How consultants like McKinsey took over France

PARIS — The elite civil servant occupies a special place in the French imagination. Civil, refined, unflusterable, a steady hand on the state tiller — what James Bond is to the British spy service, the haut fonctionnaire is to the French ideal of administrative governance. 

But lately, a new breed of bureaucrat has been prowling the Parisian corridors of government power. High-powered consultants from firms like McKinsey, Accenture, BCG and Capgemini are playing ever-more important roles in delivering basic government services — replacing, or even displacing, a generation of public civil servants.

New figures seen by POLITICO show that McKinsey obtained the lion’s share of a raft of recent contracts signed with six consulting firms for COVID-19 related projects, with €4 million out of a total of €11.2 million going to the leading consulting firm alone.

Conservative lawmaker Véronique Louwagie, a budget rapporteur on several health files, who obtained the details of the contracts from the health ministry, said she wanted to “sound the alarm” after her findings.

“Generally speaking, hiring consulting firms doesn’t shock me too much,” she said. But “the frequency bothers me, the acceleration [in recent months] too,” she added. “The question today is: Is it normal for an administration such as the health one not to be able to fulfill a number of missions?”

France is by no means the only country to have turned to the private sector to help run the state’s affairs. Many of its neighbors — the United Kingdom, Spain, Germany, Switzerland — have relied on consultancies for years, if not decades.

But a practice that is increasingly seen as normal elsewhere has sparked controversy in France, a country that has traditionally taken great pride in the quality of its civil service and looked askance at the private sector’s intrusions in public matters. News that McKinsey was working on France’s vaccination efforts — first reported last month by POLITICO — was greeted by outrage from opposition politicians. 

And yet, France has increased its use of consultancies in recent years, according to a review by POLITICO of public datasets on public tenders, internal documents and interviews with more than 30 professionals from the public administration and consultancies. The French administration has made public at least 575 contracts with private consultancies since October 2018, for services ranging from crafting economic recovery plans to charting a path to carbon neutrality to helping battle the coronavirus.

Work for the public sector accounted for nearly 10 percent of revenues at French consultancy companies in 2018, amounting to €657 million, according to the European Federation of Management Consultancies Associations (FEACO). That puts France ahead of Italy and Spain in terms of spending, which both began using consultancies much earlier, but still behind the United Kingdom or Germany — where revenues from the public sector account respectively for more €2.6 billion and €3.1 billion.

Whether one sees it, as many surrounding President Emmanuel Macron do, as the modernization of an ossified bureaucracy, or as a foreign practice that raises important questions about transparency, accountability and the erosion of the French state, what’s clear is that, with little public debate, private consultancies are playing an ever more important role in the delivery of basic government services. 

“I think that the state has lowered its guard and that maybe France has disarmed itself in health matters,” Louwagie said. The MP will present her conclusions on February 17.

Zooming with McKinsey

Every day at 5 p.m., top officials from the French health ministry tune in to one of many daily meetings set up to oversee the rollout of vaccinations. What’s different about this Zoom call is that it’s not chaired by a civil servant, but by a consultant from McKinsey & Company.

Since November 30, the American firm has been tasked with rescuing the country’s vaccination rollout, for a total amount of €3.4 million, according to figures obtained by Louwagie. Another €600,000 was billed by the consultancy for the implementation of a “strategic control tower” at Public Health France, the country’s health agency.

Since March last year, the government has also hired consultancy Citwell to help out with logistics on vaccines and personal protective equipment, for €3.8 million. It also recruited Accenture for IT services related to the vaccination campaign, for a total of €1.2 million. Another €2.2 million was spread out between Roland Berger, Deloitte and JLL Consulting.

“We have 26 contracts in 10 months, that’s one order every two weeks … That represents €1 million per month and €250,000 per week in consultancies,” Louwagie said.

McKinsey’s Paris office, JLL, Citwell, Roland Berger, Capgemini and Accenture declined to comment on the record for this story.

The consultancies do not intervene in the execution of policies nor policy choices, the health ministry said in a previous statement, but provide external expertise on logistics and project or data management.

The government declined multiple requests for comment from POLITICO.

