In training & development, which is more effective in-house or consultant based training exercises?

Would depend, for instance if its a knowledge or skill building program for your front-line sales or service department them you would want to use your in-house trainers given their ability to customize and relates to the ground problems. Given these programs will be required to be trained time and again and also that attrition is higher attrition at the front line level, internal trainers model works.

However, even at this level a non-domain content and trainers boot camp should be through a training consultancy which brings in time-tested tools. This than can be taken ahead by internal trainers who will

Its a win-win situation given both, internally one builds capability and gets the best in terms of content and a tested modal.

However, for a specific subject where the firm does not have enough depth, or wants to bring a change or for that matter is looking for a neutral party to facilitate the change due to internal difference, a external training out-fit is a safer and better choice.

For instance, you are in banking and want to give an orientation of banking sector within in your country and across global market. Here, a choice of someone who can present a higher view and relate with your executives will help through their out sights.

Similarly, you work for a advertising firm and want people to think creatively or say, out of the box then perhaps Edward De Bono's program 'Six thinking hats' from a external facilitator will help. No doubt, you can ensure a lot of pointed discussions which are relevant from your firm or industry's point of view.

Similarly, a outbound program from a external vendor on trust and team building ensures that you don't digress or dilute the daily operations or your staff as these programs needs days of preparations in terms of logistics and co-ordinations given everything has to be supervised and is manual in nature. 

Consultant Based and In-house both as per me. Both are effective in their own way depending upon the business are you in.