New Labour Goes Consulting Crazy

When the Labour Party were in opposition, they lambasted the ruling Conservative government for spending up to £500m a year on management and IT systems consultants. This was, they thundered, “a disgraceful waste of taxpayers’ money – money that should be spent on frontline services like hospitals and schools” rather than being handed over to a few already wealthy consultants. Now New Labour are in power, they seem to have changed their minds. However, New Labour have not just spent a mere £500m a year on consultants – they had much more ambitious plans than that. In their grand plan to modernise the delivery of public services, they seem to have sidelined the Civil Service and have decided to both make their new policies and implement them using their favourite management and IT systems consultants. This is turning out to be an expensive exercise – it will cost us, the taxpayers, well over £70bn – more than £20bn for management consultants and at least another £50bn for IT systems consultants

The vast amounts of taxpayers’ money being handed over to consultants could be seen as evidence of a dynamic, forward-looking government investing in modernising their country. At least, it would be positive were these massive investments successful. However, experience to date is less than promising. Judging by what has happened, New Labour’s investments in management and IT systems consulting appear to have just been a series of unmitigated and shameful disasters. So bad was the situation, that in an all-party committee of MPs criticised the British Government for both wasting taxpayers’ money and trying to cover up the truth about its financial mismanagement. The committee concluded that the British Government’s record on IT consulting projects was ‘an appalling waste of public money which Whitehall was trying to conceal behind a cloak of commercial confidentiality’. There have been so many disasters like the Child Support Agency – £1bn wasted on consultants, the National Offender Management Service – about £300m wasted and the Ministry of Defence – at least £500m spent on consulting that gave absolutely no results. The most shameful project of all must be the new NHS IT system which was planned to take 3 years to complete and cost just £2.3bn – it will actually take over 10 years, will cost over £12bn and won’t even work properly.


Management and IT systems consultancies are businesses. As businesses, their aim is profit maximisation. This means they must try and sell as much of their product as they can at the highest price possible. Just like any other business – manufacturers of soft drinks, breakfast cereals, photocopiers, paperclips, cars, burgers, cigarettes or whatever. When you sell management or IT systems consulting to another commercial company like a bank, insurance company or an oil company, you are playing a commercial game, where you both know the rules. You try and get as much of their money as possible by thinking up all kinds of ‘essential’ services and new IT systems you can sell them and you charge them as much as you think you can get away with. As everybody knows, that’s how business works. And anyway most banks, insurance companies and oil companies are hugely wasteful bureaucracies that have more money than they know what to do with.

However, having spent over twenty years selling consulting to many companies and government departments, I believe that this situation changes when a profit-maximising company like a consultancy sells its services to public sector organisations. Because here, every hundred million that is channelled into management and IT systems consultancies’ pockets means a hundred million less that can be spent on providing essential services in areas like health, defence, schools, social services and police. So if a management consultancy knowingly sells a project where it places twenty to thirty to forty inexperienced consultants in some government department or other, when two or three experienced consultants could have done the project more quickly and much more cheaply, you have to ask whether this is just nifty business or whether the consultancy could be accused of unethical practice. Similarly, if an IT systems consultancy manages to convince a government department that it should spend say £400m on building a completely new IT system, when it knows that an existing system could have easily been upgraded for less than £40m – is this just a case of the consultancy being canny businessmen or is it closer to theft of public funds? Moreover, if these consultancies also systematically overcharge the Government for their consultants’ time, bill for fictitious administration, charge the Government the full cost of travel expenses while retaining kickbacks from travel companies and make the Government pay for time consultants and their managers spend on internal consultancy activities – again the question, is this merely smart business or a fraudulent rip-off?

There is another dimension to the moral issues arising from how consultancies work in the public sector. If a consultancy or systems provider fails to achieve the promised results for a private sector company, nobody really gets hurt. But if inexperienced junior consultants set meaningless targets for the health service which lead to ward closures and less patients being treated. Or if consultancies produce IT systems fiascos for government departments that prevent people from travelling due to them not having passports, that leave over 176,000 immigrants stuck in limbo for months because their applications cannot be processed, that prevent courts prosecuting criminals, that cause families to lose their homes or that impoverish hundreds of thousands of low income households, then it seems reasonable to question the ethics of consultancies that are happy to take the cash and yet are seemingly impervious to all the suffering caused by their incompetence and greed.


At a dinner recently, I was sitting next to a gentleman who shall remain nameless. He had a knighthood and at various times had been a professor at a leading business school, a director of the Bank of England, a former member of the Cabinet Office Central Policy Review Staff (the ‘Think Tank’), a director of the Treasury and a director of a major bank. I started talking to him about my concerns over the amount of taxpayers’ money being handed over to consultants and the series of catastrophes that had ensued. I then suggested that the Government was being taken for a very expensive ride by its consultants. The gentleman looked disdainfully at me and said dismissively, ‘I find your arguments fallacious and lacking in intellectual rigour – the people at the Treasury and the Bank of England are not stupid’.

Having seen so much consultancy sold to so many government departments yielding so laughably little in the way of results, I’ve written a book to tell the story of what really happens when management and IT systems consultants are paid to bring their magic into public sector organizations. Now taxpayers can make up their own minds about the gumption or otherwise of the people at the Bank of England, the Treasury and the 2,500 other government departments who are contributing so generously to the welfare of already wealthy management and IT systems consultants by giving them almost unbelievable amounts of our money.

