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UK government abolishes in-house consulting as departments favor the Big Four

UK government abolishes in-house consulting as departments favor the Big Four

 


The UK government has abolished in-house consulting departments that were supposed to reduce taxpayer spending on private companies such as Deloitte and EY.

Launched just two years ago and backed by former Downing Street advisor Dominic Cummings, the unit was intended to provide strategic advice and train public sector staff.

However, the project, unofficially dubbed the Crown Consultancy, was canceled after insiders admitted that it had not worked and that the government department preferred to use outside consultants.

No official announcement has been made, but the government will close the hub on Tuesday, people familiar with the matter told the Financial Times.

Employee drinks are already planned to mark the closure, he added. The Cabinet Office said on its final day that 40 people working there will be assigned to different roles. A year ago, the hub had a team of 60 people with plans to grow.

Former Cabinet Secretary Jacob Rees-Mogg was an advocate for the unit, but his colleagues conceded it was a good idea that didn’t work.

One person said: The department did not use hubs because there was no scope for external consultants. However, the basic premise that outside consultants are overused remains valid, as is the idea that expertise must be in-house.

It was part of the Cabinet Office, and the Glasgow, Birmingham, and London-based Consulting Hub was a specialized department made up of civil servants to provide advice to departments across government.

We also developed a consulting playbook to guide civil servants to get value for money when hiring advisors.

The Hub had already lost the patronage of Minister Sir Theodore Agnew, who oversaw its launch, when he resigned in January 2022. Agnew said in 2020 that an unacceptable over-reliance on torture wastes taxpayers’ money and attracts officials.

Despite intentions to cut government spending on consultants, spending has skyrocketed in recent years as cuts to respond to Brexit and the coronavirus pandemic have hurt officials.

According to data provider Tussell, the UK public sector signed 2.8 billion consulting contracts in 2022. This figure is 75 per cent higher than the 1.6 billion contracts awarded in 2019, the final year before procurement surged as part of the UK’s COVID-19 response. In 2016, orders received were only KRW 700 million.

High spending has been a boon for the consulting firm. According to Tussell’s analysis, Deloitte signed contracts worth $278 million in 2022, down significantly from 2021, but still more than any other consulting firm.

Big Four rivals PwC and EY won $152 million and $101 million respectively, while KPMG won a $12 million contract that it voluntarily withdrew from bidding for a year after being involved in a series of scandals.

Because many projects span several years and Tussell data often includes contracts for projects such as IT upgrades that governments do not classify as consulting, actual expenditures are typically well below the value of the awarded contracts.

Consultants claim that hiring on a temporary basis through competitive bidding is more cost-effective than hiring a professional full-time at Whitehall.

The Cabinet Office said: The Government Consulting Hub was established to help the government build more internal capacity while continuing to deliver efficient public services.

As part of the next phase of work, training in the use of consultants is now integrated into the core curriculum, including the Consulting Playbook. It said the government would continue to ensure that consultants were used only when absolutely necessary.

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