Big Four’s £2.55bn revenues dominate UK consultancy market 

The consulting arms of the Big Four accountancy firms continue to dominate the UK consultancy market, accounting for over a third of revenues, and are growing faster than the rest of the sector, according to research by Source Global Research

Its report puts the UK consulting market as a whole at £6.79bn and says it grew almost four times faster than the economy in 2015, increasing by 8.2%. The combined revenues of the Big Four reached £2.55bn, a rise of 11.5%.

Fiona Czerniawska, director and founder of Source Global Research, said: ‘The UK consulting market has seen strong growth across the board, but once again it’s the Big Four that have risen to the top.

‘This is largely because clients recognise the scale and scope they can bring to bear, though inorganic growth also plays a big role. A busy regulatory environment, especially in financial services, has further served to bolster the Big Four’s position.’

The research shows financial services remains the biggest market for UK consultants and one of the fastest growing, up 14.3% to £2.2bn. While much smaller, the pharmaceutical and biotech consulting market is growing even faster, up 14.6% to £238m.

Risk and regulatory consulting has become by far the fastest growing service line in UK consulting according to Source’s data, and is up by 11.7% to £507m. The research firm says the Big Four remain particularly well situated to win risk and regulatory work as big names carry a lot of weight with the regulator.

It says cybersecurity is also having a significant impact on risk consulting, with some firms reporting 40% growth in this sub-service last year.

Technology consulting is the largest service line according to Source, growing by 8.7% to £2.69bn. Strategy consulting also had a good year in 2015, up 8.2% to £1.57bn. The retail industry also hit double digit growth, up 10.5% to £274m.

The report indicates there has been an upswing in public sector work, where revenues increased by 3.7% to £1.25bn, with Source suggesting the Big Four and technology firms are starting to report increasing volumes of work.

Nigel Slater, UK head of management consulting, KPMG, said: ‘We’re starting to see different thinking around government, particularly when it comes to working across departments and applying private sector thinking to issues such as service delivery and underlying technology investments.’

Looking ahead, the Source client survey revealed that about two-thirds (65%) of UK clients expect their consulting spend will increase over the next 18 months, which is a five-point improvement over last year’s number.

However, Czerniawska cautioned that larger clients with at least 5,000 employees are less likely to be calling consultants.

‘Only 52% of these say their spending will increase. That’s nothing to sneeze at, but it is perhaps a sign that those with their finger on the global economic pulse are feeling a little less confident going into the year.

‘If you are a consultant working in the pharma and biotech sector, we anticipate you’ll have a very good 2016. In fact, this sector is expected to outperform all other sectors with an estimated growth rate of 16%,’ she said.

Source: CchDaily

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