Fees earned by Britain’s management consultancies broke the #2bn barrier for the first time last year, reflecting the increasing importance of consultancies in the UK economy.
According to latest figures from the Management Consultancies Association, members’ fee income was up nearly a quarter compared to 1996.
The MCA estimates that its members now account for around half of all consultancy earnings.
The industry also saw the consultant workforce grow by 20 per cent to 11,000.
Total fee income for consultancy work in Britain and abroad similarly grew by almost 20 per cent to #1.6bn, as did earnings from projects within the UK which netted some #1.3bn.
The highest expenditure on consultancy projects came for central government, a sector which grew unexpectedly in 1997 and today accounts for 17 per cent of MCA members’ total fee income or #157m.
“I attribute this first to having a new government taking over from an administration that was relatively stale, and to the fact that a number of projects were put on hold pending a General Election,” commented Brian O’Rorke,the MCA’s outgoing executive director.
But while central government work was up, consultancy projects for the National Health Service dropped by 70 per cent to #5m.
The financial business services sector, meanwhile, accounted for #484m – 30 per cent of total fee earnings and an increase of 3 per cent on 1996.
Income from corporate strategy and organisational development grew by 18 per cent to #238m in 1997; project management income grew by 7.4 per cent to #97m and fee income from human resources consultancy grew by 5.9 per cent to #78m.
Added O’Rorke: “It is encouraging that overseas earnings were up 19 per cent. In the past when consultants had a strong home market, management consultancies tended to drop overseas work for projects here, though I have often thought of that as short-sighted.”
Income from European Union work was up 47 per cent to #140m. In the rest of Europe fee income dropped from #68m in 1996 to #45m at the end of 1997. Fee income for the Asian market fell from #33m in 1996 to #26m in 1997, while consultancy income in the Americas grew from #23m in 1996 to #53m in 1997.
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