David Craig has spent 20 years working for some of the world’s best and worst management and IT systems consultancies. He is the author of two books about consultants – “Plundering the Public Sector” (Constable 2006) which exposes how the British government has wasted tens of billions on consultants and “Rip-Off! The scandalous inside story of the consulting money machine” (OBC 2005) revealing how consultants siphon money off from their business clients. He has also written “Squandered: How Gordon Brown is wasting over one trillion pounds of our money” (Constable 2008) and “Fleeced! How we’ve been betrayed by the poli

ISO 9001 Consultant – FAQ on Selecting and Using an ISO 9001 Consultant

1. What are the benefits of using an ISO 9001 Consultant?

Companies hire consultants for different reasons. They may not have the specific expertise, time, experience, or objectivity to perform the QMS development work without outside assistance. A quality management system (QMS) consultant will:

Be able to close the knowledge and resource gap;
Add experience and insight to your QMS project,
Significantly accelerate your success for certification, by preventing any serious mistakes in QMS development and implementation.
Fast-track the development process by effectively planning, getting management and organizational support and ensuring adequate resources.
Organize and facilitate project deployment and avoid or resolve problems.
Save time and money by developing an effective QMS, that realizes benefits early and therefore get faster payback on your QMS project investment.
Remember that that it is better to have your personnel do the hands-on development work under the guidance and expertise of the Consultant. This ensures that QMS ownership stays within the organization.

2. What services would a QMS consultant provide?

A competent consultant should be able to plan, organize and facilitate the QMS project activities, interpret how the QMS standard applies to your organization, help identify and document your applicable processes, recommend process improvements, introduce benchmark practices, impart customized on-site training to the various functional levels within your organization, and conduct internal audits. He/she may also help you develop the entire documentation, depending upon the internal resources you have available to you.

3. What credentials should a QMS consultant have?

You must be very careful in checking out the consultant’s credentials. The following list of criteria may be useful in making this evaluation:

Education: As you are implementing a management system, you need a consultant with a management system background. A good quality management system consultant should at least have college level education and preferably a graduate degree. Majoring in management sciences would be a bonus.

Training and professional development: Does the consultant hold (or had) Lead Auditor certification through RAB/QSA, IRCA or similar recognized organization?

Does he/she have sector specific training and specialization in sectors such as automotive, environmental, aerospace, telecommunications, health and safety, etc.,

Has he/she written books, written courses, published articles, spoken at quality conventions and seminars, manage a QMS website or moderated a management system forum?

These trade related specialized credentials and activities demonstrate the investment that good consultants makes towards sharpening their skills and experience.

Experience: have at least 10 years of Consultancy experience in a variety of industries and more importantly, relevant experience in your specific industry sector.

Personal traits: you need a consultant with good interpersonal and communication skills; who is objective, pragmatic, perceptive, tactful and flexible in dealing with personnel at different levels of an organization.

Availability and access: the consultant should be able to provide the consulting time (days) that you need within the budget and time-frame you have and be reasonably easy to contact when needed.

Fees: what should a consultant cost? Rates vary and low daily rates does not necessarily get you the best results and cost in the long run. Look at costs from different angles – per day; per deliverable (e.g., training course); flat rate for the project; payback on the project, etc.

Remember, a good consultant will get things done more efficiently and help you develop an effective QMS that begins to produce results more quickly, saving you money. So look at consultancy cost from an overall result-oriented perspective.

4. Where do I find a good consultant?

There isn’t a single comprehensive source or listing of consultants, so try the following:

- Do a localized search on Google or Yahoo.

- Contact a couple of Certification Bodies. They will generally provide a short list of consultants available in your area, to avoid any conflict of interest.

- Through referral from customers, suppliers or other organizations or contacts who have used and were happy with the work done by their consultant.

- Professional and trade associations; such as the ASQ

- Leading management system publishers such as Quality Digest provides an annual directory of Consultants on their website.

- Quality management instructors; There are many good instructors that also provide consultancy services.

Use the credentials from point 3 above, to evaluate the selected consultants. Make sure you check references and perhaps arrange for the consultant to visit your organization and meet with you and key personnel. This would be a good way to size up the consultant against the criteria.

5. Can getting RFP’s (request for Proposals) from ISO Consulting firms help in the selection process?

Pick a short list of 2-3 consultants and request proposals from each of them. Their proposal should cover the service deliverables; number of consultancy days and over what time-frame; consultancy and training methods; fees and expenses; contact and reporting. This provides a consistent basis for evaluating them.

Your management team should evaluate the proposals using the defined credentials criteria from step 3. You want the management team to participate and support the selection decision, so the consultant can work effectively with your organization.

6. Do we need to have a signed agreement?

Clarify and confirm all proposal details. Negotiate any terms to your satisfaction, including fees and expenses. Consultants are always eager to win new business. Get the final agreement signed by both parties. This is now legally binding and provides clarity on the deliverables and contractual terms and should facilitate a smooth on-going relationship between the consultant and your organization.

7. How should we manage the Consultants activities?

All outsourced work, including an expert ISO 9001 consultant needs to be managed. Ensure that the primary contact and reporting requirements are clear and understood by both parties. Regular project and milestone/deliverable reviews must be done with the consultant and ensure any issues or misunderstandings are promptly resolved.

8. How should we evaluate the consultants performance?

When the project is completed, evaluate the consultants performance by asking the following questions:

- Were the project deliverables acceptable and on time?

- Were deliverable results in line with the objectives?

- Did the consultant do a good job of planning? And was the plan followed without significant changes or delays?

- Were communication and reporting requirements met?

- Did the consultant effectively transfer QMS ownership to the organzation’s personnel?

- Are benefits of QMS clearly beginning to be realized from