Private consulting and public interest

MEDIA RELEASE

20 November 2006

Private consulting and public interest – is balance possible?

Will private consultants always gouge the public sector? Does the public sector ever ‘learn’ from private consultants? Can the cost of private consultants to the public purse ever be ‘reined in’?

These issues and more will be canvassed by a visiting British expert, Professor Andrew Sturdy, in a public lecture at Victoria University next week on role and cost of private consultants in the public sector.

Professor Sturdy, who advises the British Government on the use of private consultants, will give a public lecture on Monday 27 November at 5pm in Lecture Theatre 3, Rutherford House, Pipitea Campus. He is also available for interviews on Tuesday November 28.

Dr Todd Bridgman, a Lecturer in Organisational Behaviour in the Victoria Management School, says the issues Professor Sturdy will be canvassing are particularly pertinent to New Zealand at this time.

“In the 1998-9 financial year private consultants earned a staggering $177 million from their public sector business. By 2001 the figure had fallen to just under $100 million with the then new Labour Government aiming to rebuild public sector capacity and reduce the use of private consultants. However since 2001 private consultants fees have continued to climb, to $133m in 2004-5, and so too has the size of the state sector.

“Recent parliamentary reports suggest that the State’s appetite for private consulting services has returned alongside its desire for public sector employment. This suggests that the policy objective of building public capacity and reducing reliance on private consultants is either flawed or lacks a crucial mechanism that might improve the flow of knowledge and skills between client and provider.”

Dr Bridgman says the use of private consultants in Britain continues to produce heated debate and the regular attention of the Auditor-General.

“Professor Sturdy’s work goes beyond this tit-for-tat sniping over the fees and the cost. It explores the embedded relations and tensions between public sector and private consultancy and looks for possible compromises and co-operative mechanisms upon which better services and value for money might be achieved.”

Andrew Sturdy is a Professor of Organisation Behaviour and Industrial Relations at Warwick University. He is a member of the British Government’s Professional Services Forum run by the Office of Government Commerce and is advising the National Audit Office on a study of the use of management consultancy in the British public sector, which will be presented to parliament in December, 2006. He is the lead researcher on a recently completed ‘fly-on-the-wall’ study of knowledge diffusion in management consultancy in public and private sectors. For more details go to: http://www.wbs.ac.uk/faculty/members/andrew/sturdy

ENDS

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