When the Labor Party objected, it lashed out at the ruling Conservative government for spending up to £ 500 million a year on IT systems and management consultants. This was, they thundered, “a shameful waste of taxpayers’ money, money that should be spent on front-line services like hospitals and schools” rather than being handed over to a few consultants who are already wealthy. Now that New Labor is in power, they seem to have changed their minds. However, New Labor has not only spent £ 500 million a year on consultants, it had much more ambitious plans than that. In their grand plan to modernize public service delivery, they seem to have bypassed the Civil Service and decided to both formulate their new policies and implement them using their favorite IT and management systems consultants. This is proving to be an expensive exercise: it will cost us taxpayers over £ 70 billion, over £ 20 billion for management consultants and at least another £ 50 billion for systems consultants. YOU.
The large amounts of taxpayers’ money turned over to consultants could be seen as evidence of a forward-thinking and dynamic government investing in modernizing its country. At the very least, it would be a good thing if these massive investments were successful. However, the experience to date is not promising. Judging from what has happened, New Labor’s investments in IT systems and management consulting appear to have been simply a series of unmitigated and embarrassing disasters. So bad was the situation, that in an all-party committee, MPs criticized the British government for wasting taxpayers’ money and trying to cover up the truth about its financial mismanagement. The committee concluded that the British government’s track record on IT consulting projects was “an appalling waste of public money that Whitehall was trying to hide behind a cloak of commercial confidentiality.” There have been as many disasters as the Child Support Agency – £ 1 billion wasted on consultants, the National Offender Management Service – around £ 300 million wasted and the Ministry of Defense – at least £ 500 million spent on consultancy that did not give absolutely no results. The most embarrassing project of all must be the new NHS IT system, which was planned to take 3 years to complete and cost just £ 2.3 billion; it will actually take over 10 years, cost over £ 12bn and won’t even work properly.
IT IS A MORAL PROBLEM, NOT JUST MANAGEMENT
IT systems and management consulting are business. As businesses, your goal is profit maximization. This means that they should try to sell as much of their product as possible at the highest possible price. Like any other business: manufacturers of soda, breakfast cereals, copiers, paper clips, cars, hamburgers, cigarettes or whatever. When you sell IT systems or management consulting to another business company such as a bank, insurance company, or oil company, you are playing a business game, where you both know the rules. You try to get as much of their money as possible by thinking of all sorts of ‘essential’ services and new IT systems that you can sell, and you charge them for whatever you think you can get away with. As everyone knows, this is 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.
However, having spent over twenty years selling consulting to many companies and government departments, I believe this situation changes when a profit-maximizing company, such as a consulting firm, sells its services to public sector organizations. Because here, every one hundred million that is channeled into the pockets of management consultancies and computer systems means one hundred million less that can be spent on the provision of essential services in areas such as health, defense, schools, social services and police. So if a management consulting firm knowingly sells a project in which it places twenty to thirty or forty inexperienced consultants in some government department or another, when two or three experienced consultants could have completed the project faster and much more. cheap, you have to wonder if this is just a nifty business or if the consultancy could be accused of unethical practice. Similarly, if an IT systems consultancy succeeds in convincing a government department that it should spend, say, £ 400 million to build a completely new IT system, when it knows that an existing system could have been upgraded easily for less than £ 40 million, is this just a problem? Should the consultancy be astute entrepreneurs or is it closer to stealing public funds? Furthermore, if these consultancies also systematically charge the government for their consultants’ time, they bill for a fictitious administration, they charge the government the full cost of travel expenses while withholding commissions from the travel companies and making the government pay for the time that consultants and their managers spend on internal services. Consulting activities: again the question: is this simply a smart business or a scam?
There is another dimension to the moral issues that arise from how consultancies work in the public sector. If a consultancy or systems provider does not achieve the promised results for a private sector company, no one is really hurt. But if inexperienced junior consultants set nonsensical goals for the healthcare service that lead to wards closing and fewer patients being treated. Or if the consultancies produce failures in the computer systems of government departments that prevent people from traveling because they do not have passports, that leave more than 176,000 immigrants trapped in limbo for months because their applications cannot be processed, that prevent them from courts prosecute offenders, causing families to lose. their homes or that impoverish hundreds of thousands of low-income households, then it seems reasonable to question the ethics of consultants who are happy to take the cash and yet are seemingly immune to all the suffering caused by their incompetence and greed.
TREASURE PEOPLE ARE NOT STUPID
Recently, at a dinner party, I was sitting next to a gentleman who will remain anonymous. He had a knighthood and, on several occasions, had been a professor at a major business school, a director of the Bank of England, a former member of the Central Policy Review Staff of the Cabinet Office (the ‘Think Tank’), a director of the Treasury and director of a major bank. I started talking to him about my concerns about the amount of taxpayer money being given to consultants and the series of catastrophes that had occurred. So I suggested that their consultants were taking the government for a very expensive trip. The gentleman looked at me with disdain and said with disdain: “I find your arguments fallacious and lacking in intellectual rigor; the people of the Treasury and the Bank of England are not stupid.”
Having seen so much consulting sold to so many government departments performing so ridiculously in terms of results, I have written a book to tell the story of what really happens when IT systems and management consultants are paid to bring their magic to the public sector. . Organizations. Now taxpayers can make their own decisions about the common sense or not of the folks at the Bank of England, the Treasury, and the 2,500 other government departments who are contributing so generously to the well-being of the already wealthy IT and management systems consultants by giving them almost incredible amounts of our money.