2. japanese uncle said...

This is how they secure jobs (in the consulting industry) after they are ousted from the government. Rotten to the core.

4. shipbuilder said...

But aren't these contracts to be awarded to private sector management consultants? A decent management consultant should be able to make 10 times (at least) their salary in annual efficiency savings.
This is only really a waste is the management consultant doesn't do their job - in the efficient, value-adding private sector that shouldn't happen, should it?

6. montesquieu said...

@ paul

this is complete nonsense, and the tories are playing politics with this in the knowledge that the great mass of people are as ignorant as you on the topic. The term 'management consultant' can be all sorts of things from strategy advisor to an applications developer. Accenture for example may be a management consultancy but they also provide all sorts of outsourced services, frequently much more cheaply than can be done in-house. Why take a specialist applications developer on they payroll at great expense (not least in pension) when you can hire three months of his time instead? It was the tories which started this trend and I guarantee it won't stop - it makes too much sense.

cut back a little on the consultancy equivalent of telephone sanitisers perhaps, but much of the work that they do is quite sensible and it's a cheap shot at an ill understood (and therefore easy) target.

btw accenture don't do the NHS any more they sold their stake in it to CSC (quite an outsider in UK govt circles).

8. britishblue said...

I don't disagree with the comments here. Because each has a point.

I have a further point to make. A friend of mine is an ex management consultant who regularly earned in six figures ten years ago. Because of changing circumstances he now runs an man and van business. He undertakes some work for the council. He related a story of waste to me the other day. A women in her mid 20's was being moved by the council. She had already had her belongings moved to a new flat (paid for by the taxpayer), but still had her cooker and washing machine in her old flat. The council hired my friend and another man to move them. When they got to the flat, the women who was due to be moved was there, a lady from the council was there to 'supervise' and also an electrician and plumber. The plumber was there to disconnect the water from the washing machine and unclip it, the electrician was there to take the plug of the back of the cooker and washing machine for 'safety'. The lady from the council also asked my friend if he could take a television bracket of the wall. He couldn't because it had been put in with a drill. She said that was no problem she would send someone else round to do it. (at more cost). My friend moved the cooker and the washing machine to the new flat. The girl who was moving to the flat smoked away, watching with her boyfriend all of the time. When they got to the new flat, the electrician turned up and put the plugs back on and the plumber reconnected the washing machine. I also noticed a totally new fridge freezer had been delivered. The council lady was having a meeting with the girl in the flat explaining how she could apply for greater benefits.

And another short story. Where my little girl used to go to school, there are parking metres. Because it is a good way out of the town, they are rarely used and just there for revenue purposes. It is a culdesac and there seem no reason why they should be metred. However, the one time of the day the traffic warden visits and hides behind trees is the school collection time, with the aim of catching anxious parents who have arrived late for school. I think a private compnay may have bought the rights to undertake this service, but the revenues one way or another go to the council.

These are live practical examples of where things are going wrong in the public sector.

10. shipbuilder said...

Paul - perhaps you're right, but this still looks like a cheap shot from the Tories - when private companies (the experts at efficiency, remember) want to save money, they outsource to an expert, or when they want to improve efficiency, they bring in a consultant and employ Six Sigma or lean, or whatever. Yet when the public sector does the same, they are crucified for wasting money. If they created the job in-house, they would be crucified for wasting money. What would the howling masses have them do? Just sack people? Would that change wasteful processes or get rid of red tape?
In my years as a Six Sigma Black Belt, I regularly made annual savings of 20-40 times my salary (salary wasn't great, admittedly) - that was normal. If the public sector is to be reformed, that is the way to do it.
You've also highlighted another point I was making in your final paragraph - that the private sector (private=better, remember) consultants then take the p*ss and do a rubbish job. Is that also the fault of the public sector? How should that be addressed in the great public sector reform?
We are all experts in public sector waste - yet if we were employed to point out the waste and correct it, that would be seen as more jobs for they boys - so what to do?

12. paul said...

Okay, well in answering your question shipbuilder, lets separate the people who 'manage' the people doing the work on the technology side, and those who actually do the work. Management consultants (MCs) typically deal with strategic issues and cost £1k per day upwards. Technical consultants (aka contractors if they come from an agency rather than an integrator typically cost £400 per day and upwards.

If you don't set a proper brief for the management consultants, and get them fixed price and listen to them and choose the right type of assignment where there's real potential to delivery tangible benefit you'll usually get lousy value. Unfortunately the Public Sector isn't great at any of this, so.... Conversely if you paid £100k for 100 days work and got £250k in benefits most people would be rather pleased.

The public sector is generally heavily constrained in its freedom to recruit the headcount needed and the level of competency needed. So it has to out-source to tech consultancies to meet the demand for resources and it often has to buy in skills to compensate for lack of technical competency (£35k is really not going to buy you a top end ORACLE DBA).

Now monty reckoned that in house is always more expensive for public sector but that ignores the fact that generally for the tech consultancies, the people who will end up actually doing the technical delivery won't be employed by the consultancy, so their expertise (if they have some) won't be retained at all. If the system needs an upgrade the year after next, a new person will need to be hired to make sense of the code (assuming it was well written in the first place which it often won't have been).

What is actually happenning then is that these systems are being produced by the lowest bidder who will then subcontract it out again to the lowest bidder who will then outsource it to a couple of guys who don't speak English that well but have read a book on Java and are willing to work for £7 an hour if they can get visas to come to the UK to get SC clearance, so game on.

It comes down to laziness. Like most large companies a favourable decision depends on it being the best decision for all concerned and the easiest decision for all concerned. By tossing ill-conceived requirements specifications the way of private sector tech companies, that is what the taxpayers get - lowest common denominator systems built by the cheapest bidder.

So how could we escape this lamentable state of affairs? The untying of management hands during recruitment would be a start. The public sector should take more responsibility for its remit from the taxpayer by hiring in some expertise to make sure that the private sector tech companies weren't riding the public sector on change management, taxpayers would save and get a better system. Up front costs are higher but overall costs are lower and therefore cost savings are greater.

That's why its not altogether a cheap shot by the tories, but the route to the answer is neither cheap nor easy. So don't expect the tories to do any better ;-D

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