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How consultancy bleeds Britain dry

In The Big Con Mariana Mazzucato and Rosie Collington reveal how management consultants promise to fix governments but end up enfeebling them.

By Will Lloyd

When I was reading Mariana Mazzucato and Rosie Collington’s The Big Con, I kept thinking about crabs. Specifically, what happens to a crab when they meet Sacculina carcini, a genus of barnacle commonly found in the Eastern Atlantic Ocean. Most barnacles are content with being peacefully stuck to rocks, where they filter food from the water around them. Sacculina carcini, on the other hand, are roving parasites.

When the microscopic female larva of Sacculina finds a crab, it injects itself, like a hypodermic needle, through a vulnerable chink in its host’s exoskeleton and into its bloodstream. Sacculina makes her home inside the crab, spreading investigative feeding tubes around its body. As Sacculina redecorates, the crab weakens. Sacculina castrates the males, or replaces the female’s reproductive system with its own. When a male parasite arrives and fertilises her the process is complete. The crab’s new evolutionary function is as a parasite generator. It will defend the fresh Sacculina brood as if they are its own offspring. The crab’s survival is of no consequence.

Though Mazzucato and Collington, both academics, are too polite to say it, the relationship between a crab and Sacculina is like that between governments and the consulting industry. The consultants may have different names (McKinsey, Boston Consulting Group, Bain & Company, PwC, and Deloitte) and might perform different economic functions (as, for example, strategy firms or accountancies), but the effect they have on their client organisations is the same: to entrench short-term thinking, to deplete them of knowledge and skills, and, ultimately, to enfeeble them. Meanwhile, the barnacles – sorry, the consultants – only gain in strength. (In 2021, Mazzucato and Collington write, “estimates of the global consulting services market ranged from between £525bn to £674bn”.)  

In the simplest terms: governments and businesses pay consulting firms to do things that the consultants claim to be better at doing than their clients. Globally, the consultants’ responsibilities are as wildly varied as the East India Company’s once were in the 19th century. In recent decades, the biggest consultants have been hired to develop smart cities, dream up national net-zero strategies, initiate education reforms, counsel armies, write tax legislation, construct hospitals, outline medical ethics codes, and manage the digital infrastructure of countless governments and large corporations. The more that governments and businesses outsource such responsibilities, the less they know how to do. They become “stuck in time and unable to evolve”. The relationship is parasitical.

Even if the consultants were any good at all of this, it would still be troubling. (Who exactly is Serco accountable to when it is tasked with running critical parts of UK infrastructure?) But as Mazzucato and Collington demonstrate, at times in exhausting detail, consultants are often bad at what they do: incompetent, unimaginative, sloppy, arrogant, gaffe-prone. They are not necessarily morally bad – nobody mismanages the merger of some pharmaceutical companies for kicks – they’re just far less expert and efficient than they claim to be.  

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“The history of modern consulting,” write Mazzucato and Collington, “is the history of modern capitalism.” The macro-narrative of The Big Con, then, is a familiar one. Watch the power of parliaments and congresses melt away after the 1970s. Shed a tear as privatisation, management reform, financialisation, outsourcing, digitisation and austerity reorder the global economy to the exclusive benefit of distant shareholders and greedy billionaires.

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The authors call it a “dark picture”. In fact, it’s a bitterly dystopian one. Over the past five decades, active government deteriorated into hands-off “governance”; citizens became glorified consumers of government services; politicians ceded their responsibilities to unelected technocrats, regulators, and the management consultants. When you consider that the response of voters to these complicated socio-economic dysfunctions was to elect reality TV stars (Donald Trump), chancers (Boris Johnson) and people who really enjoy taking selfies next to mounds of polenta (Matteo Salvini) to solve them, the picture then becomes an absurd tragedy. Confronted by an earthquake, voters sent in the clowns to clear the rubble.

Crisis suits the “consultocracy”. Their big bang moment came in the 1970s, a decade that ended with the arrival of Margaret Thatcher and Ronald Reagan, who promised to make their bloated states as nimble as businesses. “Their reforms,” note Mazzucato and Collington, “neither led to a significant shrinking in public spending, nor to increased competition in key industries in the long term.” But the consultants flourished. In 1979 the British government spent £6m on their services every year. After 11 years of Mrs Thatcher, “the amount was 40 times greater at £246m”.