The use of consultancies “has really accelerated towards the end of 2020,” said Louwagie. “You can wonder if there’s some sort of panic effect,” she added, as France’s sluggish start to the vaccination campaign was criticized in the country.

At least two partners and seven consultants from McKinsey work on the vaccination campaign along with staff from the four other firms and a dozen civil servants, who said they had no option but to rely on this extra help because of increasing burnout and fatigue felt under the pressure of the coronavirus crisis.

“One out of two people is in burnout,” said a health ministry official, who requested to remain anonymous because they were not authorized to talk publicly about the matter. “You have a crisis, a lockdown, plus the vaccine to manage … It’s obvious that there is a need for outside help.

“Even if we could have foreseen it, you don’t invent civil servants in six months or a year,” the official added.

A health ministry insider said one public-sector staffer recruited to join the task force left in less than 15 days because of the difficulties of the task, a fact also reported by investigative media outlet Mediapart. By contrast, the consultants don’t count their hours, the insider said.

“[When] I see that some of the missions are aimed at ‘managing in an efficient way the strategic stocks of Public Health France,’ I cannot help but wonder: Should operations of this nature be managed by the administration itself or is it normal for a mission of this kind to hire an external firm?” said Louwagie.

For McKinsey and the like, involvement in top-level projects comes with high risk of public backlash, but also high potential reward: privileged access to the French ruling class.

The prestigious Boston Consulting Group (BCG) — which has its Parisian headquarters just a few blocks away from the National Assembly — laid out the reasoning behind chasing public-sector accounts, despite their lower margins. 

“There is a logic of investing, and investing in particular in people who are senior public servants today, who are influential people in the public sector, who will be influential in the private sector tomorrow,” said Jean-Christophe Gard, a partner at BCG, during an internal online seminar in November, a recording of which was obtained by POLITICO.  

Lucie Robieux, a public-sector expert at the consultancy and a former employee of the budget ministry, explained during the same event that the company was “very much involved in discussions at the highest level, at the Elysée [presidential palace] and [the prime minister’s office] Matignon, but also with the directors of the central administrations.”

“This obviously prepares tomorrow’s business and perfectly positions BCG in discussions to influence public decisionmakers,” she said.

BCG declined to comment on the record. 

The president’s men 

France first started to flirt with consultancies in the late 80s, but only really opened its doors after the 2007 election that saw Nicolas Sarkozy ascend to the presidency. The center-right politician had promised to make the French state cost efficient. He hired McKinsey, Deloitte, Cap Gemini, BCG and Accenture for deals worth about €250 million during his tenure.

Those early consultants mostly worked on human resources and digitalization, but some were also hired as head of public transformation, raising eyebrows among policy experts and France’s court of auditors. 

Over the years, the company’s connections to top-level politicians improved, to the point where they were sometimes called upon to contribute to legislative work.  

In 2015, Macron, then economy minister under President François Hollande, tapped McKinsey to help him draft a bill intended to improve economic opportunity known as Noé, according to internal emails from 2015 of people involved in the matter, obtained by POLITICO.  

Macron “personally [chaired] the steering committee,” which included public servants and “qualified personalities” such as Eric Labaye, then head of McKinsey Paris, which was providing background work on the bill, according to one of the emails.

Labaye was a former colleague of Macron, whom he had met in 2007 when both were members of the Attali commission — a high-level group of experts who had been tasked to think of ways to improve French economic growth — and was appointed as head of the Polytechnique elite school in 2018.

The result of Macron’s work with McKinsey was a TEDx-style presentation in November 2015 that is widely seen as one of the first steps on his path toward the presidency and a foretaste of what would become his political platform, with its focus on business competitiveness, digital transformation and fiscal measures to attract investors.  

The Noé bill was eventually dropped by Hollande and his Prime Minister Manuel Valls — and it was this disappointment that reportedly motivated Macron to leave the Socialist government and run for president. His early supporters included top consultants like Karim Tadjeddine and Eric Hazan, two senior partners in McKinsey’s Paris office, and Guillaume Charlin from BCG, as unveiled in the so-called Macron leaks, a raft of internal campaign emails published by WikiLeaks in 2017.

