• Management consultancy grows by 7% by being at the forefront of digital opportunities, with sector worth est. £10.6 bn, according to new research
• Digital and Technology consulting is most in demand across UK (28% of total) as consultants drive digital and technology transformation across public and private sector
• Consulting in infrastructure sector jumps 190% since 2016 as consultants are brought in to work on major complex infrastructure projects to drive efficiency...
The UK consulting sector grew 7% last year achieving the second highest growth rate in over a decade, according to latest statistics released by the Management Consultancies Association (MCA). The UK is home to one of the world’s largest consultancy sectors in the world and according to the latest MCA Annual Report 2019 is now worth an estimated £10.6 billion in the UK*. Several sectors have witnessed a significant increase in consulting activity since 2016; namely Infrastructure (up 190%), Retail and Leisure (up 65%), and Digital and Technology (up 31%). However, Private Health and Life Sciences (-14%), Manufacturing (-14%), and other sectors (e.g. not-for-profit) have experienced a decline.
While Infrastructure is the smallest sector as measured by fee income (approximately £150 million in 2018), growth has been significant. There has been a step change in UK investment into infrastructure, and this has caused an increase in the demand for consulting resources to help manage very difficult and complex projects and keep programmes on time and to budget, with significant efficiency expectations. MCA member firms provide key services for such developments, including programme and project management, sustainability consulting, and advisory on design and customer experience. Digital and Technology consulting has been the largest service line among MCA members for several years now, and Digital consulting now makes up 28% of all fee income accrued by MCA members in 2018. Now, more than ever, consulting clients seek support on digitising their organisation - whether it’s advanced analytics and machine learning or assistance with cloud adoption. The consulting industry is at the forefront of driving technology change and transformation for businesses across the UK.
Tamzen Isacsson, Chief Executive, MCA, said:“Despite a year of economic and political uncertainty, the management consultancy sector has continued to enjoy positive growth, outpacing the rest of growth in the UK economy as organisations have relied on consultants to drive technology transformation in their organisations. However, we should not be complacent. For the UK to remain a global leader in this area, and to drive innovation and productivity throughout our country, the government should pursue a Brexit outcome that secures positive economic growth and enables businesses to trade as freely as possible overseas. Talk of no deal Brexit undermines business confidence and should be avoided at all costs but businesses should continue to prepare as much as they can for the October deadline and the possibility of a no deal outcome.”
Consulting in the public sector has also increased over the last two years. It is up 12% since 2016 and makes up 22% of all fee income accrued by MCA members in 2018 - second only in size to work done in the Financial Services sector. Consultants play a vital role in the public sector and according to a recent independent survey by Savanta, are valued by public sector leaders for the transformational impact, innovation and increased efficiency they bring. The increase in recent work has been largely linked to the significant effort government is putting into digital transformation programmes. This differs significantly from the 5% growth in the sector identified by the MCA in 2016. Approximately 80% of UK-based fee income in 2018 was accrued in the UK, 20% was gained overseas, including 10% from the European Union and this continues to illustrate the importance of consulting activity outside of the UK.
The UK’s protracted exit from the European Union and accompanying economic anxiety has led many businesses and government departments to call on the expertise of consultants to help plan for different scenarios. This trend is likely to continue as we move closer to the next scheduled October departure date but the growth of consulting revenue in 2018 has not been because of a huge uplift in Brexit related activity.
The MCA represents some of the largest and most renowned management consultancies in the world including many medium sized and leading small specialist consultancies. Firms operate in a variety of sectors and offer a huge diversity of services to clients ranging from government departments to FTSE 350 companies, SMEs and local businesses. Since 2016, both large and small firms have managed to secure encouraging growth up 7% and 18% respectively whereas medium sized firms have tended on average to have a lower level of growth (up just 2% since 2016).
The report also revealed that members of the MCA support over 30,300 jobs across the UK with an estimated 60,600 working in the sector, as a whole. Apprenticeships also play an important part in recruiting top young talent across the consulting sector with over 580 trainees, apprentices and school leavers recruited by MCA members in 2018. At the same time, 1,214 graduates entered the industry in the same year. Helping to ensure that the best talent is retained and developed, MCA members spent £87.5 m on staff development and training in 2018.
The MCA’s Annual Industry Report 2019 provides an unrivalled assessment of the performance of the leading consulting firms in the UK which are part of the trade body the Management Consultancies Association. The report examines fee income data provided by member firms over recent years to identify the size, diversity, and growth trajectory of consulting activity of MCA members, as well as the wider consulting industry. Market research agency Savanta, partnered with the MCA to collect and analyse industry data for the 2019 report.