14 May 2007 | Gareth Mytton
Whitehall spending on consultants rose by 5 per cent to £1.6 billion in 2006, according to new figures from the Management Consultancies Association (MCA).
However, the increase was "substantially lower than in previous years", reported the MCA, which added the "slowdown in spending on traditional management consultancy from the public sector" is likely to continue.
From private-sector clients, consultancies' income rose by 22 per cent to £3.7 billion. Manufacturing and construction companies increased their spending on consultancies by 49 per cent to £578 million.
By type of work, consultancies earn most of their income from advising on IT projects (£1.5 billion, a 24 per cent rise on 2005), and programme and project management (£1.1 billion, a 20 per cent increase).
Clients are asking for more advice on outsourcing, which generated nearly £500 million for consultancies, up by 23 per cent from 2005.
The MCA added that nearly all customers are either satisfied or very satisfied with the work that consultancies provide and the calibre of their staff.
Earlier this year, the National Audit Office reported that public-sector spending on consultancies rose by a third between 2003-04 and 2005-06.
The NAO accused Whitehall of failing to collect information on the use and benefits of employing consultancies, whether in-house resources could be used instead, and imposing controls on awarding contracts by a single tender (News, 4 January 2007).