Civil servants expect consulting spending to rise

UK civil servants expect government spending on consultants to keep rising, according to a new survey. Only 4% of responding senior Whitehall staff believe their departments will see consulting fees fall in the coming 24 months.

The UK’s £20 billion consulting market has seen growth slow in recent years – making it increasingly dependent on the public sector. Government sources are the second largest client base is the public sector – with contracts having driven between one-fifth and one-quarter of consultancies’ incomes in recent years.

So, when the Labour Party came to power in the summer of 2024, promising to curb state spending on private sector expertise by £3.73 billion over the new government’s five-year term, it arguably could not have come at a worse time. The Government outlined plans in November to save £1.2 billion of that initial figure by 2026.

But while many firms may have rushed to the panic stations at the news, a mixed first nine months at the helm suggest they may not have so much to fear from Keir Starmer’s administration. In spite of Labour’s public messaging on reining in the billions paid to the country’s largest consultancies, a 96% majority of senior civil servants say they believe their department will spend more on consulting.

Over the coming two years, 2% said they did not expect a change, while a meagre 2% also said they thought spending would fall. The survey, carried out by research firm Source, found that 88% of civil servants who make decisions on consulting contracts said they had received specific instructions to cut spending. This included negotiating cheaper contracts. However, short-staffing in Whitehall means many expect this will not help.

Following 15 years of austerity – and more seemingly on the horizon – civil service workers often have little choice but to rely on external support to complete their work. Reflecting this, 16% said their departments were under-staffed, while 30% said their departments lacked sufficient resources to get work done.

Fiona Czerniawska, the chief executive of Source, commented, “We’ve seen successive governments over the years seek to cut back spending on consultants. But if a government minister wants to get something done and doesn’t have the people, they’ll use outside contractors to do that.”

The figures might point to something more than a lack of hiring, too. While Whitehall’s numbers have risen in recent years, resources also include the training and upskilling necessary to complete a task – something which has taken a backseat amid an alleged over-dependence on consultants, that critics have suggested ‘infantilises’ the civil service.

Amid this, civil servants feel their advice counts for less and less. A 25% chunk of those polled told Source that ministers were more likely to listen to advice from consultants than their own internal staffers – suggesting a lack of trust in Whitehall’s expertise, which in turn was further fuelling a reliance on the private sector.