Like many other world powers, the U.K. government relies on consultants in the development, deployment, and maintenance of public services. The past few years have seen an explosion in engagements in response to the public health crisis, with private contractors assisting in everything from procurement of PPE to developing emergency loan programs for businesses. The results came at significant cost: the total value of contracts awarded to consultants more than doubled to £2.5 billion in 2020-2021. In spite of government plans to cut costs, the public sector consulting market is expected to grow in 2022.
The U.K. government’s plans to reduce costs involve the use of a consultancy hub geared toward making better use of in-house expertise, upskilling civil servants, and utilizing external consultants more efficiently. The Ministers also developed a new set of best practices on hiring and usage of consultants, with more than 350 career civil servants receiving training in recent months. The results are yet to be seen, with the consultancy hub due to release its first annual report later in 2022.
In spite of government efforts to control spending, the consulting market is not going to decline anytime soon. Ongoing efforts to improve regional infrastructure, promote sustainability, and improve public sector digital systems are all likely to create more work requiring specialized knowledge and skills unlikely to be present in government workforces. According to a survey by Savanta for the Management Consultancies Association, seventy-five percent of consultancies expect their public sector practices to grow in 2022.
Consultancies are optimistic for good reason. Compared to other countries, the U.K. government runs very lean, frequently using private sector consultants to do work that in-house talent is unequipped to perform. The government is planning to reduce the number of civil servants in the coming years, likely increasing the need for additional help in coaching civil servants or providing specialist advice and expertise. Additionally, firms are pushing for the government to streamline its costly and time-consuming bidding process to make more room for smaller players.
While cost-reduction efforts may have a mild impact in the short term, it’s clear that the public sector consulting market is poised for continued growth, with new opportunities arising for firms to assist the government in delivering quality services to the public.