Public sector consulting: the great detox

Our latest survey of quarterly buying trends gives an idea of just how fast public sector consulting is changing.

It’s a point we’ll be exploring further in a report to be published later in the autumn, but we included a few extra questions in our standard quarterly survey, just to test the water, with interesting results.

We asked some very simple questions. Do you think the government is right to cut back on the use of management consultants in the public sector? Four out of five organisations said yes to that one. Do you think the reduction in the use of management consultants will have a negative impact? They didn’t. But – and it really is quite a big but – almost two thirds thought they’d be spending at least some money on consultants in the next year.

So how should we interpret these apparently contradictory messages? There does seem here to be an acknowledgement that consultants and other parts of the private sector are likely to play a role, perhaps not so much in helping the public sector cut costs, but in taking over functions currently done by the public sector. The consulting industry is divided about when that will happen. Smaller, more specialised firms tend to be more optimistic, believing demand will have bounced back by spring 2011; larger ones are less sanguine and are bracing themselves for what may be at least a couple of years in the wilderness.

What everyone does agree on, is that there is little to be done for the moment. What the consulting industry is witnessing is the public sector trying to wean itself off what it now regards as a dangerous addiction to consultants. No doubt, somewhere in the bowels of governments across the world, senior civil servants are queuing up to say that they haven’t touched a drop of consulting in weeks.

If you look at the reaction to past scandals, from the Wall Street Crash onwards, it’s clear that this situation has less to do with reason than the need to find someone to blame. Even if there was a mountain of evidence that consultants had added value over the last ten years, it would do no good. The public sector has to go through its period of detoxification – only after this can will we get a sensible discussion about what happens next.