O

f 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

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.

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.

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.

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

2009 AT A GLANCE

2009 AT A GLANCE