Public Service frameworks are beginning to show growth

Growth in the number of projects we are seeing coming through public service frameworks is very encouraging. And we're even seeing some credible use of the frameworks, where no one necessarily seems to have been 'teed up' in advance by the departments for the bid – which is positive.”

Paul explains that it is a principle of strong procurement that information should be shared with suppliers, queries answered and specifications developed through challenging dialogue. “But there remains a real nervousness on the part of departments and agencies about engaging with suppliers in case the 'police' in the Cabinet Office have a go at them, even get them fired. But this is completely counterproductive. Getting value for money and creating value for all clients, but especially for government, will often depend on consultants challenging what has come out in the raw specification. We will ask difficult questions like, WHY? Because we need to deliver a workable solution. We know from our private sector work that challenging powerful stakeholders and traditional ways can be scary. But where we are able to get into effective and above board dialogue with government our offerings are so much better.”

Concerto are also seeing growth in other critical areas. Paul shares the general view that the consumer demand for retail digitisation is fuelling innovation and thus consulting spend as clicks and bricks compete for custom. He expects other growth areas to continue to be sources of consulting demand, highlighting infrastructure, where the government's attempts to underwrite and unlock spend on the UK's under-resourced assets, has produced an uplift in activity.

“But demand from those sectors, while it probably implies long term growth and overall economic health, doesn't yet mean anyone is making money.” Paul points to the commoditised infrastructure supply chain, which puts pressure on price. “Firms will inevitably try to diversify and move to different areas of the value chain. I wouldn't be surprised to see this lead to accelerated rounds of consolidation in corporate services engineering, construction and property. That may happen in other bits of the economy. We're probably in good shape overall, but not because GDP tells us. That's a poor indicator, far too clunky. There are probably quite a few zombie businesses out there – in retail for instance – who need to be put to sleep or change. Pre-2008 levels of global demand may never return in some industries, so let’s compete to get our share, fair or not. I think we may move into a more sustainable phase, where a new British capitalism slowly emerges. A bit leaner, a bit hungrier, a bit lighter on its feet, with a few big beasts. And generally better at meeting the needs of a global and more demanding customer through better collaboration, But overall one that is more fit for purpose.”

The full interview can be read as part of the UK Consulting Industry End of Year Report 2014 – Optimism, Tempered by Caution. Free for MCA Members.