Public sector consultants to cost £20bn under Labour
The bill for management consultancy within government is set to top £20bn over the lifetime of three parliaments, according to a former consultant who has carried out an extensive survey of public spending on external advice. David Craig, formerly of Capgemini, the consulting company, and the author of Plundering the Public Sector, estimates that total expenditure on outside expertise will be worth £70bn from 1997 to 2009. This larger number includes spending on implementing large information technology projects, such as Connecting for Health, the digitisation of NHS records.
The figures come amid mounting anger from backbench Labour MPs and the trade unions about what they see as the privatisation by stealth of the public services.
Management consultants are set to profit further from a renewed drive for efficiency in the civil service. Gordon Brown has ordered ministries to step up their efforts to cut administrative costs and reorganise their operations.
Mr Craig's projections are borne out by the latest figures from the Management Consultancies Association, which collects billing information from its members, who account for 70-80 per cent of the UK consulting industry.
The public sector spent £2.2bn on services from MCA members in 2005-06, encompassing advice on improving Whitehall efficiency but not necessarily all the contracted out functions of government, including IT and support administration, much of which is supplied by non-MCA members.
However, total spending on management consultants is hard to calculate precisely. There is no official total for the public sector as a whole or for central government. Individual Whitehall departments present figures in different ways or do not collect them at all.
It is also hard to differentiate between management consultancy, which the MCA defines as advice on business improvement, and other contracted services.
Even the MCA, which has the most complete figures on government spending, finds it hard to provide a clear picture.
"We just find it a nightmare to disaggregate management consultancy from other functions," said Fiona Czerniawska, who complied the MCA's figures.
Data issued by Whitehall departments in response to parliamentary questions imply that spending on consultancy is far lower than the £2.2bn figure (see table). This is because, according to the MCA, government de-partments account for only a quarter of consultancy spending.
Public sector bodies, such as the NHS, government agencies, the armed forces and local councils account for the rest, illustrating how widespread the use of external advice has become.
In Whitehall, the biggest departmental spenders on consulting services include the Department for Communities and Local Government, which disbursed £80m in 2004-05.
The Department for Work and Pensions, one of the few ministries that collects figures specifically on management consulting, spent at least £99m in 2004-05, almost £46m of which went to Capgemini. The Department of Health listed its spending as only £12.8m on consultancy services generally in 2004-05, although this figure is outstripped by NHS expenditures, which were not included.
Illustrating the difficulty in differentiating between types of consultancy, the Department for International Development spent £214m in 2003-4, most of which went to companies and non-governmental organisations engaged in delivering overseas aid and helping foreign governments.
http://www.ft.com/cms/s/f4829964-25b0-11db-a12e-0000779e2340.html
The figures come amid mounting anger from backbench Labour MPs and the trade unions about what they see as the privatisation by stealth of the public services.
Management consultants are set to profit further from a renewed drive for efficiency in the civil service. Gordon Brown has ordered ministries to step up their efforts to cut administrative costs and reorganise their operations.
Mr Craig's projections are borne out by the latest figures from the Management Consultancies Association, which collects billing information from its members, who account for 70-80 per cent of the UK consulting industry.
The public sector spent £2.2bn on services from MCA members in 2005-06, encompassing advice on improving Whitehall efficiency but not necessarily all the contracted out functions of government, including IT and support administration, much of which is supplied by non-MCA members.
However, total spending on management consultants is hard to calculate precisely. There is no official total for the public sector as a whole or for central government. Individual Whitehall departments present figures in different ways or do not collect them at all.
It is also hard to differentiate between management consultancy, which the MCA defines as advice on business improvement, and other contracted services.
Even the MCA, which has the most complete figures on government spending, finds it hard to provide a clear picture.
"We just find it a nightmare to disaggregate management consultancy from other functions," said Fiona Czerniawska, who complied the MCA's figures.
Data issued by Whitehall departments in response to parliamentary questions imply that spending on consultancy is far lower than the £2.2bn figure (see table). This is because, according to the MCA, government de-partments account for only a quarter of consultancy spending.
Public sector bodies, such as the NHS, government agencies, the armed forces and local councils account for the rest, illustrating how widespread the use of external advice has become.
In Whitehall, the biggest departmental spenders on consulting services include the Department for Communities and Local Government, which disbursed £80m in 2004-05.
The Department for Work and Pensions, one of the few ministries that collects figures specifically on management consulting, spent at least £99m in 2004-05, almost £46m of which went to Capgemini. The Department of Health listed its spending as only £12.8m on consultancy services generally in 2004-05, although this figure is outstripped by NHS expenditures, which were not included.
Illustrating the difficulty in differentiating between types of consultancy, the Department for International Development spent £214m in 2003-4, most of which went to companies and non-governmental organisations engaged in delivering overseas aid and helping foreign governments.
http://www.ft.com/cms/s/f4829964-25b0-11db-a12e-0000779e2340.html
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