PUBLIC RELATIONS: Preparing for devolution - Devolution is forcing the political lobbyists and their clients to deal with a decentralised approach to decision-making

The number of votes cast in the UK in June’s European elections hit

an all-time low. Yet the political reality is that power is draining

away from Westminster toward Brussels in one direction, and toward

national assemblies in the other.

Apart from the new assemblies in Scotland, Wales and Northern Ireland,

regional development agencies are in the pipeline, and next year, London

will have its own mayor.

All of this means that devolution is transforming the face of UK

government.

’Clients are going to have to keep locked in with these other centres

and track what is happening,’ says Stephen Sherbourne, chairman of Bell

Pottinger Public Affairs. ’Power will be diffused and people will be hit

with things they are not expecting. That’s what happened with Brussels.

The new centres will have to find their raison d’etre and will start

pushing their noses into everything.’

Not surprisingly, one result of all these moves toward devolution has

been to shake up the political lobbying sector, as clients and their

representatives get to grips with the new and decentralised

decision-making structure.

Shandwick Public Affairs, for instance, reports that it has increased

the number of consultants it employs in the UK from ten to 22 since the

1997 general election. For the most part, it has achieved this through

the expansion of existing Shandwick regional offices, but in Wales,

where it was not previously represented, it has developed an affiliate

relationship with David Chapman Associates, now rebranded Shandwick

Cymru.

’Westminster will become less and less important because of the impact

of these new bodies on people’s lives,’ says Stephen Byfield, managing

director of Political Planning Services. ’All the lobbyists are

scurrying around to get a regional presence.’

He has every right to sound a little smug. PPS was set up in 1990 to

plug a market gap when Byfield and his business partner realised that no

one was specialising in lobbying local government. Many of its clients

are property developers facing difficult planning decisions.

Its London HQ is involved in Westminster lobbying, but the company

already has a regional network. What it aims to do is acquire another

lobbyist to strengthen its hand in Westminster and Brussels. It has been

talking to competitors for about a year, so far without clinching a

deal.

Acquisition strategy

Meanwhile, within the past month, a couple of other takeovers have gone

through. Citigate already had a strong position through the acquisition

of Westminster Communications and last year, Dewe Rogerson. The latter

was best known as a leading financial PR agency, but had long had a

stake in government affairs. Now Citigate has added PPU to its

portfolio.

Similarly, the publicly quoted Lopex group has just bought Political

Context, which fits neatly with Westminster Strategy, the political arm

of Lopex subsidiary Grayling.

’The deal strengthens our London operation by adding seven people, but

it also has an office in Cardiff,’ says Michael Burrell, managing

director of Westminster Strategy. ’We already own Strategy in Scotland,

and have an affiliate in Northern Ireland, so we can say we have

completed our devolution strategy for the new UK. Clients like the idea

that they can get coverage across the UK from one source.’

Consolidation here is following a pattern already seen in Brussels, and

reflects the importance of public affairs to an increasingly

sophisticated international client base, says Julia Harrison, chief

executive of Omnicom offshoot Government Policy Consultants (GPC). The

company has a 40-strong team in Brussels.

It has always believed that the role of its office there was much more

than a ’feeder’ for the UK. It also opened a Scottish office two years

ago, and reports a ’tremendous upturn in business interest with the

elections’.

The implications of devolution are not lost on Scottish agencies

either.

’The establishment of the Scottish Parliament ensures that business will

remain buoyant over the coming year,’ says Gordon Beattie, founder of

Beattie Media, one of Scotland’s fastest-growing PR agencies. ’Early

indications are that 1999 will be even more successful for us than

1998.’

David Southern, a director of the much smaller Edinburgh-based firm

Carnegie PR, says the agency finds itself talking to more and more

independent agencies outside Scotland. ’One of the prime reasons for

this,’ he adds, ’is the advent of the new Scottish Parliament. We expect

more entrants in the marketplace because of this development.’

The image of the political lobbyists became tarnished in the latter days

of the Conservative government, but that hasn’t stopped the sector

bounding back under New Labour. Indeed, it’s believed that clients

reined in their spending two or three years ago because a change of

government was anticipated, rather than because of allegations of

improper behaviour.

’What’s good for lobbying companies is governments that are doing

things, and the last government was drifting,’ says Burrell, at

Westminster Strategy.

’It’s not the complexion that’s important, but whether the government is

doing things that affect business - which this government certainly

is.’

’This government is committed to openness and consultation. It has a big

programme, which is very positive for our sector,’ adds Byfield, at PPS.

David Bennett, a director of the sector’s trade body, the Association of

Professional Political Consultants, agrees that the lobbyists are

enjoying a period of growth, although he also says that profit margins

are under pressure for a number of reasons.

New players

Competition is intense in one of the basic services offered by

lobbyists, which is monitoring and analysing the outpourings of

government. Despite the consolidation that’s going on, there are also

new players in the marketplace.

Some legal, accountancy and management consultancy firms see no reason

why lobbying should be a public relations monopoly.

It’s true that other professions are trying to break in, agrees Burrell,

’but it never quite seems to come off, which is in contrast to what

happens in Washington and Brussels. Here the culture is rather that

lawyers will advise people on the law, rather than get involved in

trying to change it’.

As Bell Pottinger’s Sherbourne explains, the UK tradition relies more on

using people who have come up through the political system, and have

been activists or full-time staff within the main political parties.

Shandwick Cymru’s team, for example, includes Ian Courtney, chairman of

the Labour finance and industry group in Wales, and Adam Price, former

director of policy for Plaid Cymru.

What is clear, however, is that clients increasingly want skills that go

beyond a nose for politics. Hence the presence of healthcare specialist

CPR Worldwide, and IT specialist Text 100, in the table of top

lobbyists.

This is confirmed by Nigel Clarke, a director of GJW Government

Relations, one of the largest independent lobbyists. ’There’s more

health work, more on financial services regulations, planning, and

transport-related issues,’ he says. ’Increasingly, clients expect

lobbyists to understand their industries even before they have been

briefed. Now you have to be a specialist not only in political affairs,

but in particular areas of business.’

TOP TEN LOBBYISTS

Rank   Agency                                        Income from

                                              political lobbying

                                                            1998

                                                        (pounds)

1      Government Policy Consultants                   6,402,000

2      Burson-Marsteller                               5,913,000

3      Shandwick International                         3,101,000

4      Citigate Dewe Rogerson                          2,388,000

5      Hill & Knowlton (UK)                            2,330,000

6      Westminster Strategy (Grayling Group)           2,185,000

7      Charles Barker/BSMG Worldwide                   1,925,000

8      GCI/APCO                                        1,856,000

9      Political Planning Services                     1,678,000

10     The Communications Group                        1,026,000

* Two other leading specialists, GJW Government Relations and Bell

Pottinger Public Affairs, did not provide income details. Several of

the agencies in this table are also active in other areas of PR. The

figures shown represent their estimates of the income they derive from

the political arena.

Source: Marketing 1999 PR League Tables

This article was first published on Marketing