The Government has been accused of “losing its grip” on Civil Service consultancy spending – which could be costing taxpayers more than £2billion a year.
A parliamentary report has warned ministers do not even know how much Whitehall is spending on outside advisers, raising serious questions about whether the Government can deliver its promised public sector cuts.
The Public Accounts Committee (PAC) concluded that the Cabinet Office does not have a grip on spending on consultants and “seems unconcerned” about inaccuracies in its own data.
The report states: “Given these problems, and its seemingly indifferent position on the matter, it is clear that the Cabinet Office does not have a grip on what the government spends on consultants.”
Despite the Government aiming to slash spending on consultants, the PAC found the Cabinet Office does not have a clear picture of consultancy spending – meaning it cannot confidently track how often consultants are used, where they are used, why they are used or how much they cost.
The committee also warned that unreliable data means ministers are unable to set “meaningful targets” to reduce the government’s reliance on external consultants.
The report points to major problems with the Government’s data, with departments collecting and reporting consultancy spending in different ways.
As a result, multiple systems produce conflicting figures for the total cost of consultants across the Government.
The Government has been accused of ‘losing its grip’ on Civil Service consultancy spending
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GETTY
For example, the Treasury’s estimate for consultancy spending was £1.36billion in 2022–23.
However, other sources suggest the bill could be far higher, with figures from the National Audit Office reaching £2.23billion.
A key issue identified in the report is that departments are responsible for creating their own systems for tracking consultancy spending, which has resulted in inconsistent approaches across government.
Sir Keir Starmer’s Government pledged in 2024 to save £1.2billion of taxpayer money by 2026 by cutting consultancy costs after spending surged during Brexit and Covid.
Keir Starmer’s Government pledged in 2024 to save £1.2billion of taxpayer money by 2026 by cutting consultancy costs
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GETTYCivil servants were told that major consultancy contracts must be approved by a department’s most senior official or the relevant cabinet minister in an attempt to tighten oversight.
However, the Government has struggled to show that these measures are delivering significant savings.
Analysis of departmental accounts by the Financial Times found consultancy spending across core departments and their arm’s-length bodies fell by only 14 per cent in the year to March 2025.
The PAC report also highlights serious weaknesses in how Government departments record and monitor consultancy spending.
Departments self-classify spending categories, which often leads to inconsistent reporting of consultancy costs.
Another complication is that many Government contracts bundle consultancy together with other professional services.
This makes it difficult to isolate the true cost of consultancy work and raises concerns that departments could shift spending into other categories rather than genuinely reducing their reliance on consultants.
The committee warned that a lack of “rigour” in reporting consultancy spending could allow departments to “under-report rather than reduce spending”.
And now, John O’Connell, the chief executive of the TaxPayers’ Alliance, has described the findings as “shocking” and said the report shows that “Whitehall doesn’t have a grip” on the spending.
He said: “This report exposes a shocking lack of control over billions in consultancy spending.
“When ministers cannot say whether the bill is £1.3billion or £2.2billion, it’s clear Whitehall doesn’t have a grip on the numbers or any care for taxpayers.
“Government must get a handle on this spending and stop relying on costly consultants instead of building in-house expertise.”
The report also raises concerns about weak spending controls on consultants.
The Cabinet Office currently relies on departments to establish their own internal controls, which has resulted in teams across government taking “varying approaches.”
Central spending controls on consultancy were removed in 2023, and the PAC found that since then “departments have demonstrated varying levels of control.”
The committee also found that Cabinet Office guidance on consultancy procurement and usage was not consistently being followed.
Whether departments were complying with these rules was not being actively monitored, the report said, with the PAC urging the government to identify which departments had failed to follow the guidance.
A Government spokesman said: “This Government is relentlessly rooting out waste to protect taxpayer money and make the state more efficient.
“We have already met our target to reduce consultancy spending by more than £550million in 2025, and are reducing back office costs by 16 per cent to save £2.2billion a year by 2030.”