| | By Mick James
Tony Blair may be
back, but is it going to
be business as usual
after the election? A
lacklustre campaign
which saw most parties
duck the really big
issues led to a
surprisingly exciting
election night. It's a
result which can be seen
as a success for all the
parties. Labour have
held onto power with a
working majority, the
Tories have regained
ground and revived
morale, and the Lib
Dems have achieved
another high-water
mark.
How this will
translate into the
day-to-day business of
government is
fascinating to predict.
Labour's majority is
still just about large
enough for them to carry
on as if nothing had
happened, although
they'll need to be
disciplined in the face
of a revitalised,
two-pronged Opposition.
What's more difficult
will be negotiating with
internal factions. The
party has been stripped
of some of its more
Blairite newcomers, and
Labour backbenchers will
be eager to flex their
muscles. This could have
major consequences for
plans for further reform
in health, education and | |
| |
| | largely unnoticed line
in the Labour manifesto
also promised to use
public procurement
“under EU rules” to
safeguard UK jobs. This
could be bad news for
offhsorers hoping to
pick up public sector
work (and for government
departments hoping to
use this obvious route
to save money).
So far in government
Labour has been
reasonably
consultant-friendly.
According to figures
from the Management
Consultancies
Association spending on
consultants has risen
from £217m to £1.3bn
since 1997. With
experienced figures from
consultancy in both
government and
administrative posts,
the administration is
well aware of the
advantages and pitfalls
of using consultants. It
certainly won't do
anything as ham-fisted
as the Conservative
pledge (based on the
James Review, compiled
by people who really
should know better) to
simply slash £500m from
government spending on
consultancy.
However there has
definitely been a new
"get-tough" approach to
procurement which has
been hard on long-term
suppliers and made it | |
|
| | hard to make money on
government contracts.
This may make for
some lean times ahead.
Most commentators agree
that this will not be an
administration with much
time for grand projects.
A lot of energy will be
going into internal
debate as the succession
to Tony Blair is
decided, and there'll be
desire simply to keep
things on an even keel
with an eye on the
fourth term.
At the same time,
there are worrying signs
in the economy, with oil
price rises beginning to
fuel inflation, and
consumer confidence
evaporating. On the
public finance side,
Gordon Brown faces not
one but several "black
holes". His own plans to
grow spending are based
on growth assumptions
that few outside
observers would endorse,
and there are a number
of structural
time-bombs. In the days
before the election,
some truly worrying
figures about public
sector pensions came
out. Public sector
pension costs are rising
so fast that in some
areas they are more than
swallowing up increases
in expenditure. None of
the parties picked up on
this in the campaign.
That's probably because | |
|
| | no-one has ever had a
clue what to do about
it, preferring to pass
the parcel to future
administrations. This
process could be coming
to a rapid and sticky
end, with Labour facing
an unenviable choice
between reneging on
promises to public
sector workers or
jacking up taxes.
If all this comes
true, the consultancy
industry should start
panicking. In previous
recessions, the public
sector could always be
relied on to come to the
rescue of the industry.
This time round it
simply isn't going to
happen. If the worst
case scenario--a return
to Seventies-style
"stagflation"--occurs,
the impact on the
industry could be severe
indeed. Are you ready to
face declining order
books and mounting staff
costs? It could happen
sooner than you think.
All views expressed
in this article are
those of Mick James and
do not necessarily
reflect the views of
Top-Consultant.com and
Consulting-Times.com
Contact Mick with
your views or
suggestions at:
mick.james@top-consultan
t.com
| |
|
Previous Page 
