A new book by Professor Mariana Mazzucato and political economist Rosie Collington (currently researching for a Ph.D under Professor Mazzucato’s supervision) promises to be a long-overdue study into the ‘corporate consultantsocracy’ that has drained the budgets of public services for too long.
And I write the above as someone who has been one of those contracted to deliver workshops on behalf of large corporate consultancies shortly after I left the civil service. (I don’t think I’ll be getting future gigs from them in the future after that statement!)
You can read the article in The Guardian by Prof Mazzucato and soon-to-be Dr Collington here. How big an issue are we talking about?
“the omnipresence of consultants across the global economy is striking. In the past decade, the largest firms have been hired to help design smart cities, develop net zero strategies, propose education reforms, counsel armies, manage the construction of hospitals, draft medical ethics codes, write tax legislation, oversee the privatisation of state-owned enterprises, manage mergers between pharmaceutical companies, and govern the digital infrastructure of countless organisations”Mazzucato & Collington, The Guardian, 28 Feb 2023
At a local level, we’ve seen them at the heart of the transport planning and development planning activities. Most controversially has been the consultancy spend by the Greater Cambridge Partnership, repeatedly contested by the Smarter Cambridge Transport Campaign.
“The breadth of [The Smarter Cambridge Transport] team has helped us produce – entirely for free – more imaginative, cost-effective and deliverable proposals than any of the schemes devised and developed by the Greater Cambridge Partnership’s consultancies at a cost of tens of millions of pounds.”Smarter Cambridge Transport is retiring – 08 December 2021
One of the things that austerity has resulted in is the diminishing of skilled officer capacity to scrutinise and analyse the reports that are produced by consultants. As a result, this increases the risk that they take the reports as given, with councillors then feeling oblidged to accept as given the officers’ recommendations. In all of the GCP meetings that I have attended over the past…seven years, (!!!) I have only ever seen an officer’s report rejected by the GCP Board – when former Cllr Francis Burkitt (Conservative – representing South Cambridgeshire District Council 2015 to 2018) – who is now a Canon at Ely Cathedral, told officers to try again. You can hear what he said about the GCP at the start of the programme back in 2015 here.
The Combined Authority for Cambridgeshire and Peterborough also started splashing the cash on consultants when former Mayor James Palmer chose to go for the CAM Metro project based on untested technology, rather than the proposals from Dr Colin Harris and Connect Cambridge (which I support and run the Facebook page for) which in comparison was put together on a shoestring budget in co-operation with Rail Haverhill and Rail Future East (the last of which you can join as a member – give Mr Wakefield an email).
“Where did the dependency on consultancies come from?”
Good question. Part of it in my view comes from the misunderstanding of what we mean by ‘theory’.
“The theory that this way of doing things increases “efficiency” or “innovation” is just that: a theory. It’s based on the assumption that expertise and capacity can be bought off-the-shelf, rather than developed over time inside an organisation.”Mazzucato & Collington, The Guardian, 28 Feb 2023
It was only when I returned to Cambridge from my 3 years at university in Brighton that I started hanging around with some scientists who I had met through various social circles who explained to me the difference between a scientific theory, and a public intellectual saying “well in theory….”
At a very basic level (GCSE Bitesize level) the explanations of what a scientific theory and a hypothesis are, is here. (I’m of the view that if you want a refresh on the basics of something, materials produced for children/teenagers can be a useful place to start because it has to get to the point and be accessible to the widest range of people.
What we hear too often in politics debates is someone saying “Well in theory…” – with or without stating what assumptions the ‘in theory’ is based upon. That is the point Mazzucato and Collington make in their article. One of the questions I often ask in debates when someone makes a statement as if it is fact, is what assumptions their statement is based upon.
So for example very basic economic principles of supply and demand indicate that if an economy is producing too much of something, the price level will fall until the market clears, and if an economy is producing too little (creating a shortage), the price level will rise until the shortage is cleared – removing the demand from people who are unwilling to pay the higher prices. Apply this to any market for any goods and services and this is what should happen – only all too often it doesn’t – because of a whole host of ‘barriers’ to the functioning of an efficient market. Has that worked for housing in Cambridge? Cllr Sam Davies MBE had a look. Is land and are water resources infinite? Does the model assume they are?
We often hear about these ‘barriers’ when ministers want to reduce the rights of workers, or ignore the rights of, and the need to protect the environment. We often hear about how firms need to incentivise executives with high salaries and bonuses, but not for the lowest paid whose terms and conditions have worsened as societies have become more unequal – Cambridge being the most unequal city in the country. Whips for the workers, cash for the corporate cronies? Yet for all the noise about firms having to account for things like ethics and the environment, the High Pay Centre says financial returns have a disproportionately large incentive vs societal incentives on chief executives.
