Y2K scam rerun: Brexit ‘fixers’ are making a killing
Over the past three years, as we have torturously debated our departure from the European Union, we have heard a lot from the Brexiteers about the industries that might benefit from leaving the EU. Some of these predictions may materialise, others may not. There is one industry, however, that is already doing very well as a result of the referendum. Lots of consultants are making a shedload of money.
In the past few weeks, it has become clear just how much. Brexit ‘grifters’, to borrow a phrase from the classic 1990 movie, are roaming the country, occasionally helping companies cope with a significant yet hardly earth-shattering change in trading relations with our closest neighbours, but rather more often delivering over-hyped, hammed-up warnings of disaster to sell a service which is completely useless. Rather like the millennium bug scare at the turn of the century, Brexit consulting is turning into an epic scam. Indeed, much of the alarm over our departure may simply be the result of the advice industry over-selling itself.
There is no question that consulting on Brexit is now big business. Last month, PwC, one of the largest consulting firms, reported bumper profits and payment to partners of £765,000 each, on the back of a 22 per cent rise in consulting revenue, much of which was related to Brexit. According to the Management Consultancies Association (MCA), the industry is now expanding at the secondfastest rate in a decade, in part because of work on our departure from the EU.
The government has been spending money like crazy. Earlier this year, it was reported it had already racked up £75 million in consulting fees, with the bulk going to big firms such as McKinsey, Bain, Deloitte, PA Consulting and EY. Those outfits will be making even more from the private sector as companies use their expertise to get ready for our departure.
And that is just the established firms. In the past three years, a whole new industry has also appeared out of nowhere. Search ‘How to become a Brexit consultant’ on Google and 15.3 million results appear. The website ‘Start-Up Ideas’ rated it as one of the most lucrative opportunities of 2017, placing it in its top three alongside selling mescal tequila and products related to hygge, the Danish lifestyle trend. ‘Becoming a Brexit consultant is a perfect idea for anyone who can shift [sic] through policy, who follows the news closely, and has a feel for how things are going in the United Kingdom,’ it advises helpfully, in case readers were worrying the work might turn out to be a little onerous.
True, many of the people involved know what they are talking about. Mats Persson, the former research director of Open Europe who later became an adviser to David Cameron, went on to run the international trade and Brexit unit at Ernst & Young. Sir Olly Robbins, who had been negotiating our departure, is set to join Goldman Sachs. A lot of the work being done is of high quality and there is most likely more to the rise in consulting revenues than just Brexit. ‘I don’t think there has been a big Brexit boom,’ says Tamzen Isacsson, chief executive of the MCA. ‘There have been some firms that have done a lot of work, and others that haven’t been impacted. Of the companies that are offering Brexit advice, they are drawing on a huge amount of expertise and experience.’ True enough. Leaving the EU, if it ever happens, will involve re-working supply chains, working out how to preserve access to the single market and putting in place new systems to cope with increased paperwork. Those are all serious, if not terribly difficult tasks, and because it is a one-off event it makes sense for companies to hire advisers to get all that done.
And yet it is still worth asking whether most of the advice is really worthwhile, or whether it might even be making the problem worse. After all, no one really has any idea what will happen, so what can you usefully say or plan for? A glance at some of the guidance is not terribly encouraging. ‘The answer,’ to the Brexit conundrum, according to the website of PA Consulting ‘is to embed agile ways of working into everything — centre on the customer, speed up time to value, design for simplicity, build to evolve and liberate colleagues.’ It all sounds a lot like management gobbledegook simply reheated for a new audience.
Even more worryingly, a lot of consultants may be over-hyping the dangers. Let’s take one example. A report issued by KPMG last month warned that house prices could fall by 6 per cent in the event of a no-deal Brexit. But KPMG also has a team of consultants advising on Brexit. Is it neutral? Not really. Predicting catastrophe drives consulting gigs. Saying everything will be just fine doesn’t.
By arrangement with the Spectator