In 2011 the 'tap turned off' on the COI amid continuing hardship for public sector-exposed PR agencies.
It is little surprise, then, that PRWeek's latest Top 25 Public Sector Consultancies list paints a bleak picture of a once vibrant sector.
Many of the big hitters, including market leader Grayling, suffered dips in fee income compared with 2010.
Ever dwindling budgets were more fiercely fought over by a larger number of agencies. As Freshwater CEO Steve Howell comments: 'It was more competitive, with more agencies hungry for work in a climate that continued to be tough.'
A key development was the announcement of the closure of the COI by the Government last summer, to be replaced by something leaner and more responsive.
The impact was immediate. Briefs through the procurement system slowed to a trickle with 'the tap turning off' shortly afterwards, in the words of Grayling's public sector head James Ford.
This drying up of comms work was recently confirmed when the Government announced that last year it had cut £387m from marketing and comms spending as part of an overall £5.5bn reduction in spend across Whitehall.
But that is not to say big briefs died out completely. In December, Freud Communications swept in to grab a £1m a year integrated brief with the Department of Health.
This increase in integrated work was reflected more widely, as was a trend that is developing in 2012 - increased stakeholder engagement and work with private partners. It is these green shoots that are providing comfort to the sector.
Jonathan Goode, head of comms at VU-tbg, says: 'With reductions in central government funding, organisations need to put more effort into communicating with partners and potential partners, as they explore alternative funding streams.'
This is especially true of the NHS, which after offering little in the way of work for agencies in 2011 is expected to be more fruitful ahead of major changes in early 2013.
Among noteworthy news in the sector was Dick Fedorcio's resignation as Metropolitan Police head of comms following its decision to initiate disciplinary proceedings against him. He was replaced this summer by Channel 4 News' deputy editor Martin Fewell.
Meanwhile, comms teams across local councils continued to feel the squeeze.
And of the post-COI procurement system?
With government comms architect Jenny Grey set to head for Citibank this autumn, as one senior agency head says: 'It will have to be a case of wait and see.'
- - Although Grayling still leads the table by some distance, it took an eight per cent hit on public sector fee income.
- - Munro & Forster suffered the biggest drop in public sector income, of 79 per cent.
- - Four Communications recorded the largest growth of those also included last year, with public sector income up 49 per cent.
- - Bottom of the table is Bray Leino, with £44,000 - only a third of the income figure required to make it on to the list last year.
- - With a public sector income of more than £1m, Portland is the highest new entry, securing third place on the table.
- - Fifteen agencies are now on the table with a public sector income of under £500,000, compared with 11 last year.
Public sector MD: James Ford
Public sector fee income: £2.85m
The most significant development for Grayling's public sector offering over the past year was the launch of Grayling Engage, a specialist service for public consultations and engagement.
Both Engage and the public sector department are headed up by James Ford. He says the launch of the service was in response to greater demand in this area, for example, from health services amid the backdrop of dramatic NHS reforms set to kick in early next year.
'Those organisations that need to undergo some degree of service change need to talk to the public about it, and that's where we're using our comms expertise. I think the desire from public bodies to communicate effectively with the people they're serving has only increased,' he says.
With briefs coming out of the COI starting to decline from late 2010 onwards, Grayling had responded by diversifying, with the growth of private sector involvement in the public sector providing ample opportunities.
One such opportunity was work with Lloydspharmacy to support people's overall healthcare within the community.
Ford says digital work being included in a brief has become the norm over the past year, with questions asked if it was not part of a strategy.
Regarding the future, he sees further opportunities for those who know the NHS well, and growing opportunities around consultation work: 'I think as we go forward we will see more and more discussion initiated by the public sector with the public about what's possible for the sector to commission or provide,' he says.
'There's a genuine appetite to engage the public in those discussions, and they will help shape the future of public services.'
2011 AT A GLANCE
High points - Running comms for the largest public consultation in the history of the NHS on children's heart services and driving footfall for Lloydspharmacy with the Spring Clean Your Meds campaign.
Low points - Funding drying up for an Engineering and Physical Sciences Research Council campaign to promote the benefits of science.
Key client wins - Anglia Cancer Network; Stockport NHS Foundation Trust; Northgate Public Services; Crime Reduction Initiatives.
Best hires - Associate director Kathryn Ager from Good Relations.
