Government spending on public sector management consultancy procurement increased to £3.7bn for 2024/25, according to data from Tussell. This rise occurred despite the Labour government's stated aim to reduce expenditure on external consultants.
The pledge to cut back on external consultants was initially announced by Rachel Reeves, then shadow chancellor, at the Labour Party Conference in October 2023. She stated that a Labour government would "slash government consultancy spending."
Following this, the government introduced plans for greater procurement control in November 2024, aiming to save £1.2bn by 2026. This framework included freezing non-essential consultancy hires and targeting a 50 per cent reduction in spending in subsequent years.
A government spokesperson told City AM that figures show a reduction in consultancy spending by over £600m in 2024/25, exceeding a £550m target and bringing spending to a five-year low. The government is committed to halving consultancy spending, with further targets expected to deliver over £700m in annual savings by 2028/29.
However, a National Audit Office (NAO) report from last November indicated that the government lacked a clear and consistent picture of its consultancy spending over time, suggesting data inconsistencies.