The Invisible Private Service: Consultants and Public Policy in Canada kimberly speers



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CHAPTER 16




The Invisible Private Service: Consultants and Public Policy in Canada

KIMBERLY SPEERS




Introduction


In 1967, John Deutsch contended that civil servants would have a reduced role in the development of new policies because of the ‘increasing use of private consulting firms, research institutes and the latest phenomenon, the so-called think tank’ (Meredith and Jones 1970, 383). Almost forty years later, the rise of the consultant has been one of the most significant changes in Canadian public policy analysis, evaluation, development and implementation. The latest figures available state that as of 1998, 70% of all business and government organizations in Canada have used the services of a management consultant at least once in the period between 1993-1998. Especially in North America and Britain, the management consulting industry has experienced tremendous growth in both the size and services offered (Buono 2001) over the past two decades. Numerous reasons have been given for the increased use of consultants, including the increased deregulation and outsourcing of services, the impact of globalization, the increased use of information technology to manage and operate services, and the international management trends emphasizing competition, re-engineering, downsizing, performance measurement, and information management (Wooldridge 1997). Specific to the public sector, these factors, to varying degrees, have all had an impact on how governments manage personnel, deliver services, and develop policy. Furthermore, all levels of government have purchased management consultant services, ranging from the delivery and analysis of policy advice to the implementation and evaluation of policy directives, services, and programs. This chapter introduces the reader to the increasing participation of the consulting industry in Canadian policy development and analysis, a field of study that is neither well understood nor well defined (Buono 2001), especially from a Canadian perspective (Saint-Martin 2000; Bakvis 1997). In one of the few pieces on the impact of consultants on public policy, Herman Bakvis argues the federal government executive is increasingly demanding more political and less formal advice from a variety of external advisors instead of the traditional means of relying on one trusted advisor for policy advice (Bakvis 1997, 84-85). He questions whether the rise in the prominence and importance of external policy agents (think tanks, polling firms, and management consulting organizations) have ‘helped to strengthen the capacity of the core political executive to direct the affairs of state or whether it undermines the capacity of the executive to do so, that is contributing to the hollowing out of the centre of government’ (85). Management consulting firms have carved a niche in government where they are not, according to Bakvis, seen as challenging the power within the core of government; instead, consultants are viewed as ‘instruments that executives can use to help implement their agendas’ (112).

The primary reason for the dearth of research on the role of consultants in public policy is the difficulty of garnering hard data. Neither the federal or provincial levels of government are currently able to estimate annual expenditures on management consultants. Although some governments listed such firms and related contract values in their Public Accounts, information regarding the nature of the services provided was starkly absent. Sometimes, as in Manitoba, information on total spending on external consultants was not available at all. In most other cases, Canadian governments will only provide information on contracts above $10,000.

Another related challenge for researchers is that even when monetary figures are available, it is impossible to determine how much money is spent specifically on policy-related contracts. Further, even contracts not categorized as ‘policy-oriented’ may nonetheless require a certain amount of policy analysis. And depending on how contracted service work unfolds, policy analysis may be warranted - and undertaken -even though it was not requested in the government proposal. It should also be noted that those attempting to assess how much policy analysis is undertaken by consultants for governments may be misled by government officials’ over-classification of some areas of government work as ‘internal administrative policy,’ when it is clear that consultants hired to develop and assess such policy could also have an impact on the public in some manner.

Research on this topic is further challenged by the lack of results-based analysis. As noted, information on government spending on consultants varies acorss jurisdictions and, when available, this information only tells the researcher about the inputs (i.e. money spent on consulting) and nothing about the processes or results of the consulting contract. Consequently, questions about consultants involvment in policy analysis, as compared to their work in more management-related processes, have yet to be answered. Also lacking is information about specific research methodologies consulting firms employ, while the extent to which consultants make palpable recommendations and propose substantive policy options remains unknown. Finally, the dynamic and multifaceted relationship between consultants and government clients often transcends their purely legal, contractual relationship. As a result, the amount of client/government control over the research process and the ability of consultants to influence policy through analysis remains unknown outside of these legal relationships, and until further research can be done on this topic. Lindquistcomments on the need for research to examine the spending patterns of policy units during the last decade, including envelopes for contracts issued to external free agents for policy analysis (Lindquist 2007).

