New government controls to curb consultancy spend

New controls on the use of consultancies across government are being brought in to cut unnecessary spending, as set out in the Autumn Statement – with departments already expected to save the £550 million committed to this financial year.

They will provide far greater oversight, with ministerial signoff required for any consultancy spend over £600,000, or for contracts lasting more than nine months, while consultancy spend over £100,000, or that lasts more than three months, will now need to be signed off by the relevant permanent secretary.
 
When combined with commercial agreements that are focused on value for money, these controls will drive a reduction in consultancy spend in Whitehall.
 
Georgia Gould, parliamentary secretary at the Cabinet Office, said: “We’re taking immediate action to stop all non-essential government consultancy spend in 2024-25 and halve government spending on consultancy in future years, saving the taxpayer over £1.2 billion by 2026.
 
“It comes alongside our work to develop a strategic plan to make the Civil Service more efficient and effective, with bold measures to improve skills and harness digital technology.”

To support this, the government is also inviting companies to bid for a new framework agreement in a bid to streamline the way it uses consultants in the years to come.
 
By providing a single, centralised list of suppliers who have already been through a rigorous and competitive tendering process in order to gain a place on the agreement, it will cut down the time spent by departments on the procurement process, and ultimately ensure better value for money and more competitive prices.
 
In line with this government's commitment to cut consultancy spend, the framework's total value has been cut from £5.7 billion over four years as planned to £1.7 billion over two years.
 
The new agreement will be managed by the Crown Commercial Service (CCS), the UK’s biggest public procurement organisation and an executive agency of the Cabinet Office, which will play a coordinating role in consolidating the government’s consultancy spend as it delivers change for working people.

Sam Ulyatt, CEO of Crown Commercial Service said: “Consultancy services are sometimes needed to support the government to deliver for citizens, but taxpayers must get value for money. 
 
"This agreement will help to ensure a behavioural and cultural change of how consultancy is procured throughout the UK public sector.”
 
It will also provide SMEs with further opportunities to win public sector contracts which allow them to bid as part of consortiums, or as a subcontractor.