Emma Dolman
A wise move or a false economy? A pertinent yet deliberately controversial point, following the recent budget announcement outlining among other measures a 50% cut in consultancy spend.
On the surface, a neat solution to billowing spend, and one which shares support across the political divide. But is it really this simple? Have all the implications been considered?
I have been a civil servant in central government for almost 20 years, where I have observed Whitehall use of consultancy, and utilised them myself in a wide variety of roles within my own department.
In my experience, I would contend that consultancy spend when directed effectively can bring real benefits to how business is done across government. Conversely, horror stories abound from ill-conceived and ill-executed use of external consultants.
From a hard accounting perspective the case against the consultants is straightforward: negative examples abound from failed, dependent relationships, resulting in ratcheted up budgets, and huge outflows of money from the public sector to their private sector consultant counterparts.
In these situations, consultants are rewarded for their support in the delivery of over-spent and significantly delayed programmes with little or no skills transfer. No one could disagree with the need to root out these types of consultancy contracts, which are born and survive in a climate of dependency, along with those consultants who become just another pair of very expensive hands.
However, this is not the whole picture. My concern is that making such a radical cut in the budget will adversely impact on delivery at a time when making big efficiencies across government is upon us. Are we so confident that we can deliver these significant savings in-house?
I am currently on secondment at Ashridge Business School. Rather than depending on my own view, I have taken account of some of its research into the area. Ashridge research into the use of management consultants has looked at the matter both from the client and consultant perspective.
Clear goals and outputs
Findings indicate that there is a clear desire on both sides to get relationships right, starting with a solid understanding of why (formally and informally) consultants are being used. Next, there must be a clear brief, with tight and regular management, where both sides are focused on clear goals and outputs. Arrangements also need to be in place to ensure that, through joint working, knowledge is transferred and implementation achieved.
Both the client and the consultancy need to make available skilled staff, who can work closely together to deliver a tailored solution.
My own experience bears this out. Successful consultancy relies on a clarity of purpose and requirement, partnership-working, and tight control over activities and spend.
Recent research at Cranfield has also looked at the use of internal and external consultants within the public sector. Interestingly, this research finds that there is no common definition of 'consultant' and no common view on their roles. The research concludes that external consultants add particular value through engagement in more specialist areas, providing objective approaches, experience, good practice, and credibility.
The findings indicate that clear requirements and good communications are crucial, and that a combination of both external and internal consultants working together can be very powerful.
Management information
In 2006, the National Audit Office reported on the government's use of consultants and discovered that there was insufficient collection of management information, a lack of performance review with consultants, and a lack of relational management.
They introduced a tool kit to support future work, but most change programmes are based on relationships, which are hard to learn from a tool kit. More development and practice is essential to transfer skills to a much wider audience within government.
I believe, unequivocally, that a reduction in consultancy spend is essential. But, as with most things, the devil is in the detail. From leading and managing change programmes, I fully recognise the added value a short volley of "outside the box" thinking can bring.
My experience has shown me that choosing the right methodology for a change programme in discussion with an experienced consultant can often be the key to its successful delivery. Reducing spend full stop will quickly become a false economy, if in doing so we become unable to deliver effectively.
Emma Dolman is a visiting faculty member at Ashridge Business School and is a civil servant with nearly 20 years experience in central government