To develop a better understanding of the consulting industry's role in policy analysis and development, the first part of this chapter will describe different types of consulting work conducted for government clients. Following this, the question of why governments hire consultants will be considered. In closing, a brief analysis of the impact of such consultants’ contributions to government policy analysis will be offered. It will be argued that governments at all levels should track spending on consultants, and that further research and discussion needs to take place to determine the appropriate level of input and influence the private sector consultant has on policy analysis in Canada. If politicians and citizens alike are lamenting a democratic deficit in Canadian politics, one way of addressing it is to ensure that the politicians and civil servants still control and have primary influence over the public policy agenda and process.

Defining Consultants


A consultant is an individual, partnership, or corporation engaged to give professional advice or services for a fee or, in the case of an internal consultant, give advice in return for a career. The services of a consultant may include sharing knowledge, experiences, processes, models, behaviours, technology, or other assets (Weiss 2003). Defined this broadly, consultants are engineers, lawyers, accountants, and professionals in the areas of information technology, government relations, and public relations. This chapter will focus on management consultants, with some attention to the increased blurring of services offered by some of the government relations firms in Canada.

The Institute of Management Consultancy (IMC) in Britain defines management consultants as ‘those organisations and/or individuals that participate in the process of management consultancy within a framework of appropriate and relevant professional disciplines and ethics designed for the activity of management consultancy’ (2004). The IMC further explains that management consultancy is ‘the provision to management of objective advice and assistance relating to the strategy, structure, management and operations of an organisation in pursuit of its long-term purposes and objectives.’

Typically, management consultants identify who they are to clients by describing what level or type of services they offer. Some consultants identify themselves as generalists whereas others self-identify as specialists. This former type of consultancy offers a broad range of services to clients that may include organization management, policy analysis, leadership development, change management, information management and systems, evaluation, risk management, and human resource training. While a firm or individual may offer these general services, other firms and individuals specialize in one or more of these fields. In a large consulting practice, individualconsultants may focus on a geographic region, a policy issue (e.g. health, immigration, policing, education), or a process such as hospital restructuring, the implementation of smart cards, and performance measurement in local governments. sSome consulting firms deliver a wide array of services at the national and international levels, whereas other firms or individuals offer specialized ‘boutique’ services and perhaps only consult within a province or regional area. Finally, some management consultants and firms tend to deal with either the private or public sector, while others consult in both sectors. More attention is being paid by management consultants to the third sector as potential markets, but many management consultants are also aware that this sector has limited funding and hence, some consult on a voluntary basis or do not target this market at all.

It is also important to distinguish between management consultants and government relations’ consultants or ‘lobbyists.’ According to the Government Relations Institute of Canada (GRIC), government relations professionals ‘facilitate the exchange of information, experience and ideas between decision makers and those affected by the decisions contributing to the development of public policy’ (GRIC website). Government relations consultants are hired by private sector or not-for-profit organizations and assist their clients in navigating the political system for a specific reason. Reasons for hiring a government relations consultant may include a client’s desire to influence a piece of legislation, regulation, policy or some other type of government decision. As noted by GRIC, lobbyists represent their clients' views and assist them by educating them about the political and decision-making processes of government, conducting research, proposing policies for clients to consider, and when appropriate and relevant, introducing their clients to decision-makers within government.

A government relations consultant can either work for a firm that is in the primary business of lobbying or for a firm or not-for-profit organization as a full- or part-time government relations’ consultant. For example, many of the global pharmaceutical companies have at least one person who deals with government relations in some capacity. While the government relations consultant tends to concentrate on providing advocacy services on behalf of their clients, management consultant services are geared toward solving management and organizational issues. Depending on the project, however, these separate lines of business can become blurred. A management consulting firm may also provide strategic advice on how a client should interact with the government or how it needs to develop stronger relationships within a policy community to achieve its goals. Likewise, a government relations’ consultant can also provide advice and direction to a client on policy or organizational issues. Nonetheless, the differences between an advocacy firm and a management consulting firm are fairly well known to clients, who choose among specialized firms accordingly. Importantly though, both the management and government relations consultant can have a significant impact on public policy.

Another significant difference in this field is between external and internal consultants. Evert Lindquist describes external free agents as consisting of ‘policy experts from consulting firms, think tanks, other governments, or universities from outside the public service … whereas internal free agents are experts from elsewhere in the public service.’ (Lindquist 2007) Meredith and Jones argue that even in the late 1960s, both the federal and provincial levels of government were classifying some of their positions as management consultants because they recognized the need to build in-house capacity to promote cost-effectiveness and to support staff training and learning. Furthermore, some government employees believe that they are the only people intimately familiar with their organizations, only they can fully understand the organization’s needs, and make pertinent recommendations. In this case, the government client would prefer to hire an internal consultant over an external consultant since it takes time and money to educate an external consultant about the current state within a government department. Moreover, the internal consultant is more familiar with the culture of the department and can thus put forward recommendations more likely to be implemented and sustained.

