The Mint: Good morning, Rosie, and thanks very much for giving some time to talk to The Mint this morning.
Rosie: Good morning. I’m very happy to be here and looking forward to our conversation.
The Mint: Well, I’ve really enjoyed reading the Big Con and it’s been absolutely fascinating. I just wanted to start with, if you could give some background, how did you initially get interested in the role of consultants?
Rosie: So it came about in a few different ways. I had noticed, but for me, my interests kind of developed. When I finished university, I noticed that a lot of my friends were going into the consulting industry when I finished my bachelor’s degree, were going to work as consultants, and there had been this kind of huge presence on campus promoting what looked like these kind of amazing career opportunities, these amazing graduate schemes.
Then when I went into work myself, I was working at the British Heart Foundation in policy, and I became very kind of interested and working in issues related to public sector outsourcing and health services outsourcing. So then when I came back to university some years later to do my master’s, that’s what I focused on. So I’ve spent quite a few years now researching and focusing on the different types of public sector outsourcing and contracting out that happen. And obviously part of that is the consulting industry.
But as we discuss in the book, the consulting industry is kind of a lens for a bigger kind of transformation in government and capitalism that we’ve seen. Mariana also had become very aware through her own policy work that often governments in particular were hiring these companies often to do very important tasks, she was seeing that when she was working with governments. And so had started researching and looking at the growth of this sector or whether there was growth in this sector.
And then when I joined IIPP a couple years ago, the Institute for Innovation and Public Purpose where we’re both based and Marianna’s the founding director, she invited me to write this book with her. It didn’t start out as necessarily a book. It started out as kind of a research project, and we quickly realised, “Okay, this has to be a book that more people can read beyond academia.”
The Mint: And did you have any particular friends at university who went into consultancy that you kept in touch with? Did you get some insight from that?
Rosie: Absolutely. So I think lots of people who graduate from political science degrees or law degrees or economics degrees or even more generalist degrees or classics or a course like this will tend to have a lot of friends. Particularly if they’ve gone to a Russell Group University or a Oxbridge University, they will have a lot of friends who have gone to work in consulting afterwards.
And I think it’s very interesting that I’m now at an age where lots of my friends went, or some of my friends went into consulting and they’ve now kind of come out of it. And they don’t necessarily look back on their years badly, but they definitely have a lot of scepticism towards the industry and agree with a lot of what we’ve written in the book actually.
The Mint: Right. So what were you saying were the key elements of consultancies that create the problem? That make them a problem for policy, how we run our life, et cetera?
Rosie: So it works across a few different dimensions. What we describe as the big con in the book is not necessarily just about the industry, it’s about the relationship between the industry and the way that governments and businesses use these companies, use these big companies. That also entails issues with how these companies have been able to develop this reputation, that they have done, as these kind of objective brokers of expertise or as a source of external capacity, for example. Or as most importantly in business, and most critically for what we look at in the book as legitimators of potentially controversial decisions.
But this development, it has not happened overnight. It has been a process that has been concomitant or co-developing with these broader transformations in capitalism that we’ve seen really since the late 1970s in the UK. And we also look in the book at the kind of impact of the third weight. So not just neoliberalism, not just kind of saturate politics, but also what happened after that and how that in many ways helped to entrench the kinds of outsourcing and the ways that governments today are using consultancies.
The Mint: What I’m saying is, is it that effectively these consultancies are given the level of authority that then gives them excessive influence, if you like? And where do you think that authority comes from? Why do people believe in them?
Rosie: That’s part of the issue. So we describe the kind of consequences in the book of the kind of over reliance on this, the consulting industry, and we focus on the big four and the big three. So the big four are the consultancies that historically have their roots in accounting. So that’s Deloitte, PWC, EY, and KPMG. And the big three, which historically have their, or historically have been considered these kind of strategy consultancies. So that’s McKinsey, Bain & Company and Boston Consulting Group.
We describe the kind of consequences of governments in particular, but also businesses over reliance on them in terms of how they infantilize is the term we use, infantilize these organisations. This process happens where a government or another organisation might become dependent on a consulting company. Over time, this dependence might develop because for example, the consulting company initially comes in offering to do some work for free or because there is a genuine capacity deficit within government. Or because it’s been put under kind of financial pressure because of an austerity programme.
And then over time, that department loses the ability or that government body loses the ability to do these tasks itself and becomes dependent. So it develops this kind of dependence on these companies. But we also discuss issues for democracy. So obviously when governments in particular are relying heavily on contracts after contract, on top of contracts, on top of contracts through subcontracting, which is something we talk about in the book, another form of contracting, this can be an issue for transparency.
In part because citizens in particular might want to know, or certainly do want to know who their governments are working with, what other interests those actors might have. Often this information is not available in the consulting industry. It’s kind of infamous for how it is able to operate in the “shadows”. Quote unquote. And there are some other issues that we bring up that are kind of [inaudible 00:07:51].
