Management consultants plan to cash in on public sector spending cuts

CONSULTANTS are gearing up to advise public sector bodies on how to meet tough new government efficiency targets, prompting fears that the taxpayer may be hit by soaring fees.

New Accenture Scotland boss Bill McDonald said the expected cutbacks would throw up a lot of opportunities as the public sector grappled with tighter budgets.

But politicians have expressed concern that the cutbacks will lead to more bills to pay consultants' fees. The debate has freshened as the Liberal Democrats revealed recently that the taxpayer in the UK had paid 1.7 billion on consultants' fees in the past six years.

McDonald, who recently succeeded Trevor Hatton as managing director of Accenture Scotland, told Scotland on Sunday that inevitable spending cuts to reduce Britain's 160bn-plus deficit were likely to make the Scottish public sector more receptive to outside solutions.

McDonald said: "The public sector is facing unprecedented cuts over the next three to five years at a level not seen before. I believe that will make people more receptive to new ideas when they are looking at different challenges.

"The reality of the situation is that Accenture do not have the presence in the public sector in Scotland that we do in the rest of the UK. It is a slow burn to establish it, but I think they (public spending constraints] will absolutely throw up opportunities to add value."

McDonald, who has worked for the consultancy since 1998 and who was with Scottish Hydro Electric for 14 years before that, said management consultancies could help the public sector against the backdrop of new economic realities.

He said he had recently attended a conference of the Scottish Council for Development and Industry and was "surprised and encouraged how receptive everyone was to the fact that the status quo (in the public sector] cannot continue".

"There is a growing awareness and acceptance that the public services will have to be delivered to the same high quality but much more efficiently."

However, some critics expressed reservations about management consultants taking a significantly bigger part in public sector work this weekend. Jeremy Purvis, the Liberal Democrats' finance spokesman in Scotland, said he believed public sector managers needed to be taking the lead in meeting draconian efficiency targets after the election.

Purvis said: "I don't think that's necessarily a bad thing. It only becomes bad if there's not a culture of reform in the public sector in Scotland. We think there must be a radical rethink in the way public services are delivered."

He said it was "not an either-or situation" as regards Holyrood and other public bodies using management consultants. Purvis added: "In some instances, private consultants can achieve this. But I think it is preferable that senior managers in the public sector deliver differently and more cheaply."

It comes as McDonald also said Accenture wanted to broaden the group's private client base in Scotland away from its traditional heartlands of the oil and gas and financial sectors into new areas where it was under-represented.

The company, which has 180,000 employees in 50 countries, employs nearly 400 in Scotland, including 250 in Aberdeen, with smaller offices in Edinburgh and Glasgow.