This practice of classifying certain positions within the public service continues as governments recognize the value of their own employees’ expertise and experience. For example, the Government of Canada has established its own consulting agency, Consulting and Audit Canada. This agency has approximately one hundred professional consultants who offer the following services to the rest of government: advice, research, consultation, analysis, surveys, facilitation, evaluation, review, problem diagnosis, business case development, training, benchmarking, environmental scanning, preparation of government documents and discussion papers, and direct participation in public service management tasks (Consulting and Audit Canada 2002). Although not designed to compete with the private sector, this new agency is able to market itself as a body that has the experience and expertise with Canadian federal government issues. The agency also provides consulting services to other governments and according to Consulting and Audit Canada, they have had client engagements with over forty countries and international organizations (Consulting and Audit Canada 2002). No provincial government has established an equivalent to Consulting and Audit Canada, but they do have departments in which positions are classified as consultants.

Finally, it is important to distinguish the firm consultant from the individual consultant. Consultants in a firm offering consulting services have a wide range of services and knowledge available to them. Depending on the size of the firm, international knowledge management databases may be available and consultants may be assigned to projects anywhere in the world. In contrast, individual consultants do not have access to a shared knowledge management database and rely on their own expertise and experience to sell consulting services. Individual management consultants must be able to market their skills and knowledge to clients. Hence, individual consultants tend to be well-connected retired public servants and politicians, former management consultants from the larger firms, and senior level management from quasi-government agencies and the private sector in general. In some cases, an individual consultant may also contract their services to a firm if the firm does not have the individual’s expertise.


History of Consulting in Canada


The consulting business has existed in Canada for almost a century. Despite more awareness about the complexities of governing and the elaboration of consulting services offered to clients, the negative perception of the consultant developed in the pre-WWII period was further exacerbated in the 1940s and 1950s by a business that was ‘attractive to charlatans and quacks who preyed upon the gullible’ (Mellett 1988, 5).

This negative image has not been entirely shed but was somewhat alleviated in the 1960s when reputable accounting firms began to offer management and information control consulting services. At the same time, the Royal Commission on Government Organization (often called the Glassco Commission) in 1960 was an important catalyst for the growth and acceptance of management consultants in government (Mellett 1988; Tunnoch, 1964; Saint Martin, 1998). The Glassco Commission was established to ‘inquire into and report upon the organization and methods of operation of the departments and agencies of the Government of Canada and to recommend the changes therein which they consider would best promote efficiency, economy, and improved service in the despatch of public business’ (Government of Canada 1963, vol. 5). The Commission made many recommendations to improve the economy of the public sector and to shape the overall climate of governing. One of the most controversial themes in the final Report was its support for the application of business principles and practices to certain government operations. With these recommendations came the need to learn more about how business operations and principles could be applied to government. Management consultants were then hired to work with and in numerous government departments.

Denis Saint-Martin notes that many of the management consultants hired to work on the Commission ended up working in senior management positions in the Civil Service Commission and in the newly created central agency, the Treasury Board Secretariat (Saint-Martin 2000). A.W. Johnson, the Deputy Provincial Treasurer with the Province of Saskatchewan at the time of the Glassco Commission, recognized the impact the Commission had on the growth of consulting and wryly commented that, ‘For a few – the management consultants - the reports and the public interest which they have aroused create a happy hunting ground where new commissions and new studies can be proposed with confidence - all of them requiring the specialized skills of management consultants’ (Tunnoch 1964, 393).

With business principles became more accepted in government, the 1960s saw management consultants become more institutionalized in the processes of government.. Major changes to information technology (IT) did not really significantly influence the public sector until the 1990s when the Internet became publicly available and system-wide technologies were available for organizations to implement. Consulting firms employed thousands of people with a computer background and while the technology ‘boom’ ended in 2000, many consulting firms are still making healthy profits offering this type of consulting. Over past decade, consulting firms have further diversified their service offerings to include services such as polling and branding to their public sector clients (see Petry’s chapter in this volume). Along with offering consulting services on information technology, management consultants also offered side services such as strategic advice, change management, and business process reviews to complement the more IT related contracts.

