New controls across government to curb consultancy spend and save over £1.2 billion by 2026
New controls on the use of consultancies across government are being brought in to cut unnecessary spending and save £1.2 billion by 2026, as set out in the Autumn Statement – with departments already expected to save the £550 million committed to this financial year.
- New controls are being brought in across government to address unnecessary consultancy spending by departments.
- Measures to reduce reliance on larger firms, and support SMEs to increase diversity, innovation, social value and flexibility within the market.
- Alongside the new controls, a new overarching framework agreement and enhanced terms and conditions and guidance will streamline the procurement process and ensure consultants are only used by public sector buyers when necessary.
New controls on the use of consultancies across government are being brought in to cut unnecessary spending and save £1.2 billion by 2026, as set out in the Autumn Statement – with departments already expected to save the £550 million committed to this financial year.
The new controls 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 which will 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 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.
CCS has developed the agreement in consultation with departments to ensure that it can best meet their needs. Some of these improvements include expanding the use of alternative fee arrangements, which are linked to supplier performance, to ensure value for money for customers and the taxpayer.