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McKinsey: the blade of grass that hides the forest from state failures

As the state grows, it drags with it everything it touches in a perverse and ineffectual connivance, recourse to McKinsey included.

On March 16, the Senate Commission of Inquiry into the Influence of Private Consulting Firms on Public Policy produced a fairly explosive report, informing us that spending on state consulting services, described as “money crazy”“had more than doubled” between 2018 and 2021 (from around 500 million to one billion euros) and concluded that there was a “sprawling phenomenon” .

The McKinsey Affair

The graph below, taken from the report in question, illustrates this evolution. It should be noted that the figures indicated – 379 million in 2018 and 894 million in 2021 – only concern the ministries, excluding state operators such as Pôle Emploi and others, hence the difference with the amounts announced above. :

It was the 2020-2021 health crisis that brought to light in an unprecedented way the important place granted by the State to external advice. The senatorial commission underlines to what extent the latter were able to build a cozy nest for themselves in the total unpreparedness of the State in the face of the pandemic. During this period, the firm McKinsey recruited to organize the vaccine campaign clearly hit the jackpot, followed by the firm Citwell responsible for the supply of masks:

On reading the Senate document, however, it turns out that the “McKinsey scandal” which has consequently been agitating the presidential campaign for two weeks is rather misnamed in the sense that this firm is far from being the most active among the major firms. private individuals working for the public authorities. The diagram below on the left gives the share of the various consultants in the consulting market for ministries, but as the report specifies, it ignores IT services, which amounts to understating the real importance of companies specializing in this area like Accenture or Capgemini. For its part, McKinsey is at 1%.

The McKinsey affair is a problem with the functioning of the state

Likewise, wanting absolutely to transform the said McKinsey affair into MacronGate falls rather badly insofar as all public entities, regardless of their political color, have recourse to the services of external consultants and where the level of expenditure currently observed in this area was already that of the years 2009 and 2010 – under Nicolas Sarkozy’s five-year term at the time of the famous General Review of Public Policies or RGPP if I’m not mistaken (diagram on the right):

We could also say that the level of recourse by the French State to outside firms is very reasonable compared to what is practiced in the United Kingdom and Germany, as can also be seen in the diagram above at law.

The fact remains that this situation poses some serious economic and ethical problems. Less because of the characteristics of the consulting firms themselves than because the term “sprawling” used by the Commission of Inquiry against them actually applies primarily to our French State.

However, a sprawling state, through its high expenditure ( 1,423 billion euros or 61.6% of GDP in France in 2020, but already 55.4% before) and through its permanent normative intrusion into a growing mass of human activities, without forgetting its monopolies on education, health, and the social protection system, is a State which tends, on the one hand, to become wasteful and inefficient and from which, on the other hand, it is increasingly difficult to escape completely in their daily activities.

a complicity

This automatically results in forms of connivance, that is to say, this idea that faced with a devouring state that is widespread everywhere, it is preferable to stroke the beast in the direction of the hair, even to influence it gently in order to obtain favorable markets and/or legislation. Services between willing friends and other referrals between elected officials, public authorities, and private actors, all obligated to each other, are around the corner. Typical distortions which, by affecting both the free play of the economic market and the democratic system, harm each of us as consumers, taxpayers, and voters.

Concretely, on the subject that concerns us here, you should know that the civil service workforce as kept up to date by INSEE is in fact only the visible part of the state iceberg (table below).

In addition to civil servants recruited via public service competitions, in addition to contract workers who, as their name suggests, have an employment contract  (under public law, convertible by internal competition into civil servant status) and in addition to “other statuses” such as hospital doctors or teachers in the private sector under contract, for example, the offices of ministries and local authorities also house individuals of a fourth type: consultants.

They are remunerated by their employer, which is a consulting firm that is paid by the State in the form of fees in exchange for an intellectual service generally relating to questions of strategy, organization, or IT development. – the latter area is famous for giving civil servants nightmares.

These consultants, therefore, do not appear in the civil service workforce or in the payroll. Their “recruitment” is done via the State Purchasing Department (or DAE – Bercy) for ministries, their agencies, and public establishments, and via other purchasing departments for local authorities, exactly as for cars duties, fuel, national defense equipment, rubber and reams of paper. It is indeed a question of “purchasing” service in order to obtain skills or reinforcements that cannot be found internally.

However, the public sphere is a very poor “buyer”. From the moment its agents spend money that does not belong to them (tax revenues or new debt) for beneficiaries other than themselves, one can be certain that negligence will be numerous and the quality report – a middling price. The same consultant recruited by a private company will be subject to an obligation of result (or the door) much more severe. Hence the risk of seeing a plethora of firms encrust themselves with delight in public services with little regard for the efficiency that the taxpayer would be entitled to expect.

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