Public sector spending on consultants increased in 2005 by 23% over the previous year, hitting the £2.2 billion mark, according to the Management Consultancies Association (MCA), which represents 70% of the industry. Though the growth rate is slowing — it was 60% in 2004, from 114% in 2003 — the opportunities are undeniable.
“You go through periods when there are large contractual boosters in the marketplace, like the Inland Revenue Aspire contracts, but there aren’t many very large opportunities on the radar compared with the past two or three years,” says Alan Russell, director of consulting for LogicaCMG.
“It’s hard for the very large contracts, as there are only a relatively small number of companies to deliver them. But there are opportunities in the small to medium-sized contract areas.”
Peter Hyde, principal of Peter Hyde Management Consulting, based in Reading, says: “You have tremendous pressure towards cost reductions and increased efficiency, driven by the Comprehensive Spending Review and the Gershon report [an independent review of public sector efficiency]. That’s the No 1 driver of consultancy spend. But the government remains happy that consultancy represents a sensible investment in this context of needing to save money.”
Consultants with experience of working in the public sector often have an advantage, according to Roselyn Cason-Marcus, government services group recruitment manager for PA Consulting Group. “PA looks for individuals who have a public sector background because we’ve found that they have immediate empathy with the client culture. They also tend to have the technical expertise that we require to work with clients in extremely complex situations.
“Being politically astute — without being politically motivated — is really useful. Insider knowledge, combined with the ability to be objective and still look for ways to help clients, is vital.”
Consulting for big public institutions is not always plain sailing. In a controversial move, Accenture made an exit at the end of September from two regional contracts under the NHS National Programme for IT, a move that has served to highlight the myriad problems in outsourcing IT.
However, it’s not all bad news. Following a competitive tender, the Department of Health chose PA Consulting Group to work with the NHS to reduce waiting times for orthopaedic operations. During the 24-month assignment, PA worked in close teams with health professionals and clinicians to reduce the number of long waiters and help meet the government’s target.
“People who have worked in the public sector are invaluable because they have a good understanding of the procurement process in local and central government, and existing relationships,” says Mark Wyllie, Axon Global’s business unit director. “We’ve hired somebody who previously worked in a formative management group within the government, and he had a deep understanding of how the performance of different government bodies is measured. We knew how the executives we were selling to were ultimately measured and that gave us credibility.”
Competition among consultancies for work in the public sector has become tougher, says Russell. “We have to work harder to win any piece of work and harder to deliver it, and our clients’ expectations have increased over the years as well. If it was ever an easy industry, it is certainly demanding now.”
However, the rewards are increasingly worth the effort. “Seven or eight years ago, our firm would have been looked on as far too expensive to win any sizeable amount of work in the public sector,” says Rob Davies, director of Water for Fish. “But round about that time, people commissioning work there began to realise that you get what you pay for.”
Some consultancies that previously dealt solely with the private sector are now branching out. Catalise, for example, a London-based company with 20 permanently based employees, entered the public sector only this year. “The shape of public sector consultancy is changing and one of the growth areas is shared services, which is our strong area,” says Roy Barden, the firm’s director. “That’s why we are we getting involved.”
He predicts that areas of growth in public sector consulting will be the provision of back office services, finance, human resources and property management. Areas that could shrink include routine programme management and generic change management, which he believes will be done increasingly by contractors or existing staff.
Politically correct
NINE years as a Home Office civil servant, including stints as private secretary to Jack Straw and David Blunkett, the former home secretaries, prepared Jane Fowler to make the move into management consultancy.
“My last job was working in project management in the Immigration and Nationality Directorate but I wanted more flexibility over the amount of time I could spend on a specific project and wanted to apply my skills differently,” she says. “I was looking for fresh challenges but as I still wanted the public sector agenda, working for PA Consulting Group was the right combination of both.”
Making the crossover turned out to be easy, according to Fowler, who has a degree in politics from Newcastle. After “agonising” about it, she took independent advice on what her skills were, then sent off her CV to several consultancies, including PA in London.
“I was extremely impressed by the people I met there. They were enthusiastic about the sector they were working in and were very encouraging,” she says. “I applied elsewhere but part way through the interview process, I decided PA was right for me.”
Employees with a public sector background have a lot to offer clients when they return as a consultant, Fowler believes. “They understand the business, the challenges they are facing, the constraints they work under and the political side of things, which is really important when you are working on high-profile political issues.
Without this background, it takes longer to adjust.
“I know the pressures politicians are facing, the issues they’ve got to tackle and what they have to try to deliver. I also know that sometimes things change because ministers just change their minds, and you have to accept that.”
Along with increased job satisfaction, the money is better at PA and bonuses more “meaningful” than they were in the civil service, she says. “Sometimes the difference in what you’d do performance-wise was massive, but the difference in money was not much.
“Here, it feels more of a meritocracy. People are being promoted because they’ve done a good job and achieved something.”
