UK Government Consulting Spend Hits Record £3.7 Billion in 2024/25

UK government consulting spends rose 6 % to £3.7 billion in 2024/25, hitting a record high. The Silicon Review reports on the Public Accounts Committee's warning that data inconsistencies make spending cuts difficult to achieve.

Government consulting spends across the UK rose by 6 percent to a record £3.7 billion in the 2024/25 financial year, according to research from data firm Tussell. The increase comes despite Labor’s election pledge to reduce spending on consultants by £3.73 billion over five years.

The government consulting sector has grown significantly over five years. Management consulting contracts for central government increased by 79 percent from £1.1 billion in 2019/20 to £1.9 billion in the latest figures. The defence sector saw the fastest growth, expanding 196 percent from £70 million to £207 million over the same period.

Local government consulting spend spiked 105 percent, while NHS spending on consultants grew 76 percent, though both sectors still have much lower total spend than central government .

The Public Accounts Committee has warned that the government may struggle to meet its target to cut consulting spending due to a lack of reliable data. HM Treasury estimates consultancy spends at approximately £1.36 billion, but other sources put the figure as high as £2.23 billion.

Departments often combine consultancy and professional services in large contracts, making it difficult to isolate spending on consulting alone. The Cabinet Office relies on departments to develop their own internal controls, and approaches vary significantly.

The committee has called for a list of departments not complying with Cabinet Office directives on consultancy procurement and a detailed breakdown of spending by individual contractors and service type.

Despite the government's ambition to halve consultancy spending and save over £1.2 billion by 2026, consulting actually accounts for only 2 percent of overall procurement spending, well behind construction and healthcare, which each account for 18 percent .

The Silicon Review's analysis indicates that the government's consulting bill has become deeply embedded in how departments operate, making meaningful cuts difficult without rebuilding internal civil service capabilities that were depleted during a decade of austerity.

Q: How much did the UK government spend on consulting in 2024/25?
A: The UK government spent a record £3.7 billion on consulting in the 2024/25 financial year, a 6 percent increase from the previous year according to Tussell research.

Q: Which government sectors saw the biggest increase in consulting spend?
A: The defence sector saw the fastest growth at 196 percent, followed by local government at 105 percent. Central government management consulting contracts grew 79 percent over five years.

Q: Why is the UK government struggling to cut consulting spending?
A: The Public Accounts Committee found that data on consulting spend is inconsistent, with HM Treasury estimating £1.36 billion while other sources suggest up to £2.23 billion. Departments also combine consultancy with other services in contracts, making spending difficult to isolate.

Q: What is the government's target for reducing consulting spends?
A: The government has pledged to halve consultancy spending and save over £1.2 billion by 2026. Labour also promised to reduce consulting spends by £3.73 billion over five years.

Q: What percentage of government procurement spends goes to consultants?
A: Consulting accounts for only 2 percent of overall government procurement spend, compared to 18 percent for construction and 18 percent for healthcare.

Q: What has the Public Accounts Committee recommended?
A: The PAC has called for a list of departments not complying with Cabinet Office directives on consultancy procurement and a detailed breakdown of what each department spends on individual private contractors, categorised by service type.