A Reality Check on Value for Money in UCP Post-Secondary Review.

We have a seriously anti-intellectual government in the UCP. The review they commissioned on post-secondary education is not inherently bad and could bring forth some very positive recommendations for updating a very stagnant post-secondary institutional culture.

What is concerning is the questionable intent of the review. Is it just another expensive political cover exercise using an expensive consulting firm to justify an ideological preconceived political stance?  McKinsey has been granted a very expensive consulting contract with some very specific processes and deliverables by the Alberta Department of Advanced Education.

Here is a very expert and thorough analysis, by Alex Usher of Higher Education Strategy Associates, entitled “How’s the Alberta PSE Re-Think Going (Part 1).”  It is a summary of the value for money from the McKinsey deal with our Alberta government comparing what the contract requires and what is now possible, to do and deliver, given COVID constraints.

He strongly suggests there is not good value for money and the contract needs amending due to COVID.  The UCP will lay off 11,000 educational staff who provide necessary supports for children, saying COVID and saving tax dollars as justification.  They should take the same attitude in revising the McKinsey contract, process, purpose, and price.  Will they?  Don’t hold your breath.

 

Here is the body of the Alex Usher analysis:

You may remember that in the Spring, the Government of Alberta signed a contract with McKinsey to conduct a big review of Post-Secondary Education in the province. I want to check in on how that’s going. Today, I’ll look at the process; tomorrow I’ll look at what conclusions the government (or McKinsey – it’s hard to tell) is coming to.
Ready? Then I’ll begin.
Based on the Request for Proposals the province released back at the start of this process in March (available here) and the documentation available from the project website (here), it seems as though this review was meant to include an enormous amount of research into various issues relating to higher education cost structures (which promised to be quite interesting given the dearth of hard evidence on the subject in Canada) as well as significant public consultation about these issues. The price-tag – $3.7 million – was certainly high, but if McKinsey conducted it well, there might still be value for money.
 To get a sense of how high that price tag is, I’m going to let you into some behind-the-scenes secrets about how costing for these kinds of projects works. Let’s break down the project costs task-by-task.
140 key informant interviews: Even if you have some high-cost people doing these – $250/hour, say, which is about twice what a non-Big-5 firm would charge, and you assume 3 hours per interview (which is interview time, with overhead time like instrument development, meeting arrangement, transcription, coding etc., this comes out to 420 x $250 = $105,000.
10-15 “Issue Papers”: A preliminary list of these is available on page 9 in the RFP (link above). It’s hard to work out the price of each in detail. But put it this way: I’ve been working in Canadian higher education for a long time, and I’ve not seen many of these kind of papers that any client wanted explored valued at more than about $100K. And that’s probably a bit high for some of these since all the data is either going to be from i) Statscan, ii) data held by the Alberta public service, or iii) desk research. But whatever: let’s set the price at $100k per paper, and say that at the outside, this whole thing was going to cost $1-1.5 million.
10 Expert Roundtables. So, these were supposed to involve “experts” and stakeholders, and as I understand it were meant to be a series of 2-hour Zoom sessions around a specific issue. It was never entirely clear, but I think there was an understanding that each of these would be “fed” by an “issues paper”. Given that these were remote, the costs were all in organization, moderation, and transcription. $20,000 each if I’m being really generous. So, $200,000 total.
6-8 “Townhalls”. It was never entirely clear how many of these there were to have been – 6 or so, probably. Nor was the format clear – though given that this was the only chance that students, faculty and staff were to be able to have a formal say in things, you’d have assumed something like half-day participatory sessions.  Now, in pre-COVID days, maybe if you hold something like this in a swanky hotel you could bring the cost of one of these up to $60,000 a pop (especially if you are flying in McKinsey folk and perhaps one or two entertaining talking heads to liven things up). It would be cheaper now to do it no, online, but let’s leave that original figure in for the hell of it and call it $420,000. Add a final “summit” and bring it up to $500k.
An online consultation: $30K. Tops. Unless you’re re-transcribing the results into NVivo by hand.
Report-Writing. If you’ve spent over a million on the issues papers, and half a million on roundtables, the actual writing of the final report shouldn’t take much time. $100K, max.
Project Co-ordination. This is important, given that you are working on a tight timeline which clearly needs to result in some very specific answers. Call it a 15% overhead, which would make it between $295-370k.
TOTAL COSTS: somewhere between $2.26 and $2.84 million. And like I say, that’s assuming some very healthy cost allowances. Yes, you are allowed to wonder what the other $1 million plus is being spent on.
But wait! It turns out in fact those “issue papers” are not going to be delivered. Instead, what we seem to have are a series of “issue Powerpoints”. I obtained two of them when I was kindly invited to participate in the roundtable on accessibility (couldn’t participate, unfortunately, but sent in a set of comments). They are not terrible, (though the stuff about ed tech is pretty weird and some of the international examples are hilariously inappropriate for Alberta), but they aren’t exactly $100K worth of work, either. A lot of it appears to be lifted from previous McKinsey projects (marginal cost: $0).  I think very generously, these might represent $30K of work apiece. Assuming they only did ten of these, that means the actual cost was $300K instead of $1 million to $1.5 million. Good business.
But wait again! This thing is supposed to be delivered in the month of December and as of last Friday there is no sign of any townhall. Which means, I think, that there has been some sort of change of plan, and the townhalls are no longer an “input” to a final report, but rather some sort of launch event, where the province “presents” the results to stakeholders. And of course, it’ll be online. That probably shaves about $475K in costs, and incidentally reduces the burden of consulting faculty, staff and students (I understand special roundtables have been held for at least some of these group’s leaders, but it seems there won’t be much opportunity for the average community member to give input except through a written survey, which available along with the accompanying “workbook” here).
Here’s my estimate of what the cost base of this project looks like:
Makes you wonder about how much the Alberta government cares about value for money, doesn’t it? Or maybe I just need to raise my rates.
Tomorrow: where the consultations seem to be heading.

 

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