Fears over comms budget cuts

Public sector-focused PR agencies are bracing themselves for huge reductions in fees as the political world considers drastic cuts in public spending.

David Cameron: planning cuts
David Cameron: planning cuts

The Conservative Party has suggested that if it wins the next general election, it plans to make cuts in all departments except health and international development.

On Monday Conservative leader David Cameron singled out quangos for cuts and even talked of slashing Ofcom's PR department.

Meanwhile, Gordon Brown has recently changed his tune on public spending, last week admitting Labour would have to cut certain government programmes and that Labour would face 'hard choices'.

This could spell the end for high-profile behaviour change activities handed out to agencies such as Kindred and Trimedia that make big money from government departments.

The Forster Company director Peter Gilheany said: 'What we are likely to see is the end of retained PR agencies. That is already happening. Very few of them are traditional two-or three-year campaigns any more. There is a greater emphasis on outcomes than outputs - that has been in the wind for some time.'

University of Westminster visiting professor of PR Trevor Morris agreed with Gilheany. He said: 'There will be a decline in public sector budgets within a few years. Quite often governments have used PR in lieu of hard policy.

'There have been lots of initiatives that turn out to be communications but not much else. Logically there are going to be big cuts in government budgets, so there is bound to be a cut in PR spend,' he added.

London Communications Agency director Jane Groom added: 'There have been noticeably more agencies chasing public sector work this year and with budgets being squeezed there is no doubt next year is going to be very tough in the sector.'

However, there is a contrasting view that government PR departments could make huge in-house staffing cuts, thus leading to an increased requirement for consultants to do the work.

Freelance speechwriter Simon Lancaster - who offers his services to the Government - said: 'It is, for instance, far cheaper for a firm that delivers six big keynote speeches a year to draw in an external speechwriter for those events than to employ an in-house speechwriter full time.' He added behaviour change campaigns can in some circumstances be the cheap option.

 

HOW I SEE IT

Pam Calvert, MD, Communications Management

At this stage it is difficult to predict how cuts are going to impact on spending. However, we see this as an opportunity rather than a threat.

Much of our public sector work is helping organisations diversify income sources, so I would expect an even greater demand for external advisers who have this kind of expertise. Equally, stakeholders have become accustomed to being consulted and change in services is likely to mean there is more, not less, of this work.

We are mapping a range of scenarios in the light of spending cuts and developing products we think will meet the needs of our clients.

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