Across Whitehall, pressure on government departments to reduce costs has never been greater. With UK borrowing costs at their highest level in 28 years and the Chancellor under intense pressure to meet her Budget rules, every pound of public spending is under scrutiny. Labour’s target of £14 billion in efficiency savings by 2029 sets the ambition – but delivering it will depend on a crucial change. Can departments finally break free from the billions spent on external consultants year after year? Until that cycle of dependency is broken, costs will keep rising and the prospect of delivering genuine growth will keep falling short.
As public services grew more complex and the pace of technological change accelerated, departments across Whitehall turned to external contractors to fill the gap. In many cases it was the only realistic option – the capability simply was not there in-house. But what began as a pragmatic short-term fix has since become the established model.
Contractors come in and build the system – whether that is a benefits processing platform, a grants portal for businesses or the digital infrastructure millions depend on every day. But then they stay, charging a premium to manage and maintain services, all while holding onto the expertise to actually do the work. This is the traditional ‘land and expand’ playbook, and it has locked successive governments into an unhealthy dependency on a handful of major consultancies. Civil servants are handed a system, but rarely the know-how to run it, fix or improve it independently. So when something breaks, or needs to change, there is only one call to make.
To put the scale into perspective, the National Audit Office found public sector spending on consultants exceeded £1.3bn in 2022–23, yet the Public Accounts Committee recently suggested the true figure could be anywhere between £1.3bn and £2.2bn – and the reality, many suspect, is higher still.
At the lower estimate, that is enough to employ around 42,000 newly qualified NHS nurses or nearly 40,000 teachers for a year – yet instead it loops back to the same suppliers, year after year, with little to show for it inside government.
The Post Office Horizon scandal showed, in its most extreme form, what a loss of oversight can produce
Financial cost only represents part of the problem. When knowledge stays with suppliers, departments are left perpetually dependent – unable to interrogate the systems they nominally own, unable to push back when things go wrong and unable to adapt when circumstances change.
The Post Office Horizon scandal showed, in its most extreme form, what that loss of oversight can produce – an organisation so far removed from its own critical systems it could not see what was happening inside them or question what they were being told. Most cases do not end that way, but the underlying condition is the same.
Departments will always need specialist expertise, and there is nothing inherently wrong with buying it in. But there is a significant difference between bringing in expertise to solve a problem and structuring an entire delivery model around expertise that was never meant to stay. Right now, Whitehall largely does the latter – and it is costing taxpayers far more than the invoices suggest. Because every contract that fails to transfer knowledge leaves another department locked into consultancy dependency.
Genuine efficiency does not come from cutting budgets or renegotiating contracts – it comes from building the in-house capability to stop needing the same consultancies to deliver our critical digital services.
That means training civil servants to run and evolve their own services, transferring knowledge throughout delivery rather than gesturing at it during handover, and choosing partners whose measure of success is whether the department still needs them. It is a solution we call Zero Dependency – and it is deliberately different from the model it is designed to replace.
Government cannot deliver more for less on a model that hollows out the institutions responsible for delivery in favour of large consultancies, often headquartered overseas. Building sovereign British capability – knowledge that stays inside government without depending permanently on consultants to maintain it – is not just the fiscally responsible option. It is the only one.
Whitehall has the civil servants, the mandate and proof that a better model works. The cycle of dependency is costing taxpayers billions and holding back the growth the country needs.
It is time to break it.
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