Central government is rubbish at managing management consultants

A few years ago, when I told a friend that I was running training sessions for executives on how to use management consultants, he thought I was having him on. “You’re selling consultancy on how to use consultants?” he said, “Please tell me this is another of your wind-ups.”  

When you put it like that it does sound a bit like an April Fool’s joke but managing consultants is a skill and it is one that is seriously lacking in some organisations. Today, the National Audit Office has published yet another report into the use of consultants in the public sector and concludes, as many others have done, that the public sector does not get value for money from its external advisers. But this report is different in that it concentrates on the customers as much as the suppliers. Rather than beating up the evil consultants for pillaging the public sector, the NAO concedes that some of this lack of value is the fault of the customers. The report concludes that civil servants are, on the whole, not very good at managing consultants:

Departments are not smart customers of consultants and interims. They need to be skilful, knowledgeable customers to get full value from their use of consultants and interims. This means having the capability to set clear and appropriate expectations of consultants, and systems in place to define and measure the value from engagements.

It’s refreshing to read this report as it highlights some of the problems I have been banging on about for years. Public sector organisations, especially central government bodies, are hopeless at defining what they want consultants to do. Good consultants try to help clients define their needs before they start a project but the civil service seems to be plagued by scope-creep. It is very easy, over time, for consultants to find themselves doing things that they were not called in to do. Even the most experienced consultants sometimes fail to spot scope creep until it is too late.

Two years ago, I wrote this:

Increasingly, though, the public sector is blurring the line between external support and hands-on implementation. Consultants, especially those at the more junior levels, often start off with a specific brief to work on a clear fixed-term project but, over time, end up acting in day-to-day line roles, carrying out tasks which would normally be done by civil servants. Friends of mine have spent months,  and sometimes more than two years, working on government projects in which the scope changed and their roles gradually became indistinguishable from those of the civil servants with whom they shared an office. As one of them explained to me, “The department is using us as Higher Executive Officers.”

And bloody expensive Higher Executive Officers too!

This still goes on and, if anything, it is even worse for interim managers and contractors. It is significant that, as the NAO points out, central government organisations often have difficulty distinguishing between consultants, interims and contractors. The lines between the three often blur, as does the line between them and permanent staff.

Three years ago, I did some very crude maths and concluded that, despite all the scare stories, the public sector didn’t spend that much more on management consultants than the private sector. This varies, of course, with the economic cycles. Over the last six months, public sector consultancy spending fell while that of financial services firms increased. But, allowing for these fluctuations, public sector bodies are probably no more dependent on consultants and interims than many other large organisations. The government loses out not because it employes so many consultants but because, as the NAO says, it lacks the ability to get value from them.

Even though spending on consultants is falling, they will not disappear from public sector organisations altogether. As I have said before, experience of large-scale downsizing is rare in the public sector. Government departments, NHS trusts and local authorities will need some outside help if they are to manage the massive changes they are facing effectively. All the more reason, then, for public sector managers to get better at managing consultants.

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5 Responses to Central government is rubbish at managing management consultants

  1. Pingback: Central government is rubbish at managing management consultants - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR

  2. Jenny says:

    I believe that you (and the NAO) have hit the nail on the head. Buyers of consultancy services need to take ownership and accountability for the value delivered by consultants. But, despite your training efforts, few buyers understand how to buy consultancy services- from defining the problem identifying the right consulting firm, to negotiating an appropriate contract and managing the consultants closely until the job is done.
    Too often what starts out as a project ends up being an open-ended arrangement with no results delivered.
    When are organisations going to realise that extracting value from consultants is a skill that is simply too expensive and too risky to be learnt on the job?

  3. localgovaswell says:

    This definitely rings true… When I first got a job in the public sector (in local government) I remember asking a civil servant from the DCMS what one tip he would give me as I entered public service. Without thinking he told me that the ability to manage consultants was most important by a long way. If you could learn to be a ‘good customer’ then it was likely that you were managing other aspects of your area of work well… If you didn’t then in all liklihood, you’d end up with bad services, expensive consultants and as mentioned you’d rely on consultants to do proper roles as you couldn’t get the change you wanted yourself…
    He obviously knew his stuff as observing the managers I’ve worked for in different local authorities over the years it strikes me that those who managed the consultants well (a minority but not a miniscule sample) were by far the best at getting real results… The converse was also 100% true… Hence we still waste lots of money on consultants (The current record in mine is a consultant with 25 months in the authority!!!)

    • I think you are so right. Especieally local authority seems to be totally up the wall without a clue about what they are doing. People seems undereducated and only thinking of number one themselves in their management methods and outcome. I find it so frustrating that everything seems so shortsighted.
      Yesterday I heard that a big local authorothy in London is to cut all the people on the ground dealing with people in the community away. Leaving managers as the only one with any jobs. Most of everybody else are being cut totally away or so severe down thats it’s a totally joke.
      A lot of people are going to kill themselves, their families and children and more vunereable people are being but at risk big time. We are going to see a lot of necklect abuse etc in the years to come.
      It makes me so angry that people keep saying but we have to get rid of this big debt. I simple don’t understand or agree. Money and especieally accounting you can manipulate and make to look how you like. It’s all a belief yes even philosophy. I personal think it’s our capitalistic system which have played in on it’s self and failed big time.

  4. Paul Evans says:

    Surely, if Government was smart enough to manage consultants, it would be smart enough to do a lot of the things it asks consultants to do in the first place?

    It’s not a fashionable argument, I know, but it seems to me that this is all a symptom of our ‘Permanent Bureaucracy’ and one that would be much less pronounced if there was a wholesale change at the top of government departments when new ministers came it. The system of in-and-outers that can be found in many other countries would solve a lot of these problems.

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