MPs issue warning over government consultancy spending
As a new report raises concern over consultancy spending, PCS has called on the government to end its over reliance on costly private consultants and to bring work back in-house.
A report by MPs on the Public Accounts Committee (PAC) has revealed some damning findings on the government’s consultancy spending and cast doubt on whether its commitment to halve consultancy spending in future years, saving the taxpayer over £1.2bn by 2026, can be realised.
The report points out that the Cabinet Office and HM Treasury do not have accurate data on what government spends on consultants which means the Cabinet Office is not able to set meaningful targets to reduce its reliance on them.
The committee reports that government bodies may be under or over reporting their consultancy spend. The data on how much departments spend on external consultants is inconsistent – the latest estimate by HM Treasury was c.£1.36bn in 2022-23, but other sources put the figure at as much as £2.23bn.
In May 2021, the government established the government consulting hub (GCH) to improve its use of consultants and provide an in-house alternative. However, the GCH was closed in January 2023 as part of efforts to reduce the civil service headcount. The GCH published the Consultancy Playbook which offers departments guidance on how to procure, manage and learn from consultants. The PAC report raises concerns that this Playbook has not been updated since the GCH was abolished and that the guidance is now out of date.
Responding to the report, PCS general secretary Fran Heathcote said:
"The Public Accounts Committee’s findings reveal a shocking lack of oversight of billions of pounds of public money. Government departments are ignoring rules on consultancy spending, and no one is monitoring it.
"At the same time, civil service jobs are being cut while departments continue to spend huge sums on private consultants and contractors. That simply makes no sense.
"If the government is serious about cutting consultancy spending, the answer is clear: invest in civil servants, bring this work back in-house and end the over reliance on profit-driven companies."
The committee’s deputy chair, Clive Betts MP, raised the concern that the government does not have a grip on precisely what is being spent on consultants.
He said: "At time of writing our report, we await the government’s strategic workforce plan, which will help departments more intelligently approach their use. With such a plan, government can understand what resources are available to it inhouse, rather than instinctively pulling the expensive consultancy lever for any difficult project and spending unnecessary billions in public funds in the process.”