The Mint: Well, I really have to think about the term infantilizing because that implies almost that the consultancies are a sort of parental figure almost and a mysterious one. Or a sort of secret parent maybe that holds, they sort of almost hold some sort of knowledge. They’re the grownups, if you like, but their government doesn’t want to almost admit that they’re in charge.
Rosie: I think we use the term infantilize actually to, the term I think refers more to the fact that they keep governments as children. A parent doesn’t keep their child a child forever. That would be very bad parenting. We also use this kind of analogy of a bad therapist. A good therapist is one perhaps who is able to provide counselling or therapy that enables the client or the patient to go on and kind of support themselves in the future. And that’s not the kind of imperative or incentive that this industry is based on.
So infantilizing, it keeps governments, keeps organisations as children because they’re often not able to develop their own learning and become independent from these companies in the process of working with them.
The Mint: So you do sort of accept that these consultants have some knowledge, real knowledge and expertise, but they don’t hand it down. They keep their clients requiring more, if you like, but do they? I mean it’s interesting to question what exact knowledge and expertise do they do? Because I think you’ve said in your book a lot of them aren’t specialists in anything in particular. They have a way of thinking. They promote a way of analysing, a way of finding answers, is that right?
And would you say, I think you do hint at this that that is within a sort of neoliberal, economic sort of market driven, et cetera approach. So is it reasonable to say that that expertise is fundamentally sort of biassed in terms of getting certain sort of answers?
Rosie: Absolutely. So one of the challenges with the book, it would’ve been very easy if a lot of this stuff was just completely black and white, right? So if we were able to say these companies never have any knowledge, they’re completely kind of devoid of knowledge and capacity and expertise, obviously that’s not the case. They do have particular types of expertise, particular types of knowledge. That knowledge is not necessarily what the client wants or what is in the interest of the client, and it’s not able to help the client necessarily.
Historically, we have seen that the kinds of advice that the consulting companies offer do tend to support a kind of economics or a very narrow type of economics that rolls back the state in the economy or tries to shrink the state in certain areas of the economy that supports the growth of businesses. And that’s not surprising, right, because again, this comes back to the democracy issue. The biggest clients of the consulting industry are obviously in business or in kind of big business, fossil fuel companies, pharmaceutical companies, financial services.
So it’s not necessarily surprising that there is a conflict in their interest when they’re advising governments, for example, in economic policy, that they want to perhaps protect the kind of economic status quo that enables the growth of these companies that are their biggest clients.
The Mint: And to write this book, you’ve talked to a lot of people, didn’t you? To learn about specific examples, incidents, happenings. I wondered, of all the things you’ve learned without I suppose any names or whatever, just what was the most horrifying, striking sort of example that you came across that you felt sort of illustrated the problem?
Rosie: Good question. So in academia, we often will use interviewing as kind of a research method. For this book, we used interviewing mostly as a way of helping us to tell their story, right? So we weren’t using it necessarily as a research method but as you say, to get these cases, get these examples. We interviewed some people from the labour movement in the United States, so from AFL, CIO and the Machinist Union or the Machine Workers Union, which is the people who are working in aerospace, for example.
I think I was very surprised to realise from speaking to them how often they are confronted with analysis that has been done by the consulting industry when they are for example, at the bargaining table of collective bargaining agreement or a labour dispute. So they told us that sometimes they will sit down with the managers who they’re negotiating with, and they’ll be given a report that is done by one of these companies. And it can be very hard for them to unpick some of the models that they’re doing or that exist in these reports because they don’t have access to the assumptions and actually neither do the managers.
So it was quite interesting to learn because there isn’t really any academic literature on this. It was very interesting to learn how they used in labour disputes as well.
The Mint: Wow. So they’re used to sort of outgun effectively the Labour side and reduce their ability to negotiate for their members.
Rosie: At least that’s how the people we spoke to definitely seem to view it. And there are cases that we include in the book where that seems to have been the case as well.
The Mint: Fascinating. You also cover the whole Covid 19 period quite extensively, don’t you? Where the growth of consultancy input seemed huge though may be easier to justify given the crisis and the need for sudden extra government resources.
Rosie: This is a great question because as we also say in the book, we don’t argue at any point that government should ever try to do anything completely by themselves. Governments exist in this kind of completely evolving context where political and social needs change all the time. So there’s always new challenges that they have to confront, and so they’re going to need to work with other people, other actors in order to overcome them.
The Covid issue obviously brings this to the fore because there was a crisis that governments around the world obviously were not prepared for, regardless of whether they should have been more prepared, they were not prepared for it. And so there was not the capacity necessarily to meet this challenge internally. So of course they needed to look to other actors to help with this effort, even though citizens and businesses were turning to governments to be the kind of responsible actor. Of course, governments then also needed to work with other organisations, businesses.
