What are consultancy companies doing to our governments?

The title is The Big Con: How the Consulting Industry Weakens our Businesses, Infantilises our Governments and Warps our Economies. Quite a charge sheet.

It’s co-written by economics professor Mariana Mazzucato – who also happens to be on the Advisory Council for Economic Transformation in the Scottish Government. Is advising the same as consulting? The former is long-term, the latter a time-specific piece of work – like the research Mazzucato herself contributed towards a Scottish National Investment Bank. So what exactly is she attacking?

You may have heard the names of the consultancy firms that are targeted here: PricewaterhouseCoopers, McKinsey, Deloitte, Bain, Ernst & Young, KPMG and the Boston Consulting Group. And the vice they mainly serve is governments’ (and large companies’) lack of confidence in their own abilities to execute major projects. This anxiety is what these powerful entities offer to assuage, providing swarms of the brightest and best, bearing Excel sheets and Powerpoints at eye-watering costs.

There’s one anecdote in the book that’s been leaping out to all the reviewers. That’s Deloitte being commissioned – at a fee of £1million-a-day – to build and run the NHS’s Test And Trace programme during Covid. Hundreds of millions were billed, but the scheme was a functional disaster.

In The Big Con, Mazzucato quotes a source from one of the UK Government’s pandemic staff: “Loads of wandering Deloitte people spent time asking really basic questions that we had to respond to, taking our attention away from actual work”.

READ MORE: Candidates quizzed on energy wealth at second leadership hustings

Her deeper charge is that consultancies feed on, and generate, an underlying insecurity in their clients. “The problem is when the consulting industry is built on a business model which, almost by definition, needs desperate governments,” Mazzucato told the New Statesman recently.

“For many in the industry, there’s no incentive to actually strengthen and make independent the government entity you’re working with because then you won’t have the follow-on contract,” she adds.

Mazzucato has an animus here – she actively wants nation-states to be stronger and more confident in themselves. Her breakthrough book was The Entrepreneurial State in 2013, which had its own version of the killer consultant slide. It was a picture of an iPhone surrounded by arrows, which pointed towards the scores of state-backed research initiatives that made this seemingly ultra-commercial product possible.

Recently, Mazzucato’s focus has been on how governments can establish “missions” – like John F Kennedy’s moonshot – that pull together public and private forces, so they can jointly serve a massive goal. Doing this can generate a broad and steady wave of innovations and improvements for the whole society. (With Scotland’s renewable energy ambitions, you can imagine why her ideas are attractive to the Scottish Government.)

But how can you have the wherewithal and capacity to do this, if your own ministers and civil servants are constantly deploying the services of bright and slick consultancies? This is the “infantilisation” charge from The Big Con title.

Sometimes it’s worse than infantilisation. In their inherent tendency to cut costs and impose “efficiencies”, consultancies are often used as cover for ministers (or executives) to justify the damage they’ve already planned.

This has a long history. Mazzucato takes consultancy all the way back to the “man with the clipboard”, Frederick W Taylor. He would stalk the floors of early-20th-century factories in the US, noting potential inefficiencies perpetrated by the relevant “human resources”.

This “Taylorism” is the underlying logic of any consultancy. The Big Con reports that even Lenin and Trotsky, in formulating their first Soviet five-year plan, used the services of the US-based (and Russian-born) engineer-consultant Walter Polakov, to manage production and investment.

There’s also a more recent history. The attacks of Reagan and Thatcher on the public state opened the door to the “consultocracy” – including their assumption that states only act when there has been “market failure” (implying that markets, left to themselves, usually function well).

The Big Con tells us that in 1979, the UK Government spent £6m on consultancy. In 1990, 11 years of Thatcher later, “the amount was 40 times greater at £246m”. Current estimates of the size of the market for consulting globally go “from between £525bn to £674bn”.

So big-con consultancy is a huge deal – a major contributor to the capitalist chaos of our times.

However, what I’ve regarded as my own “consultancy” has felt much more humane and social, particularly in the public sector. What can an outside (maybe even radical) perspective bring to a place which appears mired in its own challenges and context?

READ MORE: Teaching union calls for an end to strike action after new pay offer

In the mid-2000s, I was (along with my partner Indra Adnan) hired by the Scottish Social Work Inspectorate to conduct a consultation with all local authorities in the country, entitled Reimagining Social Work.

We were encouraged to bring creative and participatory methods to the “pariah profession”. Social workers were damned if they did intervene in a fraught family or community situation – and equally damned if they didn’t.

This no-win situation was compounded by the fact (regularly reported by those involved) that nobody really knew what social workers were experts in.

A round-table meeting of “care professionals” would feature teachers that taught, police that policed, nurses and doctors that administered health, occupational therapists that got you mobile … but what was it that social workers did?

And as they often called these meetings, to ensure clients didn’t fall through the net, how could their authority be boosted? What did social workers do, uniquely?

Our conclusion, from a year of workshopping and listening to social workers from all levels, was that social workers should be valued as multi-disciplinary generalists and that what they knew were the relationships in any situation – between families, professionals, the wider social context, other forms of social knowledge.

I remember our presentation to our clients in the Scottish Executive (as it was then). We compared the desired skills of a statutory social worker to those that McKinsey asked of their applicants. They should be pattern-recognisers, adept in several disciplines, have the capacity to take the perspectives of many others.

READ MORE: Scottish independence is the only way to get an energy-secure future

We intended it to be a fair comparison (though I’d imagine that Mazzucato would snort at what the Big Con consultancies turn such capable souls into). Our commissioner, a weathered senior social work executive, seemed happy enough with our conclusions. Though I think they were more a confirmation of his deepest intuitions about the profession, than some angular and savage cut-through of red tape and flabby staff levels.

Indeed, we were such poor consultants, in Mazzucato’s sense, that we became forever affected by the rich and detailed stories that social work staffers told us.

The idea of paring away any of this hard-won, stoic wisdom about the human condition absolutely horrified us. “Are we social workers just ambulancemen for capitalism?” quipped one grizzled old-timer. Some talked spookily about their “use of self” in dealing with clients; others admitted they would open their domestic doors to some of their trickier clients.

Everywhere there was a pent-up creativity and empathy, that (in our view) would be lost and destroyed in some more conventional efficiency drive. In that gig, we were perhaps reconsultants, trying to help a beleaguered profession find its core and soul again.

At worst, I’ve been a deconsultant – taking an organisational framework to pieces, leaving the enterprise whirling and disoriented, guaranteeing no call-back (but perhaps bringing some trickster’s advice to where it needed to be).

And to leave you with the web’s best jokes on the subject: Why do skeletons make good consultants? They’ve got no skin in the game, no guts and no balls.

What’s the difference between a lawyer and a consultant? The lawyer only has one hand in your pocket.

Mazzucato’s book at least makes blindingly clear the kind of consultant you don’t want to be.