French senators slam consultancy use ‘explosion’ under Macron

PARIS — Emmanuel Macron’s government and other public bodies have signed contracts worth at least €2.4 billion with consultancy firms since 2018, for work on issues ranging from the coronavirus vaccine rollout to digital transformation, according to a new report from the French Senate.

Lawmakers from France’s top chamber are presenting their findings Thursday after a four-month parliamentary inquiry that looked into lucrative contracts with McKinsey, Accenture, BCG and the like.

Ministries’ consulting expenses have more than doubled since the beginning of Macron’s tenure as French president, with a sharp acceleration in 2021 (up 45 percent on the previous year) due to the pandemic, according to the report from the inquiry committee — made up of a group of senators and led by the opposition.

The committee’s findings, based on data obtained from the government’s budget department, showed “an explosion” of consulting services’ uptake by the public sector. Consultancy use has become “a reflex” and consulting firms have been “involved in most of the major reforms” in France such as the pension reform scheme, the housing benefits reform and several aspects of the recovery plan, the 350-page report reads.

Leading consultancies have also been tapped to provide European benchmarks ahead of the French presidency of the Council of the EU on issues such as e-health and new industrial projects.

The Senate’s conclusions come the same day as the French president presents his platform for re-election, a month ahead of April’s presidential election.

A year after POLITICO’s reporting on the use of consultancies during the pandemic in France sparked a nationwide debate, the opposition is still using the issue to attack Macron’s tenure, arguing the level of spending on consultancies illustrates how badly the French public sector has been hollowed out. 

Minister of Public Action Amélie de Montchalin, who is supervising policies on the use of consultancies, did not reply to a request for comment.

A ‘ton of dough’

The Senate’s investigative committee, which denounced an “opacity” and a lack of accountability in the use of consulting firms, presented a detailed analysis of consultancy spending that it says represents “a ton of dough” — a direct allusion to a 2018 video of Macron criticizing social care as “costing a ton of dough,” which became a focal point of the Yellow Jacket protests.

While de Montchalin told the inquiry earlier this year that consultancies’ expenses were stable, the Senate committee concluded the opposite.

According to data obtained from the budget ministry, consultancy spending by French ministries amounted to €893.9 million in 2021, compared to €379.1 million in 2018. The total includes both strategy and management consulting and more specialized consultancies such as HR and IT services. 

While it is difficult to compare Macron’s consulting expenses to those of his predecessors because of the lack of reporting for previous periods, data disclosed by the European Federation of Management Consultancies Associations and mentioned in the report suggest a more restrained use of consultancies under Macron’s predecessor François Hollande but similar levels under Nicolas Sarkozy.

McKinsey under fire

Consulting activities in France came under the spotlight during the country’s slow coronavirus vaccine rollout in January 2021. At the time, France lagged behind Britain, Germany, Italy and Spain in its distribution of the jabs — a problem in a country that prides itself on the excellence of its public services, especially in health.

As McKinsey and others came to the rescue, politicians from the opposition said the administration could no longer fulfil its mission. They especially criticized the use of a company that had paid a $573 million settlement in the U.S. over claims about its role in the opioid crisis, and had faced corruption scandals.

The government said consultancy use made sense in a crisis situation.

The information on McKinsey’s involvement in the coronavirus vaccine rollout, first reported by POLITICO, led French parliamentarians from both the opposition and the governing party to take a broader interest in consultancy use by the public sector.

The Senate’s investigative committee has gone furthest in its work, taking advantage of its judicial powers to seize nearly 7,000 documents from ministries and also directly from consulting firms. 

The senators’ report includes confidential slides from McKinsey and emails with senior government officials. In the documents, the consultancy — which is the most targeted in the report even though it represents only 1 percent of government spending in the sector — promises key officials that it will stay “behind the scenes.”

It shows McKinsey organized an event for the Elysée pro bono, which it leveraged in a commercial pitch to another public administration — offering the latter an opportunity to participate in the Elysée public event.

The report also gives insight into France’s EU priorities through several benchmark studies commissioned from consultancy firms.

The Boston Consulting Group (BCG) was paid €196,200 to analyze “The e-health maturity of European Union countries, as part of the French EU presidency.” The consulting firm Roland Berger sent work costing €149,201 on “The costs of waste collection at the European level.” McKinsey, for its part, worked on a study on “the time required to process industrial projects in Europe, in particular in Germany, Poland and Sweden” for €403,548.

The government also paid at least €1.6 million in consulting fees to McKinsey and Roland Berger for work on its flagship pension reform, which has been postponed indefinitely due to the pandemic.

France is by no means the only country to have turned to the private sector to help run the state’s affairs and many European countries heavily rely on consultancies for outsourcing public functions, according to data from the European Federation of Management Consultancies Associations.

While recognizing that consultants can be useful or indispensable because of a lack of skills or resources within public administrations, the French Senate also pushed the idea that the consulting sector is adopting a strategy of predatory influence toward the government, raising questions over potential conflicts of interests as well as simple cost efficiency.

In Germany, the use of consultancies by the government caused a full-blown scandal that forced Commission President Ursula von der Leyen to admit “mistakes” when she was the country’s defense minister. The U.K. also pledged to reduce spending on external consultants.

The French government already announced it was putting itself on a consultancy diet in January. Lawmakers, which say the move comes too late, are suggesting implementing tougher measures and are drafting a new bill to do so.

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