While IT related projects were important to the growth of the management consulting industry, the most significant factor influening the growth of management consulting in government in the past two decades has been the acceptance that private sector principles and practices trump those of government. Since the late 1980s, this orientation has been romoted by spawned by the increasing acceptance of new public management principles and practices (Hood 1995). New public management (NPM) reforms have, in one sense, forced governments to look to consultants for assistance in a multitude of activities. In the 1980s and 1990s, most Canadian governments experienced massive cutbacks in financial resources, services offered, and in the number of civil servants delivering programs and services. Increasingly, governments became focused on showing the public how accountable and successful they were through the results they achieved. Planning, policy, and research branches seemed to be particularly under attack because it was difficult for politicians to always determine the immediate outcomes or results from these areas, because of heightened ‘public servant’ bashing in the 1980s and early 1990s, and because of the broadening perception that civil servants had hijacked the policy agenda. Some politicians may have intentionally cut the policy capacity of the civil service to create the impression that they were taking back control of the political agenda (Speers). Yet because the tasks of policy analysis, development, and implementation still remained necessary, cutbacks made to most of the civil services across Canada gave management consultants an opportunity to fill those policy, planning, and research gaps.

Another area targeted for change was the government’s direct delivery of services to the public and in some cases, the internal services within government itself. Even though citizens wanted a more streamlined and efficient government, for the most part citizens still expected governments to maintain ,ost services and programs. Recognizing the political ramifications of simply stopping certain government programs and services, and advocating the ‘steering not rowing’ philosophy of new public management, many governments looked for ways to deliver services in a more cost-efficient and customer-oriented manner (Gaebler and Osborne 1992). Indeed, part of the mantra of new public management has been for the public sector to ‘get out of the business’ of delivering services if some other entity can deliver them. Services traditionally delivered by government such as the sale of liquor, tire recycling, and road repair, were often privatized or some other partnership arrangement between business and government was developed to deliver the rejected services.

Consultants were an integral part of this process, involved either in managing the transition between the old and new ways of delivering services, or as direct participants in new service delivery arrangements. Indeed, consultants have played an important role in packaging, selling and implementing NPM techniques. Governments contemplating institutional change often enlisted the services of consultants to clarify available options and recommend courses of action (Greer 1994). In summary, management consultants have gone from having a limited role in offering services to a government to having a somewhat stable, ubiquitous role in government at the same time remaining somewhat invisible to the public eye.

Why Governments Hire Management Consultants


The actual reasons why clients hire consultants are varied and can change throughout the course of a consulting project (Lindquist 2007). While the particulars of a project depend on the client’s needs and goals, there are some common reasons for engaging a consultant. One is that the public sector does not have the particular skills or expertise needed to undertake a task. For example, as governments have taken advantage of information technology systems since the early 1990s, they have often not understood what systems were needed, what might be done with them, or how to make those changes. Both technology and management consultants often from international firms, were then engaged by governments to develop information management systems, e-government frameworks, and related policies, despite the dearth of experience in these areas among private sector consultants. There was hesitancy to create new positions in the civil service for IT related positions because it was an era where it was politically responsible to be seen reducing the size of government, not expanding the size. Furthermore, the IT related work was seen to be for the most part, temporary.

Significant internal government cuts and streamlining have significantly reduced the pool of people to do the work required by legislation or expected by politicians and citizens, thereby also fueling government demand for management consultants.. Hence, consultants may be hired to carry out research projects; to develop, administer, and assess client satisfaction surveys; to develop best practices and benchmarking databases; and to conduct feasibility and risk assessment studies or change management projects. Another impact of downsizing the civil service is that undertaking projects of short duration may be more cost-efficient, thus lead to hiring more external consultants for the length of these projects. To increase the internal capacity of remaining career civil servants, a consultant may also be engaged to train civil servants to do the jobs themselves. Knowledge transfer is increasingly becoming important to government clients purchasing consulting services, in areas such as computer training, information management, board governance, evidence-based decision-making, and protection of privacy.

Governments may also hire consultants when they need independent opinions. New PublicManagement was characterized by a view that politicians are right to distrust civil servants. In hiring management consultants, politicians can use their perspective as a ‘check’ on the civil service; likewise, if the civil service hires a management consultant, doing so helps to legitimate their work. For example, a government department may seek the services of a larger, well-known consulting firm because those they report to want a ‘big name’ firm to conduct research and provide recommendations. Alternatively, individual management consultants with smaller practices may be sought out for their reputations and expertise. This can be a rather frustrating situation for civil servants if retired or laid off public servants have been hired on as management consultants and then return to offer the independent opinion. Civil s3rants also cringe when they are required to inform consultants of the relevant situation, only to see their own informal suggestions echoesd in that consultant’s formal recommendations.

