The omnipresence of consultancies is harming public services, while creating lucrative opportunities for private profit
Shortly after Margaret Thatcher took power, her environment secretary, Michael Heseltine, wrote: “The management ethos must run right through our national life – private and public companies, civil service, nationalised industries, local government, the National Health Service.” Since 1980, ministers have stayed true to his word. Britain is the outsourcing capital of Europe. No other country on the continent relies so heavily on the consulting industry to do the work of the state. Earlier this year, ministers quietly dropped restrictions on spending controls, allowing Whitehall departments to potentially spend even more on external consultants.
Those controls were the product of David Cameron’s 2008 pledge to end what he called the reign of “policy by PowerPoint”. Mr Cameron correctly argued that the use of consultancies had exploded under New Labour, whose faith in the credo of New Public Management, an agenda that sought to make the public sector function more like a business, produced lucrative opportunities for consultancies. Yet the story was hardly different under the Conservatives. While spending on consultants initially decreased under Mr Cameron’s government, economists Mariana Mazzucato and Rosie Collington note that consultancy firms bid for contracts at cut-price rates in an attempt to gain a foothold in government. When the time came for the state to spend big, the consultants would be ready.