In the 1990s, when, as far as I can tell, it was possible to call the Third Way guru Anthony Giddens a “philosopher” without being laughed out of a seminar room, the consultants deepened their influence on both sides of the Atlantic, while expanding their influence in new territories across the world. Giddens embodied the moment. He called for governments to transcend old left-right divisions and embrace supposedly pragmatic fusions between the best practices of the public and private sectors. Like quite a few things in the 1990s that seemed great at the time – Oasis, Arsène Wenger, private finance initiatives, Will Self, the Weinstein Company and Giddens himself – the Third Way was a dead end.

Management consultants loved it though, and came to epitomise the Third Way as much as Tony Blair and Bill Clinton did. If the times were seemingly apolitical, then so was McKinsey. If history was over, then the relatively new profession of management consulting was weightlessly ahistorical.

Consultants were the perfect, sexy foot soldiers for the Third Way agenda. They dazzled public sector apparatchiks everywhere with Giddens-like buzzwords and strategies. They recruited graduates from the best universities in the world: gold-star pupils who never put a risk-averse foot wrong. Consulting guaranteed these graduates large salaries and global travel opportunities. That they rarely had direct experience of the industries they were parachuted into as consultants didn’t matter. There was nothing consultancies and, increasingly, governments believed that a combination of elite academic credentials and technocratic fixes couldn’t solve. “By the end of the millennium, few countries in the world had been untouched by the consulting industry,” Mazzucato and Collington write.

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Flash forward a couple of decades and we can see the consultants for what they were, and always have been: Sacculina carcini. The most disturbing moments in The Big Con come in the aftermath of crises: the 2008 financial crash; the Brexit vote; the Covid-19 pandemic. In each event the UK government was weakened and the barnacles proliferated. Their advice sounded harmless. After 2008, consultants implored several European governments to “create competitive conditions in the provision of services” by hiring more… consultants. After Brexit, they targeted profligate departments such as the Home Office, which increased consultancy spending by 788 per cent from 2017 to 2020, with contracts dealing with “security, immigration and border preparations for leaving the EU”. Consider the state today of the UK’s security, immigration and borders, and then wonder what came from all those consultancy fees.

While the wider economy was pulverised during the pandemic, the UK consulting industry grew. Deloitte gained extensive contracts in the NHS’s Test and Trace programme: the firm was hired to “support the creation and expansion” of the scheme, from assembling digital booking systems to organising drive-through testing facilities. Test and Trace cost billions, including hundreds of millions spent on consultancy, and yet, as parliament’s Public Accounts Committee found, did not achieve “its main objective to help break chains of Covid-19 transmission”. One anonymous source who worked in the pandemic response during 2020, interviewed by the authors, recalls projects that had “loads” of wandering consultants, many of whom spent their “time asking really basic questions that we had to respond to, taking our attention away from actual work”.

Elements of the British state that relied on the consultants became “infantalised”, according to a leaked letter written by the Conservative Cabinet Office and Treasury minister, Lord Agnew. This was the cumulative effect of four decades of consultants working with the British government. How do the consultants keep getting away with it?

One answer is that the work that management consultants do is dull. It’s opaque, behind the scenes, complicated. It is not memorable. I was motivated (paid) to read The Big Con and it nearly put me to sleep several times. The weakness of the book is its subject’s greatest strength: it doesn’t excite much interest. Management consultancies do not deserve the influence over public life that they enjoy, nor to profit from it as richly as they do.

There is hardly an aspect of our lives that is not affected by them: they are in our hospitals, our prisons, our schools, and our universities. Yet so few of us, unlike Mazzucato and Collington, have a clear understanding of how these organisations work or what they really do. Until a more powerful language can be found for describing, and then fighting them, the consultancy barnacles will cling to Britain, and wherever else they can find a willing host.

The Big Con
Mariana Mazzucato and Rosie Collington
Allen Lane, 368pp, £25

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This article appears in the 15 Feb 2023 issue of the New Statesman, Why the right is losing everywhere