Government departments also occasionally hire a management consultant to facilitate a strategic, business, or operational planning exercise. It is generally easier for a person external to the organization to assist the group in finding solutions and to deal with difficult situations or personalities. Using a consultant also helps to ensure that everyone participates, that the issue at hand is being addressed, that consensus is reached among the different positions, and that hidden agendas do not dominate the process and outcomes. The consultant’s experience in working with other groups in similar exercises can prove to be decisive in such sensitive situations. Nonetheless, it is important to appreciate that unanticipated consequences for internal policy analysis may flow from this management consultant facilitation; a consultant can influence how policy analysis is perceived and prioritized depending on his or her personal biases and style of facilitation.

An example of a management consulting firm conducting a review for the federal government illustrates their potential impact. KPMG recently conducted a review of Aboriginal Tourism Team Canada (ATTC), on behalf of Aboriginal Business Canada (a branch of Industry Canada). As noted in their report, a review of the ATTC was undertaken ‘to determine to what extent ATTC has been successful in influencing and developing tourism policy and programs for the benefit of Aboriginal people’ (Rostum 2002). In preparation for the final report on ATTC, KPMG conducted a review of relevant documents and databases, did a survey of Aboriginal tourism sector organizations, developed a literature review, and conducted interviews with ATTC Board members, Regional Aboriginal Tourism Associations and government partners. Upon completion of the research, KPMG made several recommendations to further enhance Aboriginal tourism in Canada. This experience suggests how a management consulting firm has numerous opportunities to conduct influential policy analysis and thus shape government policy directions.

Finally, in the past decade, consultants have been increasingly asked by the public sector to facilitate and manage public consultations, which involve communicating with the public and specifically, and conducting focus groups, workshops, townhall meetings, interviews, and surveys. While a government may engage management consultants in a public consultation to reduce any biases, management consultants may also be involved in a public consultation project so that government can distance itself from any controversial issues that require public consultation. Once the final recommendations or decisions are made, there will likely be some individuals or groups disappointed with the results. A government can then state that a private sector firm developed the survey instrument, administered the survey, and developed the final report outlining the major policy issues at stake, the available policy options, and a list of recommendations. The hope often seems to be that making a policy decision can become less politicized as management consultants become more involved in the policy process.



Impact of Consultants on the Policy Process and Policy Analysis


The relationship between management consultants and the public sector is characterized by both tension and opportunity. On the one hand, the increaseof management consultants working with civil servants has given the latter an l opportunity to gain external knowledge to improve their processes, programs, services, and policies. It is also an opportunity for management consultants to hone their skills and expand their practice and service offerings. There is also the opportunity for programs, services, processes, and policy to improve and to better reflect the goals of the politicians and citizens. On the other hand, there is also tension and concern about the impact of management consultants on policy issues, processes, and structures in Canada.

As noted at the outset of this chapter, the numerous reforms to the Canadian federal public service since the 1980s have made management consultants an integral part of how the civil service develops, implements, analyzes and evaluates policy, and how it operates and delivers services.. The biggest concern about this development reflects the different goals of the private and public sectors. Recognizing that profit is the primary motive for a private sector company, there is a concern about how this profit focus conflicts with government’s wider goals. Remembering that a private sector consultant’s goal is to sell services and make a profit, we must acknowledge that in their quest to develop business, management consultants also create management trends or problems to fix. There is thus a tension between creating problems and selling solutions. It then becomes part of the management consultant’s job to tell organizations, including government, that there are better ways of strategizing, developing policy and plans, running services, and delivering programs -- and that management consultants are best positioned to provide such solutions.

Abrahmson (1991) comments that management consultants are partially responsible for setting many managerial and operational trends in the economy. Bertrand Venard further argues that while the establishment of such trends often improves management thought, ‘the underlying danger is when these concepts are simplified and utilized without full and proper diagnosis, as they are typically offered to enterprises [or governments] as universal, scientific, and efficient means of improving organizational performance’ (2001, 171-172). Especially within the larger consulting firms, templates of consulting processes and solutions are often shared among consultants to market to their current and potential clients. These ‘one-size-fits-all’ approaches to consulting are often developed with the private sector in mind, so when marketed to the public sector, few, if any, changes are made to reflect the differences between the two sectors. This should be a cause for concern if the focus of the service being delivered to government is customers and not citizens, with rights and obligations different from those of customers.

