Whitehall swells its army of consultants (again)

The government seems keen to conduct something of a war on Whitehall. Jacob Rees-Mogg, the minster for government efficiency, has even taken to leaving calling cards in empty offices in order to encourage civil servants to return to their workplaces. But hybrid working isn’t the only problem facing the civil service: a more costly issue, perhaps, is the spiralling bill to taxpayers of Sir Humphrey’s army of outside advisers brought in to aid Whitehall’s finest. 

For total government expenditure on external consultants increased by 70 per cent in the last five financial years, rising from £717 million in 2016/17 to £1.2 billion in 2020/21. This is despite a National Audit Office report in 2016 suggesting consultants typically cost government departments twice as much as an equivalent permanent staff member. Among the worst offenders was the Cabinet Office which saw a remarkable seven-fold increase in the amount spent on external consultants from just under £10.2 million to more than £79.7 million. By context the Department of Education’s expenditure dropped from £12.1 to £8.7 million.

Of 16 government departments for which figures are available, 10 saw their spend more than double on such advisers over the past five years. The Ministry of Housing and Local Government was rebranded as the Department for Levelling Up, Housing and Communities as part of Boris Johnson’s bid to retain his ‘Red Wall’ constituencies; consultancy spend here went from a mere £156,000 in 2016/17 to more than £20 million last year. HMRC went from £1.2 million to £8.6 million; the Home Office and the DWP trebled their expenditure from £13.3 million to £32.4 million and £9.7 million to £29 million, respectively.

The top-spending department was, unsurprisingly, the Department for Health and Social Care, rising from £389 million to £485 million while the Foreign Office spent the least, despite its relative spend soaring from £800,000 to £2.7 million. During the Coalition years, the Conservatives pressed for new controls on consultant spending in 2010, leading to a significant drop in expenditure from nearly £2 billion in 2009-2010 to between £400 million to £700 million until 2016. Yet, five years on, numbers are skyrocketing yet again.

As well as the question of cost, there’s also one of conflicts of interest too, with the Greensill scandal last year prompting questions about the close ties between consultants and the civil service. With Treasury minister Simon Clarke promising a cut in the civil service headcount by 70,000, will the same enthusiasm be shown for trimming the burgeoning spend on outside advisers? Steerpike looks forward to finding out.