Beyond hollowing out: Public sector managers and the use of external management consultants

• Published date: 01 May 2023
• Author: Ian Kirkpatrick,Andrew J. Sturdy,Nuria Reguera Alvarado,Gianluca Veronesi
• Date: 01 May 2023
• DOI: http://doi.org/10.1111/puar.13612

RESEARCH ARTICLE

Beyond hollowing out: Public sector managers and the

use of external management consultants

Ian Kirkpatrick

1

| Andrew J. Sturdy

2

| Nuria Reguera Alvarado

3

|

Gianluca Veronesi

4,5

1

York Management School, University of York,

York, UK

2

University of Bristol Business School, The

University of Bristol UK, Bristol, UK

3

Faculty of Business and Economic Sciences,

University of Seville, Seville, Spain

4

University of Bristol Business School, The

University of Bristol, Bristol, UK

5

Crown Prince Frederick Center for Public

Leadership, Aarhus University, Aarhus, Denmark

Correspondence

Gianluca Veronesi, Tyndall’s Park Road 11-13

1.08, University of Bristol Business School, Bristol

BS8 1SN, UK.

Email: gianluca.veronesi@bristol.ac.uk

Abstract

Expenditure on management consultants in public sector organizations is generally

seen as contributing to a “hollowing out”of the state through the substitution of

internal management capability. However, there is little systematic evidence for this

view which also ignores how public sector managers may, themselves, drive con-

sulting use. Looking at 125 English public hospitals over 6 years, we explore the rela-

tionship between the development and composition of management functions and

spending on consultants. Our findings show the absence of a substitution effect

and, therefore, challenge the “hollowing out”thesis. Instead, they point to a more

active, occupationally varied and political use of consultancy. We find that larger

management functions overall are associated with greater reliance on consultants—

a complementary relationship. However, where a higher proportion of managers are

engaged in internal consulting functions, this results in the lower use of external

management consultants, with implications for theory, research and policy.

Evidence for practice

•The findings challenge the widespread view that external management consul-

tancy use substitutes for in-house management functions.

•The use of external management consultancy does not lead to a ‘hollowing out’

of in-house management functions.

•Public sector organizations with larger management functions use more consult-

ing advice, suggesting a complementary relationship.

•Public sector organizations with more managers involved in internal consulting

work tend to make less use of external consultants.

“We contend that one of the major reasons

for the heavy use of outside experts is the

belief prevalent in our society that govern-

ment …is inefficient, ineffective, and staffed

with idle, incompetent, security-seeking

individuals.”(Kline, 1979, 226)

Debates about the hollowing out of the state are long

standing in the public administration literature (Milward &

Provan, 2000;Rhodes,1994). Hollowing out denotes a num-

berofprocessesthatleadtoasmallerandalteredrolefor

the state, including the loss of authority to supra national

bodies (such as the European Union) and moves to privat-

ize and outsource public services (Skelcher, 2000,5).Most

recently, the latter has become increasingly salient in the

case of expert advice drawn from management consulting

firms (Craft & Halligan, 2020). While initially concentrated in

the United States and Westminster-based governments,

consultancy use has spread further on the back of New

Public Management (NPM) reforms (Saint-Martin, 2012).

Globally, it is estimated that consulting revenue from

governments exceeded $85bn in 2018 (IBIS World, 2019).

The appeal of these services to clients includes the promise

of fast and efficient delivery, the acquisition of new skills

Received: 2 June 2022 Revised: 26 January 2023 Accepted: 26 January 2023

DOI: 10.1111/puar.13612

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribu tion and reproduction in any medium, provided the

original work is properly cited.

© 2023 The Authors. Public Administration Review published by Wiley Periodicals LLC on behalf of American Society for Public Administration.

Public Admin Rev. 2023;83:537–551. wileyonlinelibrary.com/journal/puar 537