Another related area of concern is the background of those consulting for government. While the private and public sectors overlap somewhat in terms of processes and systems, consulting for the two sectors also entalis some significant differences.. Consultants trained in business, or with engineering and computer degrees, typically have littletraining in how a government works. Such consultants thus find it difficult to identify fundamental differences are between working in private and public sector environmentsHence, public sector reporting mechanisms may seem to be ‘burdensome’ and full of ‘red tape’ to those not familiar with government, but to others more familiar with the decision-making and reporting processes within government, they are deemed to be essential in fulfilling the requirements of accountability and ministerial responsibility and meeting requirements mandated by legislation and regulations. Further, legislation, regulations, or political or cultural conventions often shape the projects consultants take on. External consultants hired to assess a policy with an eye to developing policy options for a government department thus need to be aware not only of the substance of the policy, but also of government culture, legislation and regulations, and conventions. Training in political science, public policy, or public administration may thus be necessary for those who consult with government and lack experience working with government in some other capacity.

The ultimate goal in business is to make a profit, whereas in government, the goals of a policy or decision are usually a great deal more complex, involving multiple stakeholders with different goals and interests. Moreover, highly regarded qualities in the private sector such as efficiency and speediness have to be balanced with equity and effectiveness in the public sector. While the ‘bottom line’ in government has become increasingly important, consultants working for government have to be aware that policy goals can be complex, with competing agendas and preferred outcomes at play.

Engaging management consultants in government unavoidably undermines institutional memory and policy capacity. For example, management consultants often conduct an environmental scan and write a report recommending new benchmarks and performance measures for a policy sector. In the course of conducting the research, the management consultant often takes away the contacts made during the research. Unless these contacts are carefully documented, the government department or agency may be left without clear reasons as to why some information was not included, what benchmarks from the benchmark partners [this is consultancy-speak -- use English!!] may be in development or changing, and lose many nuances that might benefit the project in either the short- or long-term. Moreover, when management consultants complete a project, they take part of the institutional capacity for the organization to conduct the work in the future or for the organization to benefit from learning about a specific issue. Finally, department evaluations suffer when, as is typically the case, information or materials are incompletely passed from the management consultant to the client at the end of the project.

Ethical behaviour in the workplace has become increasingly important in recent years. Given that management consultants are not part of the public service, it is important to identify their own codes of conduct and to determine if management consultants are bound by the ethical codes of a department or government when hired. Some management firms adhere to a code of ethics, and management consultants who belong to the Canadian Association of Management Consultants are committed to a common code, but many management consultants are not bound by any professional code of ethics. The issue of ethics can arise in a consulting engagement in many ways. For example, some may argue that underbidding a project may not be ethical (Pfeiffer and Jones 1985). Having inexperienced consultants do the majority of work where the proposal stated the expertise utilized would be from the senior management consultants is also unethical. ( Robinson and Zody, 1988/89) Even if the senior consultant provides quality control in supervising any documents released to the client,, it is ethically important for consultants to be explicit about the experience of those consultants who will actually be doing the work.

Revelations in the Gomery Commission hearings in the spring of 2005 raised high-profile ethical issues concerning government contracts with consultants (of all kinds), the level of political involvement in the awarding of contracts to external consultants, and access to information about contracts between government and an external consultant. Whereas before consultants were somewhat invisible to the average citizen, the Commission hearings made citizens aware of the extent to which consultants are involved in developing, marketing, and delivering services on behalf of government. The government has been criticized for its lack of ethics, accountability, and access to information regarding this case. The Gomery Commission has also tarnished the image of consultants in the sense that it highlighted kickbacks, consultants not performing the work required in a contract, and people being hired because of their familial or political relationsPerhaps most importantly, the federal Liberal Sponsorship Scandal emphasized the accountability gaps between government and consultants and between politicians and civil servants. The full impact of the Gomery Commission has yet to be determined, but it is likely that the federal government's procurement process will become more formalized and stringent , and accountability procedures and guarantees will be strengthened. All of this will significantly constrain the activities of management consultants in federal departments.

Management consultants' involvement in policy and decision-making also has an impact on accountability. Donald Savoie argues that ‘policy issues no longer respect organizational boundaries and, as a result, policy-making has now become horizontal, consultative and porous’ (2004, 7), with management consultants being an important part of this change. Although Savoie focuses more on implications for civil servants' accountability to their ministers, he makes a strong case for developing new ways to understand accountability that take into account the roles played by various policy process actors . The challenge of holding consultants accountable is that, ‘consultants do not have a minister, they have clients; however, career officials not only have ministers, they must also live with the consequences of their policy advice’ (2004, 11). Usually the only consequence of a poorly managed consultant engagement is that the reputation of the consultant is tarnished, thus diminishing work opportunities with the affected department or government.

