Will management consultants be regulated?  The clues are starting to appear.

Jenifer Frederick MIMC CMC 28 Nov 2023

Rebuilding Trust.

The IMC’s Panel Forum last week on “Rebuilding Trust – Next Steps for Management Consultants” showcased the IMC’s approach and thought leadership in relation to the Senate Committee Inquiry into the management and assurance of integrity by consulting services.  That Committee’s final report is due on 28 March 2024.

IMC members will shortly be able to see the video recording in the IMC Members Section of www.imc.org.au.

Changes are already being felt.

The impact of the Senate Inquiry on the management consulting profession, whilst incomplete, is already being felt in the contraction of the government consulting contracts, changes to procurement arrangements for management consulting services to government and a reduction in contracts for labour hire.

The Assistant Treasurer is examining a regulation for consulting.

In a media release by the Assistant Treasurer and Minister for Financial Services on 6 August 2023 https://ministers.treasury.gov.au/ministers/stephen-jones-2022/media-releases/government-taking-decisive-action-response-pwc-tax, and in the fifth dot-point setting out the government’s approach to “Strengthening our regulatory arrangements”, it was stated that “A Treasury examination of the regulation of consulting, accounting and auditing firms to consider whether reforms are needed.  This work will require collaboration with states and territories, given cross‑jurisdictional regulation of partnerships, as well as engagement with ongoing Parliamentary committee inquiries.”

“A Treasury examination of the regulation of consulting, accounting and auditing firms to consider whether reforms are needed…”

Assistant Treasurer and Minister for Financial Services media release 6 Aug 2023

A new Government Consulting Office.

The establishment of the Government Consulting Office in August as part of the Department of Prime Minister and Cabinet and the release of the Strategic Commissioning Framework  APS Strategic Commissioning Framework | Australian Public Service Commission (apsc.gov.au) by the Australian Public Service Commission are indicative of a new and significantly different approach by the Commonwealth Government intended to dramatically and reasonably immediately reduce its reliance on external management consultants.

Redundancies rising.

Already, we have seen redundancies and reductions by some of the larger consulting firms, with over 550 job losses reported by the media in the last few weeks.   IBISWorld reported in March 2023, 94,833 management consulting businesses are employing more than 168,000 people in Australia.  Whilst not all those work in the government management consulting sector, many do, and the flow-on effect of this Inquiry to the private sector is yet to be measured.  

Significant changes are pending.

This is a time of significant change for management consultants in Australia – existential threats and new opportunities.  Whether your clients are in the private or public sectors, this inquiry and its report will lead to significant changes in the Australian consulting environment and will likely have international repercussions.

Jenifer Frederick MIMC CMC
Principal of Galifrey Enterprises Pty Ltd and Growing Your Own Self