Management of the health crisis, reform of the APL, organization of conferences: the Senate commission of inquiry into the use by the State of consulting firms denounces in its report published this Thursday a “sprawling phenomenon”at a growing cost to public finances.
“The use of consultants is now a reflex”, she denounces. One “sprawling phenomenon”, at the increasing cost for public finances, judge the senators after some four months of work. They notably interviewed the Ministers of Health, Olivier Véran, and of Public Transformation, Amélie de Montchalin.
“It is a political will, a choice of the government to call on consulting firms instead of the administration”then deplored during a press conference the rapporteur of the commission, Eliane Assassi (CRCE group with a communist majority). “This is a deep intrusion of the private sector into the public sphere”she said again.
1,528 euros per working day
In addition to relying on private firms to compensate for a lack of internal resources or to carry out “complex missions”, the state also entrusts them “management tasks”. Expertise that is often costly, since “according to the elements transmitted by the ministries, the average cost of a day of [travail d’un] consultant amounts to 1,528 euros including tax for the period 2018-2020″. So that in 2021, the consulting expenses of the ministries reached 893.9 million euros. A marked increase in the amount during Emmanuel Macron’s five-year term: in 2018, it was limited to 379.1 million euros.
Last month, the executive had however announced that it wanted to rely more on the pool of the French administration. And Prime Minister Jean Castex had also drawn a circular in mid-January to regulate the use of “intellectual services”. But she has no ‘binding character’, point the senators, and the objective of reducing consulting expenses by 15% in 2022 is “unambitious”. Unconvinced by this “government announcement effect”, they recognize nevertheless that the expenses of council of the State remain well lower than those of the British or German administration.
Another nuance, the use of private practices “has not started under this five-year term”. “Everyone remembers the assumed call for consultants during the general review of public policies” initiated under the presidency of Nicolas Sarkozy, notes the commission. Nevertheless “consulting firms have intervened in most of the major reforms of the five-year term, thus strengthening their place in public decision-making”, deplores the report.
“20 firms alone represent 55% of the advice to ministries.”
This is notably the case of McKinsey. The government approached the cabinet both on the reform of the method of calculating personalized housing aid (for a total amount of 3.88 million euros) and in the context of the vaccination campaign against Covid-19 (12, 33 million). “The documents consulted by the commission of inquiry show a massive intervention by McKinsey on the vaccine campaign, for almost a year”, notes the committee. Other firms have supported the State on important issues, such as Capgemini, which has helped develop the Barometer of the results of public action (3.12 million euros) or Semaphores, responsible for helping prefectures to secure the distribution of electoral propaganda (approximately 290,000 euros).
The public sector consulting market is concentrated: “Twenty firms alone represent 55% of the advice to ministries.” During the health crisis, three players (McKinsey, Citwell and Accenture) absorbed three-quarters of state consulting spending, the report said.
And if the representatives of the cabinets defended themselves during the hearings from any political or decision-making role, the senators remain skeptical. Consulting firms have indeed “for the habit of “prioritizing” the proposed scenarios” to the administration requesting them, “which reinforces their weight in public decision-making”. The committee is also concerned about a “addiction” of the public authorities towards certain actors and pleads for “the transfer of skills from consulting firms to the administration” be returned “more effective.”
Among their nineteen final proposals, the parliamentarians suggest publishing the list of state services and its operators in open data. They are also in favor of a systematic review of consultancy services over 150,000 euros and the prohibition of free services for public authorities. Another track: the systematic destruction, at the end of their mission, of the data entrusted to the firms.
Finally, the senators are counting on the High Authority for the Transparency of Public Life, whose resources they wish to strengthen so that it can control compliance by the cabinets with their ethical obligations. “The health crisis has highlighted the intervention of consultants in the conduct of public policies. It was just the tip of the iceberg,” decides the commission of inquiry.
Tax optimization
In addition, the Senate commission of inquiry accuses the French entities of the McKinsey firm of tax optimization. The private structure is “well subject to corporation tax in France but its payments have been zero euros for at least ten years”, denounces the senators. That then “that its turnover on the national territory reaches 329 million euros in 2020, of which approximately 5% in the public sector, and that it employs approximately 600 employees” in France, insist the senators.
This information is published two months after the hearing by the commission of the head of the public sector division of McKinsey, Karim Tadjeddine. “I say it very clearly: we pay corporate tax in France”he then assured.