What of management consultants' accountability to citizens? Given that management consultants are involved in every stage of the policy process (policy agenda setting, development, implementation, analysis, evaluation, and communication) and have consulted for all levels of government, citizens who want to get involved in the decision-making process or want to learn more about why decisions were made (e.g. through an access to information request) may be at the mercy of the private sector. The public still has access to records concerning specific policy decisions; however, the files may not contain all of the information pertinent to the decision, as some is 'privatized' within the consulting firms. The federal Privacy Act provides citizens with the right to access personal information held by the government and to protection of that information against unauthorized use and disclosure. But there are still loopholes. As noted in the 2003 Auditor General’s Report, the Office did not audit the records of the private sector contractors in the well-known sponsorship scandal (Office of the Auditor General of Canada 2003).

One of the most challenging aspects of management consultants' accountability to government is the private-public partnership. Research in the evaluation of these relatively novel partnerships is still rare. In one of the few studies of a partnership between a government department and a management consulting firm, David Whorley explores that between Ontario’s Ministry of Community and Social Services (COMSOC) and Andersen Consulting, with particular attention to accountability issues. (Whorley, 2001). He finds that collaborative partnerships and democratic accountability are in tension and that the ‘Andersen-Comsoc affair suggests an important power imbalance between the partners and the associated displacement of public concerns for private ones’ (328). Whorley notes that the goals of each party collided in that COMSCO was trying to support the overall agenda of the Conservative government of reducing overall costs whereas Andersen’s interest was profit. He observes that other studies conducted on private-public partnerships reveal that accountability is often an issue between both sectors.

In a recent scandal concerning Hydro-One in Ontario, former Progressive Conservative minister Frank Kleesargued that the awarding of over $6 million worth of untendered contracts for consulting contributed to the Conservative Party's loss in the last Ontario election. ‘Who is accountable to the public? It’s always going to be the person who has their name on the ballot. It’s never going to be ‘Mr. Consultant.’ They wander off in to the sunshine, and they’ll be drinking their tequilas on the beach while we answer to the people who elected us’ (Hiscox, CBC 2004). Klees’ comments underscore the sense in which policy oversight and accountability issues must be taken seriously in all consultant - government relationships, by both political parties and the general public.



Consultants and Public Policy


Others in this book raise the question of who should play which roles in the development of public policy. This question is extremely important in assessing the relationship between management consultants and government. Remembering that the ultimate goal for the private sector is increasing profit margins, and that vast majority of management consultants come from a business and accounting background, we should not be surprised that consultants may not be familiar with the democratic principles of equity, equality, fairness, and justice that are central to government operations in Canada. Yet if consultants simply implemented what governments desired, the issue of policy orientation or one’s background would not be of concern.

Anthony Buono takes a different perspective, arguing that for management consultants, the ‘the boundary between dispensing advice and managing systems is becoming increasingly blurred’ (2001, viii). Numerous consulting firms now advertise an ability to give policy advice to government as a key part of their service offerings. For example, on their website, XIST lists numerous services including: ‘information policy and legislative compliance auditing, preparation of Treasury Board funding submissions, and writing ministerial briefing notes and reports for senior management’ (XIST, website). Another consulting firm, Kaufman, Thomas + Associates (KTA) established the Centre for Collaborative Government within their firm, with the intention of making the Centre ‘a vehicle for a more independent approach to public policy research, dialogue and development’ (KTA, website). According to their website, the KTA Centre ‘has achieved a national reputation for generating important new perspectives and policy directions in areas of accountability, government transformation, Aboriginal capacity building, and democratic renewal’ (KTA, website). And the Stratos consulting firm states: ‘We provide a diverse set of consulting skills and services to support the full spectrum of public policy, from strategic advice and the development of new policies, to program implementation and instrument design through to program evaluation and institutional reviews’ (Stratos, website). Indeed, the federal government has become porous as management consultants are infiltrating every policy pore of government.

Some policy areas are more porous than others, largelybecause some government departments have more funds to spend on consultants. For example, provincial Health and Education departments usually obtain the most funding and also tend to hire the most consultants. Other departments that hire management consultants on a regular basis tend to be those dealing with justice, economic development, infrastructure, aboriginal affairs, and municipal or intergovernmental affairs. Increasingly, consulting projects have dealt with cross-government policy issues such as children's welfare, aboriginals, information management, communication, and management issues in general. Within the consulting world, the larger firms tend to focus their energy on building relations with government departments that have the largest consulting budgets and compete on projects that are $60,000. Smaller firms or individual management consultants tend to compete with one another on projects under $60,000.

