Is the MOD seriously going to Big 4s for bums-on-seats individual consultants. I doubt it; it’s not what the companies are about.
When you contract with a Big 4 (and many others) you are not hiring an individual. You are contracting for the company’s corporate knowledge and systems. The fee quote should clearly should the breakdown of hours, including the hours that partners, managers and administrative etc will commit to your contract.
I think you’d struggle to hire a consultant to fill an individual seat these days. You’d be in breach of The Off Payroll Regulations and IR35.
Don't entirely agree. First, I don't think the public sector even remotely has a handle on how it uses consultants. They've become a stopgap which is, as far as public accounting goes, if not exactly off the books, at least much less of a pain to manage than the formal recruitment and procurement processes.
Second, re: the Big 4, but it also applies to the contracting industry as a whole and I've seen it with much smaller examples. Hiring the company's 'corporate knowledge' is always the blurb, but anyone who works with the individuals they supply knows that is not true. You are hiring individuals who, in most cases, could easily be you or your SO3, and in the case of the MOD, often were. The vast majority don't have substantially more experience, education or talent than those in equivalent Defence or CS roles. There might be a handwave of someone more experienced, but like with legal partners in large firms, these are mostly present for the hiring and presenting to VSO, and not for the actual work they are hired for (who, in any case, the VSO or hirers aren't doing either so doesn't notice). Some companies might differ from this model, but eventually it absorbs them too: McKinsey is a great example that trades on a brand that explicitly frames itself as being more exclusive than this model, and perhaps at some stage it was, but has become large enough that it is effectively just the same as the others except with a slightly higher graduate GPA. What you pay for is the contracting companies ability to monopolise the sector, because their size allows them to fund aggressive client and business development departments and soak up all the business that might otherwise go to smaller contractors, and this becomes a self-reinforcing cycle.
In other words, the public sector inability to understand about commercial relationships you describe means that they don't understand (or care, for the usual reasons of divorced accountability and responsibility) that they are being had. Of course, they could always hire a consulting company to tell them that...
Third, IR35 isn't the problem, even with the recent changes and judgements it
should still protect small or individual contractors more than hinder them. The problem is it's largely unenforced, because of an industry model which has become accustomed to being fundamentally explotitative of both ends (client and worker) because it never gets challenged. I've seen contracts or clauses fall apart rapidly when they do get challenged, but they don't seem to change the way the companies operate, I presume because so few people challenge them. It's like the
Fight Club version of automobile recall decisions. If the cost of changing policy is more than the cost doing the wrong thing, they'll continue to do the wrong thing until it costs more than changing policy. Contracting, in a lot of ways, is basically the white-collar version of Uber or Deliveroo.
This can be gamed to the advantage of individual contractors too: I've this abroad where clients use contracting companies as a sort of recruiter - the contracting company tries to develop a business relationship with the client, but the client poaches willing individal contractors directly; the client cuts out 40% of unsupportable management and business development fees; the individual contractor gets paid more; and the contracting company discovers that their non-compete clauses and so on are unenforceable in the UK (in a large part due to IR35), and they don't know how or it's too difficult to pursue it abroad. But that requires both ends (client and individual contractor) to realise they are being had, which doesn't seem to happen so much in the UK.