Strategy for 2012 - Keeping a strong focus on the team, and expanding Grayling Engage. We also want to enhance its specialist knowledge in health, travel and social affairs, and work for more public sector and commercial organisations providing public services.
FRESHWATER UK 6
MD: Steve Howell
Public sector fee income: £671k
Freshwater MD Steve Howell makes no bones about the difficulties the sector faced in 2011: 'Anecdotally the evidence is that less is being spent on comms, and in a period of government austerity measures, it is an area that has continued to be cut back.'
But that is not to say Freshwater has done badly. In fact, the agency has shown large growth when many of its competitors are struggling.
So what has been the key to its success?
Howell is keen to emphasise Freshwater has not been taking part in a financial race to the bottom.
'We've not done it particularly on price. We've done it by showing professionalism and creativity. Though the client is looking for value they want more than that too,' he says.
The different political situation in Wales, where Freshwater has a strong presence, is also a contributing factor. Howell suggests Labour-led austerity may not have such a sharp edge to it, with certain sectors partially protected from cuts.
He points to the agency's work in food and business initiatives in the country as an example of this, including the Welsh Government backed-annual True Taste Awards and Economic Growth Fund briefs.
Howell does not see much let-up when it comes to tight budgets across the public sector over the coming year.
However, he believes the health sector will provide new work possibilities due to the planned reforms within the NHS. This, he thinks, will lead to a pick-up in the sector following a quiet 2011.
'People were waiting to see the outcome of the reforms and now they have been agreed, there's a lot of communication to be done to ensure stakeholders understand the changes internally and externally,' he adds.
2011 AT A GLANCE
High points - Winning the 2011 CIPR Excellence Award for Best Integrated Campaign for our work to encourage people to become organ donors with Donate Wales, funded by the Welsh Government.
Low points - Continuing disappointment that our membership of 11 COI/UK government rosters yielded so few opportunities.
Key client wins - Great Ormond Street Hospital; University of Leeds; NHS Institute for Innovation and Improvement; Wales Economic Growth Fund; Scotland's Highlands & Islands; Design Commission for Wales.
Best hires - Recent graduate Rob Carvill as an interactive designer, head of conferences Carrie Swift from the Waterfront Conference Company and client manager Jay Turner.
Strategy for 2012 - Shaping our offer to varied public sector needs.
STRIPE COMMUNICATIONS 13
MD: Juliet Simpson
Public sector fee income: £425k
New entrants to the public sector league table Stripe Communications had a good 2011 while others struggled.
MD Juliet Simpson says the agency's rise could be partly attributed to its recent entry on to the Scottish Government roster bearing fruit. The Scottish Government placed more emphasis on PR in its marcoms set-up last year, Simpson explains.
She adds that in the past, PR was often an 'add-on', but in 2011 the agency was often being placed at the heart of the process.
Increasingly, and as part of this trend, staff at Stripe Communications were also being asked to work on more integrated briefs.
Among key projects was the Resilience campaign, which followed on from a particularly difficult Scottish winter in 2010 and was aimed at preparing people for any similar challenges the next year.
However, Simpson adds that without the right approach the agency would not have been able to take advantage of these opportunities.
'We joined the roster in 2009, and it had been about proving yourself, but 2011 was a year where we were able to build on that,' she comments.
'We're a consumer agency, and we wanted to use that to bring our audience and insight-driven approach to the public sector. We only spoke to media relevant to our targeted audience, and were very tailored in our approach,' she says.
This year, Simpson is hoping that a packed Scottish schedule in 2014 could bring big benefits.
Pointing to the arrival of the referendum on independence, the Commonwealth Games and Ryder Cup as examples, Simpson says: 'We could see tourism promotion opportunities amid buoyancy in the Scottish economy.'
2011 AT A GLANCE
High points - Continuing to grow revenue and margins despite a challenging climate and paying all our staff a profit-related bonus.
Low points - Running out of desk space. We're due to move later this year.
Key client wins - Scottish Government Resilience; Glasgow City Marketing Bureau - MOBOs; Glasgow's Christmas; City of Dundee; Quality Meat Scotland and the Thistle Foundation.
Best hires - We recruited Calum Friar, our fifth graduate in three years on our 'Stars & Stripes' trainee programme.
Strategy for 2012 - To achieve double-digit revenue growth while retaining our margins. To increase our proportion of UK clients, through solid strategic planning, creative ideas, no-nonsense delivery and robust evaluation.