One of my favourite publications every year is the Irish Comptroller & Auditor General’s annual Report on the Accounts of the Public Services, which, despite its sleep-inducing name, is a wonderful read full of insight into how the government spends taxpayers’ money. The focus of this weighty tome is usually on waste, overspending and mistakes.
In recent years one of the particularly strange occurrences was how the body responsible for managing state property mismeasured the floor space of an office building, resulting in €10m of additional rent payments being made to the landlord.
The state cannot be an expert in everything it does on behalf of taxpayers. It should be no surprise that taxpayers’ money can be wasted, and to counter this there is sometimes a move to rely on outside advice and experience when it comes to some services.
Consultancy concerns
However, in a new book called The Big Con, University College London academics Mariana Mazzucato and Rosie Collington insist that there has been far too much reliance on external management consultants by both government bodies and private companies.
Their thesis is that governments have become a soft touch for the consulting industry, as the lack of internal knowledge and skills has resulted in the state having to rely on these organisations at significant cost in return for little tangible gain.
There is a temptation to agree that all that is being sold by management consultants is alchemy
The Big Con focuses on the role of consultants in state contracts. Covid-19 proved to be particularly lucrative as governments looked to consultants for advice on everything from procurement to testing and vaccine rollout.
The book charts largely the same territory as When McKinsey Comes to Town by the journalists Walt Bogdanich and Michael Forysthe, who examine the success, failures and influence of the eponymous firm.
A question of value
The two books have led to the questioning of the value that such firms offer. There is a temptation to agree that all that is being sold by management consultants is alchemy, sprinkled with buzzwords and a few spreadsheets.
Consultants offer the seal of approval for changes that would otherwise be ignored or resisted
While I found The Big Con a fascinating read, I disagree with its conclusions. Over many years and interactions with ministers, pretty much all of them have lamented to me that part of the problem of implementing policy is the challenge of internal opposition to change and also the speed at which the machinery of departments move. There is no reward for risk, no downside for maintaining the status quo and no incentive to do things more efficiently.
Part of the reason why consultants are hired, in either public or private bodies, is not to provide some sort of magic solution to an organisation’s problems but to offer (albeit expensively) the seal of approval for changes that would otherwise be ignored or resisted.
Managing change
The hardest challenge to manage is change. Outside eyes and advice – even if it is as basic as recommending cost reduction and organisation overhaul – can sometimes be a powerful catalyst, uttering the words insiders avoid out of fear.
The consulting industry generates lucrative fees, so there will be no tears shed for the criticism it has faced. Yet it does provide a vital service for its clients and it should speak up more about its role.
What may also be needed is a defence by clients of why their services are needed. Companies become stale without fresh ideas. Governments move slowly. Change is rarely seen without an external perspective. That in itself is worth paying for.
