The Consultant’s Dilemma

One episode in the public inquiry into the Renewable Heat Initiative (RHI) was particularly interesting because it highlighted a dilemma many business consultants face. This is an issue with significant implications but about which many people appear to be unaware, says Simon Bridge, Ulster University Visiting Professor.

Under the headline “Civil servants ‘tampered with the expert analysis’ of cash-for-ash scheme”, a newspaper reported that the inquiry had been told that the Stormont department which set up the scheme effectively tampered with the findings of independent experts.

More specifically it indicated that consultants had been contracted to recommend the best way to encourage renewable energy use. However the consultants’ conclusion that another scheme would be better than RHI was not what the department wanted to hear – so the consultants agreed not to make a recommendation in their report.

When this contradiction was put to one of the consultants by the inquiry committee, he explained that there would have been a renegotiation of the contract and therefore of “what the final position would be”.

The inquiry chairman appeared to be surprised at this and suggested that this was a novel interpretation of contract law – but was it really that strange and, if such ‘renegotiations’ do happen, what are their implications?

This problem arises because if, as a consultant, you are hired by a client to evaluate a policy or project then, if the client is the organisation responsible for formulating and/or delivering that policy or project, then what the client says it wants and what it actually wants are often different things.

Usually the client is constrained by purchasing procedures and guidelines to seek an impartial expert view but what the client really wants is a report which reflects well on the client because it praises the policy or project in question and concludes that it is a good initiative well delivered.

Although this difference seems to surprise many people, not only is it happening but it is inevitable given the current system.

If you consult a lawyer for a legal opinion on the merits of a case you expect an honest objective answer but if you hire a lawyer to argue your case you expect him or her to highlight its merits and not its problems – not to falsify it but to put across its good points.

The legal system clearly distinguishes between these two situations – but what is happening when consultants are asked to evaluate policies and projects often confuses them because, under the apparent cover of expressing an opinion, consultants are often actually expected to provide arguments for the client’s case.

This a situation where often he who pays the piper wants to call the tune and, in such a instances, consultants are likely to realise that if their report does not please the client then there is a very strong likelihood that they will not be considered to have done a good job and therefore are unlikely to be hired again.

If, for reasons of integrity, consultants insisted on delivering the objective view contracted they would not overtly be faulted but, if that objective view nevertheless displeased the client, then the consultants might expect that a reason would somehow be found not to include them short lists for future work.

Other examples are to be found in ‘green book’ economic appraisals which are supposed to be impartial assessments of the best way to address a specific need before detailed plans are produced – but they are often done when plans are fully formulated as ‘an umbrella’ to provide cover should something go wrong.

So consultants are hired to undertake an appraisal which supports the project – and that is frequently possible because, particularly for projects which are not purely monetary in their objectives, economic appraisals are more an art than an objective science – and criteria and comparators can be chosen which steer the exercise to the conclusion required.

When there is a strong motive to please the client, other ways can also be found to avoid producing a negative report. Consultants night agree to amend a first draft, supposedly on the grounds that the client has presented new evidence, or can come to share a view with the client on what is relevant information and thus manage not to look for, and thus not to see, any awkward evidence which might suggest a negative conclusion.

This might be described as wilful ignorance or ‘unknown knowns’, but it does happen. And the pressure to do it doesn’t have to be overt – all that is required is a mutual understanding that prompt payment, a good commendation and the possibility of future work require a report that the client likes. Then there doesn’t have to be a ‘renegotiation’ of the contract, as it seems happened in the RHI case, because the evidence that the consultants find and report will appear both to fulfil the terms of the contract and support the client’s case.

Some consultants may be more amenable to pressure (or, in the client’s view, more understanding of what is required) than others – and in some situations it may be clearer that consultants are being hired to be advocates of a proposition rather than objective judges of it. But the result is that, without further insight, it is often not possible to tell if a positive supposedly impartial report is truly objective. So if we don’t know how many or which ones are thus affected, we must suspect all of them.

What should we expect consultants to do when it is clear (whether overtly stated or not) what answer is required, and that future work depends on delivering it? The prevalence of this dilemma should not be a surprise because it is a consequence of the current system where those who ‘own’ a policy or project, and therefore want a good report about it, are responsible for hiring those who are going to examine it.

What do people expect – that consultants will always show complete integrity and be completely inclusive and honest in their reporting, even if by doing so they may be excluding themselves for future work?

Consultants aren’t all going to change that by suddenly putting integrity above income. So will the clients, the various parts of the government system, change it? Actually it is in their interests to do so because they would like the consultants’ reports to be believed and because honest objective reports which highlight what isn’t working and/or indicate possibilities for improvement are essential for making things better. In their economic policies governments preach the need for innovation but do not apply that to themselves.

Throughout history the way to make things work better has been through ‘trial and error’; but we shouldn’t call it error because it should be trial and honest feedback leading to improvements – and that means looking for problems, not trying to avoid finding them. Aircraft are as safe as they are because indications of potential problems are not avoided but are sought and explored to see if there is indeed an issue to be corrected. But, if ministers and civil servants are more concerned to be seen to be right than they are with actually getting better, they will continue to look for reports which support the view that they are doing the right things. In this situation the system does not reward integrity.

One way to avoid placing undue trust on supposed experts whose expressed view favours one side of an issue is adopted by the legal system when a judge hears cases both for and against the proposition. It may well be that the evidence presented by the prosecution is correct but the system requires that a case is also made for the defence which should test the prosecution arguments to see it they do indeed stand up to scrutiny. But few other parts of the government system follow that example.

So, unless and until the system changes, what can we do?

We could start by recognising that this dilemma can and does happen and, because of this, we should then discount all positive reports done on behalf of such clients in the expectation that they could be biased. Could it happen that, if enough people stopped believing such reports about government policies and programmes on the grounds that they cannot tell which are honest and which are not, government departments might realise that there is a problem?

The report on the RHI inquiry quoted at the beginning of this article said that “the evidence raises questions both about how Stormont uses consultancies and how some firms appear to allow themselves to be used in shaping recommendations to meet what the client actually wants in the first place.”

What do people expect – that consultants will always show complete integrity and be inclusive and honest in their reporting, even if by doing so that may be excluding themselves for future work? Or should the pressure be put on Stormont not to put consultants in such an invidious position?

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