Last year, the annual fee income study by our sister title Management Consultancy showed greatly improved growth, following the stagnant 2003 financial year when there was hardly any improvements worth speaking of.

The indications back then were that the market would continue to pick up and many firms reckoned that the 2005 financial year would witness full recovery, with fee income growth rates well into double digits.

It did not happen. Total fee income for the top 75 consulting firms grew by £455m for the 2005 financial year, or 9.6%. Not only is this a much lower rate of growth than the previous year, it is also a case of a much lower fee income increase.

The 2003/04 gain was 13.9%, which included an extra £574m in total fee income. It is a big disappointment, especially as many firms were projecting the sort of growth that would generate a total fee income improvement in excess of £700m.

Something that came across time and again when we spoke to firms this year was that not only has consultancy become harder to sell, but the emphasis has also started to turn towards non-advisory revenue streams. Implementation and outsourcing have become much more important because they provide what some call annuity work – the firm works for the client for very much longer. Outsourcing revenues also seem to be growing faster than consultancy revenues.

It is always difficult to obtain fee income figures that relate solely to consultancy, which we define as business advice. What we always try to avoid for our survey is having a mismatch of figures that might include anything from tax advice to software to computer hardware.

This is one reason why we use estimates in our tables. Not all the larger firms have the sort of reporting mechanisms that enable them to arrive easily at an exact figure for each of their different activities.

Accenture, for example, had a total revenue figure for 2005 of £1.4bn, but not all of that came from consultancy work, and we estimate the firm earned £835m. The balance was made up from other revenue streams.

We have also estimated income where final figures are not yet available. Public companies, for example, might have a 2005 financial year end of 5 April 2006, but their figures might only be available towards the end of May or early June.

And in some cases, firms make no accounting distinction between consultancy and implementation or outsourcing. Their projects might embrace all these activities. Our challenge each year is to arrive at realistic consultancy fee income figures that are consistent with previous years.

Looking at growth, it is no surprise that Accenture again tops the list, with an estimated fee income gain of £82m, or nearly 11%. IBM Business Consulting Services comes second with an estimated £50m gain, up nearly 9%. In third place is Deloitte with an estimated gain of £36m, or 11.4% up.

Considering the relatively low overall fee income growth rate of the top firms, the burning question is whether the industry is in for a period of slow rather than rapid growth?

It does seem unlikely that there will be a return to the days of 20% annual overall growth, and with low economic and GDP forecasts it is possible that future growth may be on a more modest scale.

Consultancy may also now constitute a mature market, so future growth will have to come from other non-advisory services provided by the consulting firms.

For the full report go to managementconsultancy.co.uk