Next month the National Audit Office is due to produce a report on government use of management consultants. “Don’t hold your breath,” says Neil Glass. Glass, writing as David Craig, is a whistleblower. His book, Plundering the Public Sector, paints a uniformly bleak picture of consultant greed and government incompetence. Since 1997, he says, consultants have cost the taxpayer £70 billion with either zero or negative returns. He doesn’t expect much from the NAO report because the audit manager, the key figure, of the study is Ron SirDeshpande.

Accenture, one of the giant consultancy firms, employed SirDeshpande for almost eight years before he came to the NAO. For Glass, this means he’s just one of the gang and he won’t dare rock the cosy consultancy boat. A spokesman at the NAO sighs: “I know who you’ve been talking to. Ron SirDeshpande works full time for the NAO and his voice is independent.”

Glass snorts.

On September 28, Accenture pulled out of its £1.9 billion contract with the NHS. Connecting for Health (CfH), a huge computer system, was cutting into Accenture’s profits and threatening its balance sheet with up to $450m in write-offs. Launched in 2002 as a project lasting two years and nine months and costing £2.3 billion, CfH has become a 10-year project with a probable cost of £12.4 billion.

But insiders and IT professionals now agree that it cannot work. If the government pulls the plug now, only about £1.5 billion will have been lost. But will it? Dare it admit that its multi-billion-pound gamble on the power of the consultants has failed?

Meanwhile, despite the billions poured into the NHS, hospital trusts are still ending up in deficit. Teams of consultants are parachuted in and come to only one conclusion: cuts must be made. “Men in smart suits turn up,” says Dr Paul Miller, who was chairman of the (medical) Consultants Committee at the British Medical Association, “and tell doctors and managers what they know already and charge a fortune.”

Over at the Department for Work and Pensions, they took the advice of consultants and cut the number of high-street jobcentres. The idea was that people would go online or phone a call centre. They didn’t: they got violent, turning the remaining centres into “war zones”. More consultants were called in to sort out this problem. They suggested sweets and potted plants. The government now consults consultants about consultants.

“When these consultants come in and tell people they are doing everything wrong,” says Mark Serwotka, general secretary of the 300,000-strong Public and Commercial Services Union, “and they’ve got a licence to do it. It drives people to despair.”

Thanks to a succession of consultant-led disasters – the Child Support Agency, Swanwick air-traffic control, almost everything to do with the NHS but particularly the £12 billion computer, HM Revenue & Customs, the tax-credit system, Ministry of Defence equipment shortages – the almost universal, popular view of management consultants is that they are (a) incompetent, (b) greedy, and (c) ruthlessly willing to exploit the government’s managerial incompetence. They can even, according to some, cost lives. The MoD adopted consultancy theories about stockholding and, as a result, British soldiers found themselves without body armour in Basra. Furthermore, Glass insists, it was the “consultancy culture” that resulted in the privatisation of NHS cleaning contracts that was started by the Tories. This led to dirtier hospitals and some of the highest rates of MRSA, a frequently lethal infection, in the world.

But inside government, the line is that it’s all going very well and consultants are a necessary tool for modernising public administration. The official line on the whistleblower Glass is to cast doubt on his motives. “I’m sure he does very nicely because he’s in consultancy too,” says Fiona Czerniawska, director of the Management Consultancies Association (MCA). These are almost the same words used by departmental spokesmen. In fact, Glass works for a consultancy called the Best Practice Group, which advises clients how to avoid using consultants on anything like their present terms. And the truth is that it is his relentless – and largely unchallenged – critique that has provided devastating evidence supporting public anti-consultant feeling.

“I became a whistleblower because the industry has become sales-driven,” says Glass. “It’s a washing-powder sales operation where they have to think of a new product every year. They’re selling people things they don’t need.”

But what is really going on? Why is the government so enamoured of an industry that its electorate regards with contempt and mistrust and which seems to land it in
one disaster after another? The answer is, in detail, complicated but, in essence, simple. Government has gone mad. But sanity is in sight.

Lord Birt, with his bland, technocratic face and mangled “Birtspeak”, has provided the popular image of the management consultant since he became director-general of the BBC in 1992. He introduced internal market reforms based on ideas from the consultancy McKinsey. He did some good but left behind a smouldering mass of bitterness and a huge bill payable to the consultants. Ignoring what had been an at best ambiguous episode in the BBC’s history, Tony Blair gave Birt a job in Downing Street. His brief was “blue-skies thinking”, which meant he could upset any government department more or less at random. As he was also a part-time consultant with McKinsey, the clash of interest was glaring. But the problem didn’t seem to strike Blair.