Culture clash

After Macron entered the Elysée in 2017, consultancies ramped up their public-sector activities, according to multiple sources and documents from the industry as well as data analysis by POLITICO.

Since October 2018, the French government has had to share information on public tenders. The resulting database shows that at least 575 contracts were signed with consultancies — 137 of them by central administrations, defined as ministries or any other national authority, including their regional or local subdivisions. The data doesn’t contain detailed information, such as a breakdown of services provided, their nature and price tag. Nor does it include contracts signed prior to October 2018 but carried out later, such as the €100 million contract under which McKinsey is working on the vaccination campaign.

McKinsey has also been working on the country’s economic recovery plan, events aimed at fostering tech investments in France at the Elysée and was awarded jointly with other consultancies an €87 million defense contract.

Capgemini, a French consultancy which also provides IT and project management services, was thus tasked with developing new rules at the French borders ahead of Brexit and is advising on artificial intelligence regarding the government’s Health Data Hub. It also worked along with other consultancies pro bono on the French coronavirus app TousAntiCovid.

Accenture, which also provides IT services, won a €32 million contract to evaluate public spending for the economy ministry, according to the database. It is now in charge of developing digital infrastructure for the vaccination campaign. 

The Boston Consulting Group is charting a path toward carbon neutrality and has worked on the French national service for teenagers, according to internal documents. The 2019 mobility bill was partly drafted with Dentons, together with Espelia, according to news magazine Marianne. A national debate following the Yellow Jackets protests was analyzed by Roland Berger, which often works with the finance ministry to evaluate growth opportunities.

Several key players in Macron’s La République En Marche party have experience in consultancies. These include Paul Midy, director general of LREM, and Mathieu Maucort, who was a big player during the 2017 campaign and became chief of staff in the finance ministry, both of whom once worked for McKinsey.

The connections between the American firm and Macron’s party have elicited accusations of conflicts of interest from the president’s opponents — but a better way of looking at them is as the product of closely knit networks among the Parisian elite, said an official who worked with consultancies for years, as part of the Hollande and Macron administrations, and spoke anonymously for fear of losing their position. 

“It’s a gang,” the official said. “It’s the same people, the ones with the money and the smooth talk. They’re all beautiful people, with a frightening self-confidence … and they all studied at the same schools.”

‘Monstrous baby’

These new entrants into the French administrative state are gate-crashing an establishment known as the Grand Corps, a class of elite civil servants trained at France’s top Girandes Écoles like Sciences Po, Polytechnique and the highly selective National School of Administration (ENA). Graduates of this last institution are sometimes referred to as “Énarques,” a play on the acronym and the Greek suffix for power, “arkhos.”

“It’s not like in the U.S., where 5,000 top civil servants just stay for a term and then go,” said Pierre-René Lemas, who served as chief of staff at the Elysée under Hollande. “The image of public service in France has been quite sacralized … because France was built around the state.”

Though many consultants have attended the same schools, the American-style managerial culture can sometimes clash with French tradition, according to Claude Revel, who served as a top-level public servant and is now an essayist and consultant. 

“It is completely different from the French concept of public service: It’s built on an economically liberal mindset and a legal framework which is not the same as ours,” Revel said. “We now have a monstrous baby with the flaws of both parents: bureaucracy and managerial culture.”

Macron, an énarque himself, has said he wants to reform the school to make it more meritocratic, but he has been forced to tread carefully.

“When one meddles with our administration in France, it’s like meddling with French identity itself,” said Fabien Gélédan, a researcher in public administration and a former consultant himself. 

Controversy over the use of consultants has even turned into physical protests. After news broke last spring that the consultancy Bain was working on France’s coronavirus testing, a group of Yellow Jacket demonstrators showed up at the company’s offices in one of Paris’ upper-crust neighborhoods.

At the front desk, the protesters demanded answers as to why a “private American company was in charge of France’s lockdown exit plan” — likely referring to their work on testing — in what they claimed was an act of “high treason and an oligarchic conflict of interest.” They also requested to meet Olivier Marchal, Bain’s Paris chairman.

Marchal, who said he was working from home that day, said he was not surprised by the visit, given the current climate. “It is frustrating when you are doing what you consider a positive act, especially when it is on a pro bono basis, to receive what you deem negative spillovers,” said Marchal. 