But the question then is, were these consulting companies that were contracted to, for example, manage the vaccine rollout in France or help develop parts of the test and trace programme in the United States, or do similar things in the UK, were these companies the ones that were best placed to do this? And I think the answer in many cases was no. Or at least there wasn’t really any evidence that would suggest that they were. And so why were they then used, kind of opens up these bigger questions that we tried to explore in the book?
The Mint: So now as you say, government and big business even has been infantilized, they’ve sort of outsourced their brains to these consultancies. Is there any way back? I mean, can the genie be put back in the bottle?
Rosie: Absolutely. We are seeing good examples of countries that have recognised that their governments are over-reliant on the consulting industry and they are trying to do things to overcome that. I think even just yesterday, I didn’t read the article, I only read the headline. But just yesterday, I saw that the Canadian government has decided to cut its spending on consultants. I think it was only by 15% but that’s still part of recognising that there is an issue.
The Australian government is, or the Australian Senate is currently undertaking an inquiry that we’ve also been invited to submit to on the government’s use of consultants. So trying to think about how do we reduce use of consultants. Now obviously if you have a government that have become dependent on consultants or different departments that have become dependent on consultants, then there might be an issue if you just say, “Right, we’re going to stop using them,” overnight because they’ve kind of become quite central to the organisation, almost parasitically. What we describe, another kind of metaphor we use in the book.
So in that case, we then have these other programmes that governments can develop. So for example, setting up an in-house public sector consultancy, which has been quite successful in countries like Denmark and Germany, which helps to ensure that there is not this kind of capacity deficit in the short term. Longer term, that’s not the solution, longer term because these solutions, these issues that we unpick in the book are systemic we need systemic solutions.
This is about how we run the economy. What the role of government is. How government works with other organisations and business. Particularly, I think we need to rethink how government relates to the labour movement and other kind of organisations that are not necessarily in business. It’s also about then investing in the public sector because we recognise that public sector and governments do have a role and will have a role in many parts of the economy for years to come. People want them to play a role in the climate crisis or in pandemic prevention and pandemic responses, for example, just to name a few things.
So then we do need to be investing in this kind of public sector with its expanded remit perhaps or recognised remit of what it’s actually kind of there to do. So there are a few things that we suggest in the book for how governments can meet those objectives.
The Mint: And what about the consultancies themselves? How have they responded to this book?
Rosie: We haven’t heard much from them. We did initially have a letter in response from the Management Consultancies Association, which is the UK industry body that represents all the management consulting firms or the big management consulting firms and some others. So after Mariana did an interview with the Financial Times, they wrote a letter to the Financial Times in response challenging it. It was pretty standard. Everyone’s welcome to go and read it.
And then we haven’t heard much from them apart from that, when we have been invited to go on particular media outlets where they have a required right of reply, that the companies have refused to engage with the platforms and so we are then not able to do the interviews that we were set up to do. So they do know about the book, they’re just not engaging with it, which I think is quite interesting.
The Mint: So that, wait a minute. So people like the BBC can’t interview you because they can’t get get anyone to reply, is that right?
The Mint: Or is it-
Rosie: No, it depends on the programme, but yes, exactly. So if we were discussing the book specifically, there would need to be kind of a response or involvement of consulting companies as well.
The Mint: … But they won’t do it so you can’t. That is extraordinary. I wasn’t aware of that. And what about politically? I mean, what about the Labour opposition? Do you think this is on their radar at all?
Rosie: I think it’s on their radar. I think the Labour opposition personally should be also thinking a bit more about what happens inside government. I think setting ambitious goals is one thing, and it’s an important thing and it’s great to see that Kiera has adopted these kind of missions or whatever. But more fundamentally, we also have to look at what is happening inside the apparatus of government and how it’s actually able to meet these goals.
Because if we don’t do that, if we don’t consider these kind of potential issues that might arise from relying more on outsourcing, for example, then we will are likely to see more of the same thing. That can, in the long term, undermine the ability to meet these kind of social goals that the Labour Party might have.
The Mint: Well, maybe hopefully Sue Gray’s reading the book.
The Mint: She presumably will have a view on that from her experience and the work in government.
Rosie: I mean, it’s been, the response to the book I think has been amazing. We’ve been very happy and glad to receive still daily, we’re both of us receiving messages from people who work in governments around the world, but also within consulting companies or former consultants who are getting in touch with us and saying, “This is exactly my experience.” I don’t want to say that’s a representative sample. Obviously that’s a self-selected group of people who were getting in contact with us, but the book is nonetheless resonating.
The Mint: Brilliant. Well thank you very much, Rosie. And it’ll be really interesting to see where this debate goes over the coming months and years indeed.
Rosie: Hopefully. Thank you very much. No, thank you. It’s been a nice interview.
The Mint: Thank you.