?Considering the prevailing view is that management consultants don’t represent value for money , over promise and under deliver it is surprising they are so often used in the public sector. That is until you examine more closely the motives of those who engage them.
The impression given by consultants themselves is that they offer specialist skills and knowledge that the employing organisation lacks but needs. This most often comes about when an organisation is thinking of venturing into a new area of business or way of working and wants some help and advice. There have been a lot of opportunities in the public sector as austerity and government policy has pushed a transformation agenda. In local government the financial pressure has prompted some radical proposals around outsourcing services and making the best use of new technology - proposals that required big investments or were needed to deliver big savings. So it makes sense to get specialist help to put together the business case. Or does it?
There is an old joke that if you ask an accountant what two plus two makes they will reply , whatever you want it to make. Apply this to management consultancy, ask what’s our best option and the reply will be, the business case you think you want. This reflects the real but unspoken reasons local authorities use management consultants. The use of independent management consultants is to give legitimacy and credibility to the recommendations that will endorse the proposal that the leader and cabinet always preferred. I know this sounds cynical but it’s because local government is a political environment and decisions are not just based on money. They’re influenced by values, beliefs, choices and the views of voters.
One authority produced a strong business case supported by a tenants survey for transferring their housing stock to a housing association. A nearby authority conducted the same exercise with different management consultants and produced a report for retaining their housing stock. The main difference between these two authories was the ideological preferences of the respective leaders and the trust or lack of it that tenants had in their current landlord.
Sometimes it’s not so much expertise that the local authority lacks – it’s the capacity to undertake a major consultation or pierce of research.
I was asked to join an officers’ panel to recommend which of three shortlisted bidders should be awarded a not insignificant research contract. The three organisations bidding were asked to make a presentation to the panel on how they would go about this research in view of the size and diversity of the authority. It came down to two organisations. The first was a local university based group who gave a clear account of how they would go about the tasks, the challenges they anticipated and how they intended to overcome them. They also made it clear that the two people presenting would be the people undertaking the work and that this would be their sole focus during the period of the research. I was impressed.
The second group was a high profile national organisation who were politically connected and had undertaken work for several local authorities - although none of the size, diversity and characteristics of this authority. They started their presentation by saying they had not prepared a presentation as they thought we would be better asking them questions about the work they had done for other authorities. I was shocked. They clearly thought that the contract was in the bag. They made several references to their political contacts and claimed inside knowledge of the Government’s thinking.
When it came to the discussion about which organisation to recommend, the chair of the panel was surprisingly enthusiastic about the second presentation, whilst my colleague and I expressed concern about their attitude to the process. My concern was that in contrast to the first group they would be difficult to manage as they would give us what they thought we should have rather than what we requested or wanted. The chair then tried to influence us by saying he knew the leader was keen on the second group because of their political connections which could be very useful to the authority. I didn’t find this a convincing argument, so the chair agreed to reflect our discussion in making a recommendation to the leader and cabinet.
The next thing I heard was the contract had been awarded to the national organisation!
So independence and credibility are not the only factors in deciding to use management consultants. Often it’s a lack of in-house capacity, and sometimes it’s something extra they offer such as inside knowledge and useful connections.
Blair McPherson is a former director, and an author and blogger www.blairmcpherson.co.uk