The provision of consulting services to public administration and the public sector must respond to the particular challenges and problems of the sector. In turn these challenges and problems derive from the national, social and economic context and, in large measure, the present and future policies of the government. Governments turn to consultants because the challenges they face are new and complex, and the right responses are difficult to find in the absence of precedents, experience, and resources for adequate analytical and conceptual work. In addition, governments are constantly exposed to political pressures and criticism, which may or may not be justified. Comparisons with the private sector are frequently made, hence the growing interest in evaluating and using private sector experience to enhance effectiveness and efficiency in the public sector.

26.1 The evolving role of government

The role of government in modern society is pervasive.1 Not only do governments provide or regulate a vast array of services, they also provide the legislative framework for governance. Government can achieve its objectives in many ways: by producing and delivering a service itself; by making direct payments to individuals and businesses; by setting up a government-owned commercial enterprise; by providing direct grants or low-interest financing loan guarantees; by offering tax incentives to individuals and businesses; or by regulating business and other activities of individuals and organizations.

The total outlay of government is between 30 and 50 per cent of gross domestic product (GDP) in most Western industrialized countries, while in some developing countries the public sector represents an even higher proportion of GDP. Governments also provide a relatively high percentage of total national employment. An exhaustive list of challenges facing the public administration sector in various countries would be very long indeed. Governments have sought assistance from consultants on a wide range of economic, social and administrative issues.

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Management consulting

David Osborne and Ted Gaebler have expressed openly what many other scholars and practitioners believe – government needs to be reinvented.2 There can be no prosperous and democratic society or flourishing market economy without a strong and effective government. Criticizing governments in general terms is of little use: what is needed are workable proposals. Osborne and Gaebler suggest ten broad principles, or directions, that underscore how public organizations can “reinvent” and structure themselves, moving from centralization to decentralization, from monopolies to competition, from bureaucratic to market mechanisms and from funding inputs to funding outcomes or results (box 26.1).

When management consulting was first introduced to public sector management, assignments tended to be general in nature. In recent years a number of factors have changed this pattern. Government programmes are becoming more complex. There is a need to improve the productivity and social impact of government services in the face of shrinking budgets and the steadily increasing demand for more diversified and higher-quality public services. Advances in information technology are both facilitating and requiring the redesign and re-engineering of major government programmes and services. As a result, the nature of consulting services required by this market is becoming more specialized and more complex. Most of these services tend to be in one or more of the following four areas.

●Strategy and policy advice, generally related to wide societal or administrative problems facing the public sector. Management consulting services are generally bought by the top echelon of public sector managers and politicians, who aim to clarify options and determine the optimum direction in a highly complex environment. This market is small, and is generally limited to consultants with publicly recognized experience in the policy area.

●Designing, developing and managing programmes and operations is an area in which there are far more frequent requests for management consulting assistance. These requests may be made by public managers, in reaction to an evaluation or audit, or may be triggered by consultant marketing.

●Adjustment of the machinery of public sector organizations. These adjustments usually focus on organizational structures, processes and supporting systems such as finance, procurement and human resource management. Concerns to increase productivity and use new information technology to the full have greatly intensified the pressures for public sector managers to restructure the processes and systems for which they are responsible.

●Facilitating change processes in public sector organizations. Whether the change is to the structure of the organization and its way of doing things, or to supporting systems, the management of the change process itself is critical to the success of the organization. Consulting support in establishing continuous learning, total quality and performance management processes can provide the framework for the change process. With the reduction of in-house

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