Larger consulting firms develop relationships with federal and provincial governments departments in the hope of developing a long-term working relationship. Federal and provincial methods of tracking and reporting on external contracts do not allow us to determine the exact amount of money spent on external consulting contracts annually by each government. Unsurprisingly, however, we can say that the federal government and the provincial governments of Alberta, British Columbia, Quebec, and Ontario are the biggest purchasers of external consultants in Canada. In some jurisdictions, particularly Ontario and the federal level, the cost of consulting services has become a concern for the Auditor General, the media, and the public. For example, an article that appeared in the Ottawa Citizen notes that, ‘the [federal] government spends nearly $7 billion a year on professional services, the army of for-hire consultants dubbed the shadow public service.’ (May, Ottawa Citizen, 2004) Furthermore, the Office of the Auditor General’s reports in the past several years are filled with references to overspending on consultants and project overruns. In its 1996 Report, the Office of the Auditor General (OAG) commented that for one project, the consulting costs doubled, from a projected $8.75 million to a final tally of $15.4 million (Auditor General of Canada 1996, sec. 8:49).The 2003 OAG report offered extensive observations on questionable management and reporting standards, and drew attention to the lack of standards, ethics, and accountability in several government programs and offices (OAG, 2003).

In response to the negative publicity surrounding the federal Liberal sponsorship scandal and the overall desire to improve transparency and accountability of the government-consulting relationship, the federal government’s 2004 budget announced a new policy on the mandatory publication of contracts over $10,000 for each government department (Treasury Board Secretariat 2004). The contract information to be reported by each department includes: vendor name, number used in the financial system, contract date, description of work, contract period for services, delivery date of goods, and contract value. This information is still too vague to offer precise and comprehensive information regarding the types of consulting being undertaken. For example, in Environment Canada’s website, numerous contracts were described as ‘Other Prof. Serv. - Management consulting - OGD or programs.’ This generic description is designed to represent all services purchased by any government department categorized as: ‘Consulting services for financial management, transportation, economic development, environmental planning, public consultation and other consulting services not specifically mentioned in other objects’ (Public Works and Government Services Canada 2003). Other vague categories make it problematic to determine how much money is spent on policy analysis and what types of projects governments contract out.

Finally, it is also important to note that management consultants are not only hired by governments to work in specific policy areas; they are also employed by actors wishing to influence public policy. For example, as noted by Stritch, business associations employ management consultants to conduct policy analysis in ways that ultimately affect government operations. Interest groups, polling firms, and think tanks have also employed management consultants. Adding to the complexity of influence, at times, these external policy agents may be in competition with each other for the government’s attention, but other times, they may act in complementary ways. This policy actor matrix, where external consultants work for government, quasi-government agencies, think tanks, policy institutes, business associations, non-profit organizations, and the private sector, can give external management consultants a great deal of influence over policy analysis. So depending on what type of policy one is investigating, it can be important to conside the role and impact of other external policy agents and their relationship to external consultants.


Closing Thoughts


In the past several decades, management consultants have become involved in every stage of the Canadian policy process; in some government departments, they have been involved in the analysis of policy. In one sense, management consultants have become the private service to the public service. The impact of this public-private relationship needs to be further explored to determine the impact of contracting out policy services to external consultants on government performance, policy development, program delivery, and government accountability to citizens. As Andrew Stritch eloquently notes in this book, a larger question looms over the business-government relationship, namely, the uneasy marriage of competing distributive mechanisms (Stritch 2006). This observation underscores a key theme of this chapter: instead of characterizing external consultants as rational and apolitical, perhaps more attention should be paid to the personal interests and biases they bring to government when making recommendations on policy. Bakvis comments that ‘it is extremely rare . . . to find among current management consultants recommendations that run counter to market-driven, client-centred solutions’ (Bakvis XXXX, 111). The bottom line for management consultants is profit; not accountability, not getting elected, and not ensuring services to citizens are equitable and fair. Instead, the good consultant is always thinking of a future opportunity to work with a client again, and making other governmental contacts during the course of a project to broaden his or her money making network.

Management consultants have become important policy actors in all levels of government, and have worked for external policy actors such as interest groups, think tanks, research institutes, and professional associations in their attempts to influence public policy. As additional research into this increasingly influential aspect of Canadian policy analysis and development is conducted, the real value of management consultancy in these areas must be openly debated. Particular attention should be addressed to questions of accountability and the probelmatic fit between private and public sector culture and objectives.

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