The government’s rapidly growing bill for management consultancy hit £1 billion last year, double the amount spent the previous year. Among the increases was a 185% increase in NHS expenditure on management consultants. Figures published by the Management Consultancies Association revealed that central government doubled its spending on management consultancy last year to £1 billion, making it the single largest buyer of consultancy services. In total the UK spent over £10 billion on consultancy services last year. According to the MCA report a further £300m was spent on consultancy services by public sector bodies, taking the total public sector spend on consultancy to £1.3 billion last year. Even this figure understates the total public sector spend on consultancy, as the MCA only represents 60% of the sector, with leading players such as McKinsey are not covered. Among the biggest central government buyers of consultancy services are the Department for Work and Pensions, Transport for London, the Inland Revenue and the NHS. Last year the health service spent £25m with MCA members, a 185% increase on the year before. Separate to the £6 billion of contracts awarded by the national programme, in which major consultancy firms such as Accenture featured heavily, the Department of Health in 2003 awarded a £37 million three-year contract to Kellogg Brown and Root (not a member of the MCA) to oversee the project planning, procurement support, and implementation of the National IT Programme. The full value of the contract over ten-years could be worth up to £117m. According to the association government’s growing appetite for spending on consultancy shows no sign of slowing. Within the total spend outsourcing-related consulting rose by almost 50%, accounting for than a third of total consulting fee income. Public-sector clients were also the main purchasers of business process re-engineering, e-business, marketing and strategy, says the report.
