Public Sector: Top 25 Public Sector Consultancies

Public sector agencies did well in 2009 but the tide is about to turn, reports Cathy Wallace.

Of all PRWeek's league tables, the public sector top 25 has the potential to change the most over the next 12 months.

The 2009 table is already an interesting read, with long-time top public sector consultancy Kindred seeing income decline by 14 per cent and a number of strong new entries.

Many agencies responded to the recession by diverting their focus away from the crisis-hit private sector and on to the seemingly well-cushioned public sector.

This led to new entries such as Paver Smith (see overleaf),which posted a public sector fee income in excess of £700,000 in 2009. Focusing on the public sector also meant consultancies such as Brahm (see overleaf) significantly increased public sector income. But the increased competition took its toll on some agencies that have traditionally excelled in the public sector, including Kindred, Camargue and London Communications Agency.

In general, however, agencies with public sector clients did well in 2009, with a greater number reporting growth than showing a decline in fee income, compared with 2008. There was strong growth for Lansons Communications, which saw public sector income increase by 64 per cent, and DTW.

In 2010, however, all bets are off. Nick Mustoe, MD of Kindred, says there has been little or no work coming out of the COI for months. Agencies are now turning their attention to other sectors as public sector budgets are decapitated by the coalition Government's axe.

That said, there will still be some spend in the public sector in 2010, and the agencies that thrive will be those that can work out where the new Government will invest, and prove their expertise in those key areas.

TOP 25 PUBLIC SECTOR CONSULTANCIES
Rank Company Public Sector fee income % chg
in Top 150 (pounds k)
09 08
1 29 Kindred 5,043 5,896 -14
2 13 Grayling Communications 3,779 3,621* 4
3 47 Consolidated PR 1,784 1,590 12
4 44 Camargue 1,700 1,925 -12
5 82 Communications Management 1,491 1,437 4
6 62 Munro & Forster Communications 1,388 1,446 -4
7 30 The Big Partnership 965 951 1
8 34 Luther Pendragon** 950 NE NA
9 129 The Bridge Group 871 1,100 -21
10 74 London Communications Agency 799 1,023 -22
11 127 ICE 774 721 7
12 80 Paver Smith 721 NE NA
13 22 Lansons Communications 654 399 64
14 67 Colman Getty 646 572 13
15 131 DTW 620 450 38
16 55 Smarts 501 NE NA
17 92 Brahm PR 476 368 29
18 144 Quantum Public Relations*** 470 378 24
19 83 Bray Leino 429 357 20
20 60 Octopus Communications 419 NE NA
21 18 The Red Consultancy 379 367 6
22 133 Admiral PR & Marketing 346 NE NA
23 35 Four Communications Group 307 NE NA
24 41 Freshwater UK 294 428 -31
25 125 Davies Tanner Marketing Services 275 NE NA


Rank Company Total PR % Total Staff Location
in Top 150 income 09 (pounds k) PR
income
1 29 Kindred 7,047 72 85 London
2 13 Grayling Communications 15,370 24 203 London
3 47 Consolidated PR 4,460 40 61 London
4 44 Camargue 4,882 35 57 London
5 82 Communications Management 2,221 67 27 Herts
6 62 Munro & Forster
Communications 3,334 42 40 London
7 30 The Big Partnership 6,890 14 93 Glasgow
8 34 Luther Pendragon** 6,000 15 59 London
9 129 The Bridge Group 931 94 17 Coventry
10 74 London Communications
Agency 2,664 30 20 London
11 127 ICE 952 81 44 Wirral
12 80 Paver Smith 2,327 31 37 Liverpool
13 22 Lansons Communications 8,651 7 74 London
14 67 Colman Getty 2,934 22 43 London
15 131 DTW 796 78 12 Cleveland
16 55 Smarts 3,778 13 54 London
17 92 Brahm PR 1,832 26 19 Leeds
18 144 Quantum Public
Relations*** 628 75 14 Kent
19 83 Bray Leino 2,143 20 29 Bristol
20 60 Octopus Communications 3,408 12 39 Windsor
21 18 The Red Consultancy 11,722 3 152 London
22 133 Admiral PR & Marketing 787 44 10 Newcastle
23 35 Four Communications Group 5,846 5 111 London
24 41 Freshwater UK 5,447 5 82 Cardiff
25 125 Davies Tanner
Marketing Services 1,063 26 20 Kent

NOTES
*combined fee income for Grayling & Trimedia
** incorporating Quintus Public Affairs
***formerly DTW Vavasour, 2008 figures shown from DTW Vavasour
NE = New Entry
NA = Not Applicable

14% drop in public sector fee income at Kindred compared with 2008

64% increase in public sector fee income at Lansons compared with 2008

38% increase in public sector fee income at DTW compared with 2008

31% drop in public sector fee income at Freshwater compared with 2008

KINDRED

Position: 1

Fees: £5,043k

Growth: -14%

Although Kindred remains number one in the public sector league table by a good margin, its public sector fee income in 2009 fell by 14 per cent. With the much-anticipated axe taken to public sector budgets, things do not look set to get better any time soon.

