Spending on management consultants rises to £5.2 billion

Will Green is news editor of Supply Management
14 June 2015

Spending with members of the Management Consultancies Association (MCA) grew 8.4 per cent to £5.2 billion in 2014.

The MCA, which represents around 60 per cent of the sector, said digital consulting made up the largest proportion of spend at £1.4 billion, driven by demand for advice on big data, the cloud, social media, gamification, mobile and artificial intelligence.

The association said its members “expect to see many more firms utilising digital right across their businesses to achieve efficiency and reinvent their brands”.

The MCA also said strategy consulting was “back with a vengeance”, valued at £537 million in 2014 and accounting for a 10th of all consulting activity.

Spending in the infrastructure sector rose 42 per cent, with consultants involved in the Thames Tideway and Crossrail projects, while manufacturing was up 24 per cent and retail increased 6 per cent.

Financial services remains the largest private sector buyer of consulting services, with some activity concerning “getting the sector in order after the financial crisis”, but many new projects involve improving digital services to customers, said the MCA.

Public sector spending on consulting was £1.1 billion, similar to 2013, and down on the £1.8 billion spent in 2010, but consultants said advice was changing from “rescuing failing services” to “transformational change”.

Alan Leaman, CEO of the MCA, said: “While there is a long way to go to improve the relationship between public buyers and the consulting industry, the reforms instituted by the last government mean that buyers are getting better at securing what they need and targeting their spend effectively.”

The MCA estimated total spending on management consultants across the sector was around £9–£10 billion.

Paul Connolly, director of the MCA Think Tank, said: “UK consulting continues its recovery at a rate faster than the wider economy, including most other professional services. Consultants are supporting businesses in getting match fit for growth – either through developing existing capabilities or through launching new propositions. Consulting is growing by helping others grow.”

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