Bonkers or ahead of the game?

November 26, 2004

For up to £2,000 a day, consultants advise on anything from stress to staff, but do universities need them or are they a waste of money, asks Harriet Swain

When Newcastle University was preparing its bid to be a centre of excellence in teaching and learning this year, administrators decided they needed external help. They called in a former employee with expertise in drawing up such bids as a paid consultant. "It was money well spent," says John Hogan, the university's registrar and treasurer of the Association of University Administrators.

The Higher Education Funding Council for England, which spent £2.78 million on consultancy in 2003-04 (£2.41 million the previous year), is also confident that consultants are value for money. A Hefce spokesman says outside experts are used to help meet demand at peak times and to make use of specialist skills not found within the council - such as gathering evidence to inform policies, and also providing independent, impartial expertise for activities such as evaluation of the council's activities and surveys of its stakeholders.

Quite how much money is spent each year by the higher education sector as a whole on consultants, whose fees generally range from £500 to £2,000 a day, is hard to pin down - partly because many consultants are wary of discussing figures and partly because the use of consultants increasingly touches on so many different aspects of university life.

Outside advice is sought on legal, financial, property and managerial matters, on marketing, managing stress in the workplace, handling collaborations with other institutions, appointing senior staff and even on how much to charge for the consultancy work that the university carries out through its academics.

The reason, say consultants and the administrators who employ them, is the increasing complexity of running a university. For example, more emphasis on collaboration between institutions means that it is often valuable to bring in a third party to deal with competing interests, Hogan says.

"Massification" of higher education also creates institutions that require more explicit business skills that are hard to find in-house, he says.

Gill Ball, secretary of the British Universities Finance Directors Group and finance director of Birmingham University, says that in certain areas - particularly tax and private finance initiatives - things are changing so rapidly that it makes more sense, and is more cost-effective, to employ a specialist on an as-needed basis. She says it is important to distinguish between consultancy and outsourcing. "We are not using it as a labour-saving device," she says. "We have been using consultants where we have needed specialist advice that we haven't got. If we didn't use them, we may run risks."

According to John Fielden, who runs CHEMS Consulting, all this started to take off with the Jarrat report of 1985. (Fielden claims to have carried out the first consultancy work in the sector - a textbook on university management commissioned by the University Grants Council in 1973.) Jarrat was a review of six old universities commissioned from six different consultancy firms with the aim of identifying good practice in the sector.

"That got six consultancy firms vaguely knowledgeable about higher education," he says. "It got them interested in it as a potential market."

But it was not the most welcoming of markets. Fielden says there was hostility towards consultants in the Eighties since they "did have the image of not understanding the qualitative issues in higher education".

They also perhaps needed to understand the financial issues a little better. Daily fees of £1,500-plus charged by top consulting firms were hard to justify in a struggling sector. Fielden argues that attitudes are friendlier now because more consultants come from the higher education sector, or at least are more specialised in it, and because niche firms such as his own have been established, charging a more affordable day rate of £600 to £800.

Hogan says that, while this day rate may still seem high, "what you don't see is all the work that goes on surrounding consultancy - the expertise and knowledge". He says that calling on consultants is often cheaper than employing, and perhaps training, someone on a permanent basis whose services would be needed for only a fraction of that time and who would not have up-to-date experience and knowledge.

Many academics, whose day rate tends more towards the £100 bracket, nevertheless remain deeply suspicious. Gary Day, principal lecturer in English at De Montfort University and Times Higher columnist, conducted a heated debate with Robert Mighall, branding consultant, earlier this year (Features, January 2). Day said it was "bonkers" for a university management team to hire a team of consultants to tell them what is distinctive about their institution.

Colwyn Williamson, national coordinator of the Council for Academic Freedom and Academic Standards, goes further. "Paying consultants to headhunt senior staff and to advise on streamlining the administration of universities is a symptom of everything that's gone wrong with British higher education," he says. He argues that higher education quality is declining and that this decline has been accelerated by managers who see education as "just another business" and who are prepared "to spend money on the extortionate fees of outside experts who know even less than they do about education and whose advice is invariably based on wholly inappropriate business models".

