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Consultancy firms will lose £3 billion in government contracts
UK government consultancy spending faces major cuts as both main political parties have pledged to halve external consultancy costs, potentially saving £3 billion over five years.
This measure follows record spending since the last elections, driven by the response to the pandemic, digital projects and civil service training.
According to data group Tussell, the Big Four and four other consultancy firms – McKinsey, BCG, Bain and Accenture – have collectively received £7.1 billion in public sector contracts since December 2019.
Critics argue that this reliance on consulting firms wastes money and hinders internal skill development. While the Labor Party estimates savings of £3.73 billion over five years, the Cabinet Office predicts £3.04 billion. Conservatives also intend to cut spending and reduce the size of the public service, which Financial Times reports.
Despite the high contract values awarded to companies such as Deloitte (£1.9 billion), actual spending is generally lower. The consulting industry defends its role, claiming that it is more cost-effective to use external firms for short-term projects than to employ full-time experts.