getting access to specialist skills not available in-house, the report found evidence of strong demand for the use of consulting firms (and specifically their brand) in the validation of internal decisions. Here, the report says, the public sector is only very slightly behind the private sector (14 per cent instead of 15 per cent of all work), despite it seeming reasonable to assume that the former would have considerable difficulty justifying this kind of use. In fact, nearly one in five managers in the public sector thinks they should be making more use of consultants for validation purposes.

Edward Haigh from Source Information Services, commented, "Once again, the idea of intellectually isolated senior managers, set within the context of a risk-averse public environment, probably goes some way to explaining this.

"There are, however, two important additional dimensions to this in the public sector. The first is about senior managers genuinely wanting to know if they are right. The other is about accountability. There are many more people to answer to if things go wrong in the public sector than there are elsewhere. Whether out of a sense of duty to tax payers or because of the fear of what might happen to them if things go wrong, managers simply want to get it right."

Across all areas of expenditure the majority of public sector managers are comfortable with their current levels of expenditure, although it's important to bear in mind that those levels have, in many cases, already fallen significantly over recent years.

Where there is greatest disagreement is around the use of consultants to provide additional capacity at particularly busy times. Here only slightly more than half the people surveyed were comfortable with their levels of usage. 16 per cent considered their use to be too great but nearly a third thought they should actually be using consultants more to plug gaps.

Future expenditure

Asked how, in spite of the extent to which they're comfortable with current levels of expenditure, public sector managers thought the amount they use consultants would actually change for each type of use over the next 12 months, the number saying it will decrease is roughly double the number who think it will increase.

The UK market for management consultants remains very challenging with forecasts — averaged across all types of expenditure — finding that around four times as many people expect spend to decrease, as those expecting it to increase. In contrast, in Germany as many people expect an increase as expect a decrease.

UK procurement has a tighter grip over choice and the purse strings...

There are also some broad differences from one country to the next in terms of the levels of freedom public sector managers have. The contrast between different types of freedom is greatest in Germany where clients appear to have a lot of freedom to choose the consulting firm they want to work with but are considerably more restricted in terms of the amount they can spend with that firm.

In France, a third of respondents said they enjoyed complete freedom where their choice of consulting firm was concerned, and almost half said they had either complete freedom or some freedom in terms of the amount they wanted to spend.

In contrast, UK public sector managers were the least able to choose the firm they wanted to work with but while the number saying they had complete freedom in terms of what they spent was lower than anywhere else, a large number said that they had at least some freedom.

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