The Management Consultancies Association (MCA) has released its annual UK Consulting Industry Statistics report. The report is based on surveying the Association’s 60 member companies, which, they estimate, comprise around 70% of the UK consulting industry.
Last year we noted that MCA’s members had watched public sector revenues decline in 2010 while an increase in private sector revenues had allowed for a slight increase in overall fees (see MCA reports massive slump in Government billings). In 2011 that trend was even more pronounced: public sector fees declined by a massive 19% (compared to a decline of 11% in 2010) while overall fees increased by 5% to £9bn.
The public sector decline is no surprise; suppliers we speak to say that discretionary spend stalled in 2010 and there has been little sign of recovery (if anything market conditions have worsened). The activity behind the numbers in the private sector is interesting. According to MCA, clients are spending on meeting regulatory requirements, improving margins and opening up new markets. This has boosted the manufacturing and financial services markets in particular. Alan Leaman, Chief Executive of MCA, commented, “While most private sector clients are not confident enough to undertake major projects, they are often developing their capacities, processes and systems so that they are ready for an upturn when it materialises”. Indeed, as Logica’s results revealed this week (see Logica UK star performer as orders crash), large deal opportunities in the SITS sector remain few and far between.