MD Nick Mustoe says the agency got as much work as could be expected from the public sector in 2009: 'Every time we discussed it with the COI we were told we were winning a healthy share of business.' Key wins for Kindred included the National Apprenticeship Service and a campaign for the Milk Marketing Forum, which was its first fully integrated brief. The COI also appointed Kindred to carry out an integrated campaign for the Welsh Assembly.

Significant hires for Kindred included Paul Armstrong, who joined as social media director from Waggener Edstrom, and Anton Ezer, who joined as a partner to creative director Ben Friend from Red Bee.

In light of the public sector spending cuts, Mustoe says Kindred is increasing its focus on other areas of the business, such as healthcare, and this year the agency was a new entry to the healthcare top 25. The agency is also picking up more third sector work, including work for Plan UK and the British Red Cross.

Mustoe says a key trend he noticed in 2009 was the end of the retainer. 'This is increasingly replaced by people buying on a project basis,' he says.

For Kindred, 2010 has been turbulent so far. MD Laura Oliphant left in January this year, and the agency is planning redundancies that could see staff cut by one-third (prweek.com/uk, 14 July). There is also talk of a management buy-out, prompted by potential cuts to be made by parent company Tribal, which Mustoe does not deny. But he says the agency must first ride out the public sector storm.

2009 AT A GLANCE

High points

- Winning the Chartered Management Institute and the Royal Pharmaceutical Society of GB, as both were integrated wins

Low points

- Losing two integrated pitches for which we felt we produced strong proposals

PAVER SMITH

Position: 12

Fees: £721k

Growth: NE

About 18 months ago, as the clouds of recession gathered on the horizon, Paver Smith's MD Dougal Paver made a decision. 'We decided to turn our new business gaze on to the public sector, because it was still able to invest in PR. We knew the private sector was going to be squeezed hard,' he said. The decision paid off. Public sector fee income grew from 12 per cent of the agency's business to 31 per cent and was a big contributor to the agency's overall 36 per cent growth last year.

Paver Smith won three six-figure public sector briefs. The first was with Liverpool City Council and Balfour Beattie, to handle PR for the now-scrapped Building Schools for the Future programme. The agency handled PR for local communities and parents affected by the rebuilding of schools in their areas.

Second was the Learning and Skills Council, to work on its Train to Gain programme across six boroughs, which encourages businesses to train their staff to improve business performance.

The final major piece of business also came from Liverpool City Council and Liverpool Vision, a regeneration body, to handle its presence at the high profile World Expo 2010 in Shanghai.

Paver did not make any major hires last year, because he believed his team was already experienced in the public sector, through lobbying for property clients and work with regeneration agencies.

This year, Paver has decided to shift the focus back to the private sector in anticipation of public sector budgets being cut dramatically. 'The Government says it will cut 20 per cent of non-essential expenditure - I think marketing budgets will see 50-60 per cent cuts, because it plays out well politically.'

He will still go for public sector business, but says he will be more selective about tenders.

2009 AT A GLANCE

High points

- Launching Liverpool's presence at the World Expo in Shanghai

Low points

- Contracts coming to their natural conclusions.

- Everton FC losing ten first-choice players by Christmas

BRAHM

Position: 17

Fees: £476k

Growth: 29%

Like many other agencies, Brahm turned its focus to public sector work in 2009 as a response to the recession. 'It is widely recognised that during times of economic hardship the public sector does bear some of the brunt and offers more opportunities,' says Tim Downs, head of PR at Brahm.

This approach saw Brahm pick up regional work with the National Apprenticeship Service for Yorkshire and Humber, a win Downs describes as 'significant'. It also secured work with the North East region of the Homes and Communities Agency.

Downs reports that 2009 was 'a year of short projects' and this view is reflected by other agencies working both in the public sector sphere and in other sectors. 'We had several smaller wins, for example some case study writing for the DWP,' says Downs. 'We also got on the roster for Lifelong Learning UK, which was a big roster last year.'

In terms of key campaigns, Downs cites work for the National Apprenticeship Scheme as a particular highlight. 'One event generated 11 new apprenticeships - small numbers but for a single event that is significant,' he says.

Looking ahead, Downs says the challenge is to work out where money will still be spent within the public sector: 'Spending does not stop completely and there are some key priorities for the new Government.' He adds that he expects to see investment in areas such as skills and housing.

Even putting the spending cuts aside, 2010 will be a year of change for the public sector. 'There is a great deal of uncertainty, not just in the agency world but in the government departments themselves. One key issue is that a lot of rosters and framework agreements are coming to an end, and the question is how are they going to be replaced,' says Downs.

2009 AT A GLANCE

High points

- Work for the National Apprenticeship Service, recruiting new apprentices and working with the wider national team

Low points

- The uncertainty of some clients about their future budgets and in some cases even their jobs.

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