Consulting Spend in the Public Sector

TL;DR: The UK government spends between £1.36 billion and £2.23 billion annually on consultants — the range itself reflects the problem. The National Audit Office reported in November 2025 that the government "does not have consistent data on how much individual departments are spending on external consultants." The Public Accounts Committee concluded in March 2026 that the government is "currently unable to deliver on its strategic objective to reduce spending on consultants." The US federal government is the single largest buyer of consulting services in the world.

By Ulrik Soeraas, Managing Director and Co-founder of Scopecreeper

How much does the UK government spend on consultants?

Nobody knows the exact number. That's the point.

HM Treasury estimated central government consulting spend at approximately £1.36 billion in 2022-23. But the Public Accounts Committee found other sources put the figure as high as £2.23 billion — a 64% discrepancy.

The gap exists because departments define "consultancy" differently, classify similar services under different categories, and report spend through different systems. The same engagement might be recorded as "consultancy" by one department and "professional services" by another. Some departments combine consultancy and professional services in large contracts, making it impossible to isolate the consulting component.

This is the classification problem at a national scale. And it's precisely the same problem that large private-sector organisations face.

What did the NAO find?

The National Audit Office published a major report in November 2025 examining the government's use of external consultants. The findings were stark.

The government does not collect data on how it uses consultants — only what it spends. There is no consistent methodology for measuring spending across departments. The previous government withdrew centrally directed spending controls in 2023, leaving each department to develop its own internal controls. An NAO survey found this led to significant discrepancies in how stringently controls were applied.

The report also found that 86% of government officials surveyed said consultants provided a valuable contribution. The issue isn't that consulting is inherently wasteful — it's that the government can't measure what it's buying, track whether it's delivering, or compare value across departments.

The NAO developed a set of lessons for improving value from consultants: better workforce planning, better scrutiny and oversight, supplier engagement for competitive bids, clear roles and responsibilities, and knowledge transfer agreements. Every one of these lessons applies equally to private-sector consulting management.

What is the government doing about it?

In July 2024, the government set targets for savings on consulting spend: an immediate stop to all non-essential spending and a halving of overall expenditure in 2025-26. The Autumn Statement committed to saving £1.2 billion by 2026.

A new centralised framework (MCF4) was launched through Crown Commercial Service in July 2025 to streamline procurement and create a single list of vetted suppliers. Ministerial approval is now required for any consultancy spend exceeding £600,000 or for contracts lasting longer than nine months.

But the Public Accounts Committee's March 2026 report cast doubt on whether these targets are achievable. The committee pointed out that departments often have large contracts combining consultancy and professional services, making it difficult to isolate consulting spend. This creates a risk that departments reclassify and under-report their consulting expenditure rather than actually reducing it.

The committee called for a government-wide workforce plan from the Cabinet Office by May 2026, including an assessment of skills gaps that require external resources.

How does UK consulting spend compare internationally?

The UK's consulting market is worth over £20 billion annually, making it the second-largest market in Europe. Public sector contracts drive between one-fifth and one-quarter of UK consulting revenues.

The US federal government is the single largest buyer of consulting services globally. Federal consulting spend runs into the tens of billions, spread across defence, healthcare (CMS, VA), technology (GSA, DoD), and regulatory agencies. The data challenges are similar: spend is distributed across agencies with inconsistent classification and reporting.

In Europe, France, Germany, and the Netherlands are significant public-sector consulting buyers. The EU itself commissions substantial consulting work. Several EU member states have been developing internal consulting capabilities to reduce external dependency — a trend also visible in the UK's approach.

Why is government consulting spend so hard to control?

The government faces every challenge that large private-sector organisations face, compounded by additional complexity.

Scale. UK central government has approximately 510,000 civil servants. Contingent workers (including consultants) could number 150,000–255,000 based on the 30–50% benchmarks from Deloitte/MIT Sloan research. At that scale, tracking individual engagements manually is impossible.

Departmental autonomy. Each department manages its own consulting budget and procurement. The Cabinet Office sets policy, but implementation is decentralised. This creates the same problem as in large corporations: multiple buying centres, no single view, inconsistent standards.

Classification ambiguity. The boundary between "consultancy," "professional services," "outsourced services," and "contractor costs" is genuinely unclear. When a Big Four firm provides a team that includes strategic advisors, technical implementers, and project managers, is that consultancy or professional services? Different departments answer differently.

Political sensitivity. Government consulting spend attracts media and parliamentary scrutiny in a way that private-sector spend doesn't. This creates an incentive to minimise reported figures rather than accurately measure them. Departments may reclassify consulting spend under other categories to avoid attention — which makes the measurement problem worse.

What can private-sector organisations learn from the government's experience?

The government's struggle illustrates that consulting spend management is a structural problem, not a willpower problem. The most powerful government in the country, with parliamentary oversight, a national audit office, and explicit political commitment to reducing consulting spend, still cannot produce a reliable number for what it's spending.

The lesson: you cannot control what you cannot measure. This is the core argument for consulting spend management as a category. And you cannot measure consulting spend by asking departments to report it, because they define and classify it differently.

The solution — in government and in the private sector — is to work from the source data. Invoices don't lie about what was paid. Contracts don't lie about what was agreed. By starting from transactional data and classifying upward (rather than relying on department-reported categories), you get an accurate, consistent picture.

Scopecreeper takes this approach. The discovery engine analyses invoices and contracts across all systems, budgets, and labels. It doesn't rely on department-reported categories. It builds the picture from the bottom up — the same approach that would solve the government's measurement problem.

The government can't track its consulting spend. Can you? Scopecreeper discovers every engagement from your invoice data. Find out what you're really spending →