NAO report says consultancy ‘can provide great benefits’

Management Consultancies Association (MCA) calls for further action to separate consulting from staff substitution and to drive up value…

Today’s NAO report into Central Government’s use of Consultants and Interims confirms that the use of management consultancy by government “can provide great benefits”.

The report also tells the coalition government that restrictions imposed since the election “could lead to the displacement of costs elsewhere” and “cannot be an effective ongoing approach to managing spending.”

The MCA, which represents around 70% of the management consulting industry, supports, in particular, the report’s attempt to draw a distinction between genuine management consultancy and the use of interims as substitutes for full-time staff. Confusion between the two has added to costs and reduced effectiveness.

But the MCA believes that government now needs to move much further and faster to put value at the heart of its work with consultancies.

Consultancies already provide excellent services. The Association now wants to see clear definitions of desired outcomes, rigorous evaluation of achievements and more use of payment by results.

Alan Leaman, CEO of the MCA, said:

“Consultancies deliver significant benefits to the public sector, including reduced costs, improved services and effective organisational change. Both buyers and consultancies must maintain a disciplined focus on delivering value. This will require a clearer distinction between consultancy and interim managers, who are often doing work that should be done by full-time employees. And it should mean a more rigorous approach to using consultancies by departments.

“The Government has the opportunity to create a new and far better regime for the use of consultancy in the public sector, based on the value of the outcomes that are delivered. MCA member companies are ready to help.”

The MCA has proposed and campaigned for improvements in the government’s use of management consultancy which would benefit the taxpayer, individual departments and the consulting industry. A number of the industry’s recommendations have been endorsed in the NAO report.

In particular, the MCA supports the following recommendations that are set out for government buyers of consultancy in the NAO report:

  • Define the expected outcome and benefits at the outset
  • Focus on the best way to achieve these outcomes when taking decisions about whether to engage a consultancy
  • Make more use of incentive based and fixed price contracts to deliver these outcomes, moving away from time and materials contracts and daily rates alone
  • Include a review of the outcome of the work in performance assessments, rather than concentrating on the procurement process

The MCA also:

  • Agrees that there needs to be improved integration between the use of consultancy and the Government’s workforce planning. The consulting industry wants all government departments to be sure that they understand why they are using consultancies before they engage them
  • Welcomes the report’s recognition that an undue focus on spending on consultancy can lead to higher costs elsewhere in government and the purchase of inappropriate services;
  • Believes that all consultancies should be held to the commitments set out in the MCA’s own Code of Practice.



For more information, please contact:

David Pippett, DWP Public Relations

Tel: 01225 459676/Mobile 07899 798197


About the Management Consultancies Association

The Management Consultancies Association (MCA) is the representative body for management consultancy firms in the UK. Our sixty member companies comprise around 70% of the UK consulting industry, estimated to be worth £9bn in 2008, employ more than 40,000 consultants and work with over 90 of the top FTSE 100 companies and almost all parts of the public sector.


The MCA’s tough entry criteria and rigorous Code of Practice mean that MCA member companies are widely acknowledged to provide high quality services to their clients. Many of their achievements are recognised in the annual MCA Management Awards and the Consultant of the Year Awards.

The MCA informs and influences public debate on topical issues, and provides authoritative data on the industry. It commissions research and policy analysis and represents the industry in discussions with Government and other stakeholders. The MCA also facilitates networking and the sharing of best practice within the industry through events, publications and initiatives such as the Young MCA.