Michael Shattock, visiting professor at the Institute of Education, says that while he recalls cases in which consultants have been called in "with disastrous consequences", he is not generally against using them. "You just have to decide that the expertise they are giving you is worth it," he says. There is evidence that universities are increasingly finding outside help worthwhile. KPMG, for example, is planning to expand the dedicated higher education team it has had for more than five years because of demand for its services. Simon Hackwell, head of higher education advisory at the firm, says: "Universities were traditionally cautious about external people coming in and about opening themselves up to external view, but I think that is changing. A lot of institutions are looking to develop partnerships with firms." Fielden suggests that many university administrators like the security of a big-name firm, while Hogan says that it is top business expertise they are looking for - often they don't necessarily even want someone specialised in higher education because they feel that is expertise they have already.

But Lynda Purser, director of the Institute of Management Consultancy, advises institutions not to abandon the cautious approach. She says they need to ensure that the consultant employed is capable of doing the job, that the process is managed properly and that the advice offered is consistent. University managers nevertheless predict that the use of consultants will grow over the next few years. Shattock suggests that consultants will be used to find out how others in the sector are handling top-up fees, for example - something that KPMG also expects. Hackwell identifies "development of markets" as a growth area for his team - helping institutions to understand the markets they operate in, from undergraduate education to research-based businesses. He suggests that consultants will be particularly useful in advising universities what sort of bursaries and other support packages they should offer students. Mighall is confident that top-up fees make higher education a business, and that "if universities haven't used consultants on branding yet, they are likely to do soon".

Purser says that the increased use of consultants in higher education simply mirrors their growing importance in the economy generally. It can help maintain a loyal and secure workforce, she adds, "because they can get on with their jobs while you bring in someone who can get on with the problem facing you at the time".

'FREEDOM FROM DRUDGERY'

Gareth Thomas got the management bug when he was dean of the languages and European studies faculty at the University of the West of England. He became particularly interested in "the challenges of change" and how to achieve it. "You cannot impose change, particularly in higher education, where people are highly intelligent and challenge your judgement," he says. "You have to be very canny."

In 1996 he was appointed pro vice-chancellor of Coventry University, where he stayed for seven years, but began to feel that his work was becoming repetitive and increasingly constrained by other people's targets.

He also realised that he had become highly experienced in higher education and, as an employer of consultants at Coventry, he knew that they often lacked intimate knowledge of the sector. He retired from the university aged 60 and for the past two years has been a freelance consultant and senior associate at PricewaterhouseCoopers.

But he misses the kudos of his former post. As a pro vice-chancellor he had a certain prestige. Now he is working for clients who feel justified in imposing their views because they are paying his fees. The fees, however, are compensation. At £600 to £700 a day for two days' work a week, they are pro rata about 15 per cent higher than he was earning as a pro vice-chancellor.

He also has more flexibility - he can work from home and choose the jobs and the hours he does. What he welcomes most is the "freedom from drudgery".

Robert Mighall 's first job after studying for a PhD in Victorian Gothic fiction at the University of Wales, Lampeter, was as a junior research fellow at Oxford University. When the fellowship ended, and faced with a difficult academic jobs market, he realised he did not want to teach and became an editor for the Penguin Classics series, then a freelance editor and writer and finally a consultant with Lloyd Northover.

"I did wonder if I was selling out... I wondered about advertising and that whole world," Mighall says. "I had absolutely no reason to because what we do is a good thing. I believe in what we do."

What was a shock was the politics of the corporate world, but there are benefits. Now 36, he works less hard than at Oxford, has free weekends, works on finite projects and earns more - £47,000 compared with £12,000 as an academic ten years ago, although then he had accommodation and food provided. Because he continues writing, thinking and dealing with people in higher education, he feels he has the best of both corporate and academic worlds.

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