Rethinking the governance of external consultancy in the public sector
Management consultancy use in the public sector has long provoked controversy, with questions over efficiency, effectiveness and ethics. These continue to be raised globally, with occasional scandals with firms such as McKinsey in the USA, PwC in Australia or Bain & Co. in the UK. This all suggests that approaches to managing the use of consultancy have not been effective. In fact, there are few checks and balances on consultancy which is surprising given how much is spent on it (over £3 billion in the UK public sector in 2023-4). One periodic policy response, currently planned by the UK government, is to cut the use of external consultants and do more work internally through an empowered and enlarged civil service. This ‘insourcing’ mostly makes sense, but there will always be some need for external expertise. So, what can be done by both clients and consultancies to help make it effective?