Consulting in-house brings added benefits

Recently the Public Accounts Committee (PAC) confirmed that spending on consultants in the public sector in England in the past three years rose by one-third to £2.8bn in 2005/2006. Of this sum, central government accounted for £1.8bn, and while it is difficult to say how much is attributable to local government, according to the London Centre of Excellence, £170m was spent by London boroughs alone last year.

Consultants, when used effectively, can undoubtedly provide considerable benefits for clients. However, the PAC report comments that they are sometimes used for less appropriate means, such as reassigning blame and delaying the implementation of policy.

More attention also needs to be given to managing consultants better, and ensuring skills transfer from consultant to client teams to increase internal capabilities.

If this position is linked to a recent report from the IDeA on the skills gap in local government, an alarming position begins to emerge. Based on replies from 195 local authorities, the report found the most common skills gap was in organisational development and change management for 72% of responses, followed by business process redesign (61%), performance management (60%), and customer relationship management (48%).

This is very telling, since these are the very skills needed by an organisation, if it is to change the way services are delivered.

If local government is to modernise, the choice is, therefore, either to develop these skills in-house or continue with the traditional route of buying in skills from consultants.

There is, however, another option to consider, and this is embracing partnerships with business process outsourcing companies where these skills are part of the benefits they bring to the relationship.

There is then no longer any need to pay for expensive short-term support because, through your partner, you have long-term consultancy capacity and operational skills available, linked with contractual responsibilities to deliver.

This also provides skill transfer, since teams work together over a 7 to 10 year period. However, to unlock this resource, it is necessary to go through the procurement process and currently, here also much reliance is placed on consultants and lawyers to run this process as well.

The time has surely come for more of these commissioning, procurement and re-engineering skills to be available in-house.