MANAGEMENT CONSULTANCY SERVICES (Hansard, 1 May 1969)

§ THE EARL OF KINNOULL
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ THE MINISTER OF STATE, BOARD OF TRADE (LORD BROWN)
My Lords, in the Board of Trade's pilot consultancy grants scheme in Glasgow and Bristol, which ended on February 28, 1969, applications were invited from all businesses in the two areas which employed between 25 and 500 people. These limits have not however been strictly interpreted, and applications from some businesses outside these limits have been approved.

§ THE EARL OF KINNOULL
My Lords, while thanking the noble Lord for that reply, may I ask whether he can indicate how many firms applied, and how many were successful? Also, can he say what the average grant was, what it amounted to?

§ LORD BROWN
My Lords, I am in a little difficulty in replying, because I am not sure that I have any figures to satisfy your Lordships. I can say that the actual number of applications was very large indeed—something of the order, subject to checking, of 1,100. But of that very large figure, a substantial number came from firms outside the area originally specified in the hope that they would be included. A large number of the other applications came from firms that were in fact larger than the 500 limit, and they had to be excluded on those grounds. With regard to the average size of the grant, I am afraid I do not have the figures here. I will write to the noble Lord. Perhaps ho could make some lightning calculations; in his head if I tell him that the actual number of firms that have been granted assistance is 250, with some others still pending. It may come up to 300. The total sum expended was nearly £500,000. I am sorry 943 that I cannot take the noble Lord further at this moment.

§ THE EARL OF KINNOULL
My Lords, could the noble Lord advise us for how long the Government expect to evaluate the pilot scheme before coming to a decision on whether or not to implement the national scheme?

§ LORD BROWN
The major task is not one of evaluation. We are satisfied, on previous experience in this country and in Northern Ireland, that to get consultants of a sound kind into firms is good, and we do not need experience to prove that to be the case. We wanted administrative experience in administering a scheme of this type; so we are not waiting for a necessarily long period to evaluate the results of these consultancies, which might be three or four years. It is a question of working out a scheme and then finding legislative time for it.

§ THE EARL OF LAUDERDALE
My Lords, could the noble Lord say how soon he expects the pilot scheme to be introduced, in view of the administrative problem he has just mentioned?

§ LORD BROWN
My Lords, you will appreciate the difficulty in asking me to say when it will be possible to allot legislative time. I personally hope that it will be as soon as possible. I am extremely interested in the scheme, which I think is valuable. I cannot give you a date.

§ THE EARL OF LAUDERDALE
My Lords, are we to understand that it requires legislation? Can it not be done by administrative action, as hitherto?

§ LORD BROWN
My Lords, I think this is a marginal case. The decision has been taken in principle that this requires legislation.

THE DUKE OF ATHOLL
My Lords, is the scheme marginally limited to firms of less than 500 employees, or was this purely for the pilot scheme?

§ LORD BROWN
My Lords, it is an arbitrary figure. We felt the larger firms had proved that they were able to look after themselves in this respect. They had learnt to value consultants in general. It was the smaller firms which had not appreciated the value of having part of 944 their operations analysed in this way and which needed this stimulus. That figure was a quite arbitrary selection but in the light of experience of this pilot scheme, we believe that we have chosen the correct figure, although this is still subject to discussion.

§ LORD IRONSIDE
My Lords, can the noble Lord say what type of management (consultant has been involved in this pilot scheme—for example, technical or administrative, or production, or manufacturing? Is it for that type of thing?

§ LORD BROWN
My Lords, the biggest proportion of the consultancies, we find, has been in the field of management, production control, and so on. There has been a big periphery of consultants' schemes involved with many other types of consultancy—too many to enumerate, particularly in the field of marketing, and more erudite studies concerned with the introduction of some of the latest techniques.

§ LORD WAKEFIELD OF KENDAL
My Lords, how soon is it expected that information will be available on the increase of productivity which will, it is hoped, arise from the institution of these management consultancy arrangements?

§ LORD BROWN
My Lords, we do not set ourselves up to try to measure quantitatively the results of the employment of these consultants. This would involve a very serious body of extremely experienced staff, which we do not possess, to check the results in this way. We are satisfied, in the large and broad, that the use of sound consultants for a business almost inevitably increases the efficiency and the prosperity of that business, and we are accepting that.

§ LORD WAKEFIELD OF KENDAL
My Lords, surely there must be some information available in individual firms of what their productivity was before the management consultants were appointed. And surely, in one, two or three years, the results arising from the consultancies in the increased productivity which we all hope will be obtained, must show in the company returns. Is it not possible to get some information of that sort?

§ LORD BROWN
My Lords, we are getting a report from each firm at a subsequent date but, with great respect, this 945 subject often comes up. To attempt to correlate the total results in quantity of production with the single factor of introducing consultants is a barren game. It is impossible to do this, because there are many variables operating in the situation during which the consultancy took place. It is impossible to establish a correlation that many people, and in particular the noble Lord, would like to see.