He added that, aside from occasional pro bono work, Bain does not work for the public sector in France. 

Revolving door

Sensitivities around the civil service partly explains why the government has not put up much of a defense of using consultancies in the public sector. After news broke of McKinsey’s vaccination work, French government spokesman Gabriel Attal justified the firm’s participation as a way to react quickly in a time of crisis.

He did not address the fact that the use of consultancies has become routine — or that the lines between private-sector consultants and traditional civil servants are becoming increasingly blurred.

“In these consulting firms and in the different layers of power in government, there are people who have found themselves on the same benches of the most prestigious schools, and who evolve from the private to the public sphere and vice versa,” said Louwagie. “And at one point, one can wonder about the situation of the bonds of interest that exist between all these people, and that is not very healthy for establishing trust between the French and the state.”

Over the past few years, consulting firms have hired several former top-level public servants. Dominique Bussereau, a former secretary of state for transport under Sarkozy, is a senior adviser to Roland Berger. Nathalie Kosciusko-Morizet, a former environment minister, now leads the consulting activity of Capgemini’s cloud and cybersecurity division in North America. Pierre de Villiers, a former chief of staff of the armed forces, joined BCG then later left the firm amid rumors that he is eying a run for the presidency. 

McKinsey too has hired several former énarques as senior advisers and senior experts, such as Jean-François Cirelli, now an executive at investment firm BlackRock. And in the other direction, France’s public transformation department DITP has hired dozens of consultants to work on public innovation.

This revolving door has not escaped criticism.

“We’re in a situation where we now have people who come from Accenture and other consultancies who become public servants, which raises questions since they sign contracts with these same firms afterwards,” a finance ministry official said on the condition of anonymity.

Claude Revel said more frequent exchanges between the public and private sector has undermined France’s public administration.

“There is a loss of ethics and morals related to public service,” she said. “There are normally conditions for returning into the administration, which have not always been applied since it’s now considered old-fashioned.”

The High Authority on Transparency, an independent body overseeing the integrity and transparency of national public institutions, declined to comment on what scrutiny public servants face for their contacts with consulting firms. 

Health ministry ‘dismembered’

The presence of McKinsey in the country’s vaccine effort has outraged Macron’s opposition, who point to its role in the opioid crisis in the U.S. — for which the firm paid a $573 million settlement to resolve claims it faced across the U.S. — and several corruption scandals. Despite being headquartered on the Champs-Elysées, the official address of McKinsey’s Paris office is registered in Delaware, where the firm pays $175 in taxes annually, Le Monde reported. 

France’s public health system is widely seen as one of the world’s best-performing — but some have pointed to the reliance on consultancies as a symptom of its decline.

For nearly 20 years, jobs and funding cuts have undermined the public health administration’s ability to fulfill its mission, said Pierre-René Lemas, Hollande’s former chief of staff. The ministry is now composed of multiple directorates and sub-directorates — which the French elegantly call a bureaucratic mille-feuille (from the name of a multilayer cake). 

The result “has had the effect of breaking down in part what made the originality or the influence of the French administration: Its ability to synthesis, to analyze in the medium and long term,” Lemas said. This in turn led to the “dismemberment of the Ministry of Health,” he added. 

In theory, “the state could manage a COVID vaccine rollout from start to finish without having to resort to consulting firms, but it’d have to shake down the borders of its administrations,” said a former public-sector consultant.

Conservative MP Eric Woerth, a budget minister under Sarkozy, said: “We can’t say that the French state is short of brains and there are enough people to organize the distribution of vaccines almost correctly.”

Others have criticized the opacity of the relationship between consultancies and the government, as accountability efforts clash with a corporate culture of confidentiality.

“There’s a sort of taboo surrounding public tenders and taxpayers’ money,” said the official from the finance ministry, speaking on the condition of anonymity, who pointed out that public procurement data was not always published on schedule. 

“We do no not know what is the framework in which consultancies operate, for which amounts, nor who measures their contribution to the state in general,” said François-Michel Lambert, a former member of Macron’s La République En Marche and current president of green party Liberty, Ecology and Fraternity.

Giovanna Coi contributed research and data analysis for this story.