“…for every £1 that CEOs can earn from delivering good outcomes for employees—such as an improved health and safety record, or higher levels of employee engagement—they could make £42 from hitting financial targets relating to measures such as profitability, shareholder returns or revenue.”High Pay Centre, 14 Jan 2021
This might reflect things like the continued bad behaviour of water companies polluting our rivers. If the fines issued by toothless regulators is not greater than the amount of profits gained from continuing to pollute, there is little financial incentive for a monopoly provider to change their behaviour. Furthermore, we have 30 years on which to look back over the case of privatisation of public utilities that Michael Heseltine wrote the foreward for in 1994 – see the snapshot below.
Above – from Privatisation 1979-1994 – Everyone’s a Winner
Investing in the workforce of public organisations – capacity building
I don’t like using the phrase capacity building because it’s so “Year 2000”. Furthermore, regeneration programmes under Labour were criticised for spending a lot of money on consultants that did not fully deliver on the outcomes that were expected. There were a number of things that, from my viewpoint inside the system that caused this. One of them was the high pressure from ministers to see immediate results – not accounting for things like time lags. The time it takes between a secretary of state pulling a policy lever or publishing a White Paper to seeing visible results on the ground is, in my experience measured in years, not weeks.
If you are a public official or civil servant under that pressure, one way to demonstrate progress is to commission a consultant to do something and record that as an action. “We have commissioned X consultants to deliver Y actions and they will report back at Z”. It’s worse when the actions themselves are things that could be done by local organisations such as local councils, without recourse to Whitehall. The whole Levelling Up programme in my opinion is something that could – and should have been devolved to local councils, while strengthening the systems of local accountability of that spending rather than having something that leads all the way back to Whitehall. But overhauling local governance and the governance of England is still in the too difficult to deal with pile.
Moving towards a different type of working and learning with outside organisations – one that benefits communities
When I was on the Fast Stream during my civil service days, one of the things that surprised several of us was that there was no accredited framework or grounding for the graduate scheme that we were on. That was in the mid-2000s, and things have changed a lot since then, so I’m not referring to the current scheme of which I now know little – it’s been over 15 years.
Some of us looked into post-graduate distance learning courses but the one we ended on – not that we knew it at the time – was based around the principles of New Public Management Theory which, as 20-somethings we could all see was becoming rapidly obsolete in the face of pressures of a society moving onto this new-fangled thing called social media. Whether the “New Public Service Theory” can make a better go of it remains to be seen – noting this from the UNDP from 2015 – in particular the tables below. (Blog contines after the tables).
The NPR model we were taught in the late 2000s reminded me of my time at university nearly a decade before, where the story we were being told by the economic textbooks of the late 1990s were increasingly inconsistent with what was happening in the outside world. (Also, some of the authors and big names ended up having ‘conflicts of interest issues’ with Icelandic banks – exposed during the banking crisis).
Above – Inside Job (2011)
No, I haven’t gotten over it!
Furthermore, the training programmes at the time were often delivered by associates and consultants – and for a couple of years I was hired later on to become one of them in a system that was quickly scrapped when found to be wanting.
Local universities and lifelong learning colleges as providers of training and learning opportunities
This for me is the big opportunity that not only reduces the ‘leakage’ of public funds to large corporations, but also builds up the capacity of public institutions while keeping the public funding within local economies. One example where I’ve put pressure on local public organisations is on town planning – where our local councils have a chronic shortage of town planners, but where our local colleges are not providing town planning courses. I made a similar call about dentistry in the face of Cambridgeshire’s chronic shortage of dentists. Why are we not asking colleges to provide the range courses that new and existing members of staff can take time out from work to get trained and educated (and even refreshed) in those areas that organisations need, rather than outsourcing to consultants?
Not just training for the job, but holistic learning too
This is something I wrote back in August 2022 on my call for a new lifelong learning centre in Cambridge that is close to a major public transport hub – whether rail or light rail. In a nutshell I don’t want it to be what it has been in the past: going into a lifeless corporate room in a third-rate newbuild block, but rather involve going to a place where people look forward to going to and being in – as well as learning in. For example where people can book a one year course where they spend a morning session on the course they’ve booked on, and then have the afternoon free (mindful of the four-day-week) to use the leisure facilities, take part in a discussion workshop (for example one that familiarises people with how our wider public services, democratic institutions and legal systems (that my generation was not taught about at school, function), or simply go for a walk in the nearby open spaces.
Revenues from training budgets of local public sector organisations then get reinvested in the local lifelong learning institutions for the benefit of the wider community. Furthermore the nature of the courses mean that you get the cross-organisational networking that’s not ‘forced’, but rather is an outcome of bringing people together on a routine and regular basis over a period of time. None of that awkward “Thank you for your business card – I know I’ll never see you again” scenarios.
That for me is why lifelong learning is so important. Even more so in an era where we stopped having careers for life ages ago, and where we’ve ended up with heavily-indebted workers. (Whether graduates with tuition fee and rental debts, to highly-mortgaged older workers, to younger workers with consumer-related debts in the face of saturation advertising).
For somewhere like Cambridge – and Cambridgeshire too, ‘investing in the collective intelligence of the public sector’ involves functioning as a city greater than the sum of our parts. Central to that is a strategy for lifelong learning. Over to you Dr Nik Johnson!
Food for thought?
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