Consulting picks up after 2009 slump

MANAGEMENT CONSULTANCY revenues held firm in 2010 despite a sharp decrease in government spending.

Fee revenues for the UK consulting industry came in at £5.44bn in 2010, from £5.38bn a year earlier, according to the latest figures from the Management Consultancies Association (MCA). The 1% growth follows five years of slowing industry growth and contraction since 2006.

Central government demand for consulting services fell 11%, executive agencies by 13% and local government 35%. However, demand for consulting in the private sector climbed 10%, while the banking sector grew by 35%.

"Fundamental change" and reorganisation in banking saw consulting services boom, said MCA chief Alan Leaman (pictured).

He remains an "optimist" that public sector work will pick up: the government is currently looking to put into place a more effective procurement system, while he hopes that efficiency savings in the public sector will require consultants' advice.

"I detect a growing view in government that the use of consultants is about outcomes and value."

The public sector's use of consultants as temporary staff has ended, said Leaman, as their value "wasn't being tracked properly".

He continued: "We'll have a much better system in place. I suspect we'll see a smaller market in the public sector in future, but more sustainable."

Leaman said there was a big push for smaller players to be able to win public sector contracts but that the tendering process must be structured properly to protect the firms from the cost of repeated bidding.