The use of management consultants by government has grown enormously in recent years. In the UK, consultancy brings in around £10 billion a year in fees across the public and private sectors. And while not totally recession-proof, the numbers grew in the run-up to Brexit and then COVID-19. (Remember test and trace? Consultants played a major role). Consulting firms can provide advice and extra resources at short notice and can be very effective for the right task and client. But their use often brings controversy, especially when public money is at stake, over the value of outsourcing, for instance.
This raises a number of questions. Does consultancy bring improvements such as increased efficiency? If not, how can we explain its huge growth? In this talk I address these concerns by reporting research conducted by myself with colleagues from the Universities of Bristol and Seville. In an earlier study (published in 2019) we found that across a sample of 120 English NHS trusts, each spent an average of £1.2 million a year on external consultants between 2008 and13. We showed for the first time that, all other things being equal, using consultants was associated with inefficiency down the line. More recently, in our latest research, we show that a key predictor of consultancy expenditure within the NHS is previous hiring – in other words, using consultants appears to have become an expensive habit.
In this presentation I will review these findings and explore some of the reasons behind them. I will also consider the wider policy implications and what might be done to ensure that taxpayers’ money in seeking external advice is spent wisely and effectively.
Ian joined the York Management School as Professor in Management in 2019. His research interests are the changing management of public services and professional organisations. He has conducted a number of studies focusing on developments in social services and healthcare, most recently drawing on large scale (routine) administrative data sources to profile the management characteristics of health care organisations and the impact of managers.