2 The lack of information on the use
of consultants
5. In the past three years spending on consultants
has risen by a third, from £2.1 billion in 200304 to
£2.8 billion in 200506, largely due to increases in
spending by the NHS.[10]
Only two departments have shown a consistent decrease in their
spending on consultants over the period (the Department for Trade
and Industry and the Department for Work and Pensions).[11]
6. Departments do not routinely collect information
such as types of services purchased and procurement route used.[12]
OGC has collected information on consultancy spending in the past
as part of an exercise looking at government expenditure. This
activity was stopped in 2003, however, as the information received
from departments was inconsistent and incomplete, diminishing
the value of the exercise.[13]
7. OGC issued a definition of consultancy in February
2006[14] and the Treasury
issued guidance on classifying consulting expenditure in November
2006 to facilitate aggregation and comparison. Without this key
information on the use of consultants, departments, and OGC across
government, cannot make informed decisions on their use.
8. Departments, and OGC across government, do not
regularly assess the value of the work of consultants.[15]
There are significant challenges in assessing value for money
from consulting projects. For example, it can be hard to identify
useful measures that are suitable for all types of projects and
attributing cause and effect is not always easy, even where performance
has improved. Departments can nonetheless assess consultants'
performance against what they were set out to do in the business
case and requirements specification.
9. Business cases and requirements specifications
are necessary to explain, justify, and make clear the role and
expectations of the consultants before they are hired. Post project
evaluations that capture lessons learned and assess the performance
of consultants are not consistently carried out nor shared throughout
the organisation.[16]
Furthermore, OGC does not share this information across government.
10. The nature of the consulting market creates substantial
challenges for managers who are seeking to hire or work with consultants.
Clients find it difficult to differentiate between consulting
firms and to assess whether they are getting value for money.
The relationship between client and consultant is a balancing
act. On the one hand, clients value objectivity and perspective
from their consultants which requires the consultants to remain
'outside' of the organisation, yet on the other hand, clients
need consultants to show ownership and accountability to implement
their work, which requires consultants to work within the organisation,
potentially for long periods of time.
11. The way a consulting firm is structured and how
its consultants are incentivised can focus on the needs of the
supplier rather than those of the client.[17]
It can be difficult for clients to select the correct consultant,
decide how consultants will work alongside internal staff, and
have effective negotiations. All of these challenges make it more
important for departments to work together. However, departments
have not done so and do not regularly learn from each others'
experience to improve their use of consultants.[18]
Departments do not share information about the performance of
consultants, contract information, general market intelligence,
and lessons learned about the procurement and management of consultants
across departments or even within the department.[19]
10 C&AG's Report, para 2.2 Back
11
C&AG's Report, para 2.4 Back
12
C&AG's Report, para 2.12; Qq 8, 88 Back
13
C&AG's Report, Figure 12; Qq 9, 10 Back
14
C&AG's Report, para 3.5 Back
15
C&AG's Report, para 3, 2.17, 2.18; Qq 51, 73-74, 123 Back
16
C&AG's Report, para 4; Qq 91, 114-115 Back
17
C&AG's Report, para 1.8 Back
18
Qq 49, 144 Back
19
C&AG's Report, Figure 2, Figure 12 Back
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