UK (Parliament Politics Magazine) – Labour faces backlash as public sector consultancy costs hit £1.3bn, rising 5% despite a pledge to cut external adviser spending.
As reported by The Telegraph, Sir Keir Starmer is facing a U-turn accusation after new findings revealed a rise in consultant spending during Labour’s first year in office.
What did Reform UK’s ex-Chief say about Labour’s consultancy U-turn?
Nathaniel Fried, the former head of cost-cutting at Reform UK, has accused the Government of failing to uphold its pledge to reduce consultancy spending.
He pointed to data revealing that Labour received more than £100,000 worth of unpaid services from major consultancy firms ahead of last July’s general election.
Mr Fried said, “Labour has accepted hundreds of thousands of pounds in free labour from EY and PwC and is now U-turning on their promise to cut spending on said consultants by hundreds of millions.”
He added, “The ‘big four’ consultancies have infiltrated every level of our government. Reliance on them is hollowing out the Civil Service, reducing in-house expertise and creating external reliance.”
Mr Fried said, “It is no surprise as the Labour benches are full of former consultants who do not believe in the extremely capable Civil Service and would prefer to outsource everything and waste taxpayer money.”
What did Electoral Commission figures reveal about Labour’s consultancy ties?
Labour received unpaid consultancy support valued at £100,208 from PwC in the months leading up to the last general election.
Electoral Commission data shows that EY provided a further £45,015 in support during the first three quarters of 2024.
Tussell’s figures reveal that consultancy spending has continued to increase, even as the number of contracts awarded fell from 687 to 580 over the past year to June 2025.
What did Fiona Czerniawska say about cutting consultants?
Fiona Czerniawska, the chief executive of consultancy Source Global Research, stated, “The public sector depends on consultants.”
She added, “It’s very difficult to imagine at the moment that you could cut back the use of consultants significantly unless there’s a very equivalent significant investment in the skill set of the Civil Service.”
What did Tamzen Isaacson say about the role of private consultants?
Tamzen Isaacson, the chief executive of the Management Consultancies Association, said, “It is unrealistic to expect government to employ a vast pool of private sector experts and resources and far more cost-efficient to use them for short-term projects helping improve the efficiency and delivery of critical national services.”
What did the Cabinet Office say about cutting consultancy costs?
A Cabinet Office spokesman said, “We are rooting out wasteful spending and driving efficiency across government with over £550m saved from reducing spending on consultancy services in 2024/25.”
They added, “Alongside our previously announced target of saving £680m in 2025/26, we went further in the spending review and confirmed we would cut consultancy spend all the way through to 2029, saving £700m annually.”
A government spokesman clarified that Tussell’s data includes contracts across the wider public sector, while the government’s pledges focus strictly on Civil Service spending.
How did Labour spend £1.29bn on consultants in just one year?
Since Labour took office on July 5 last year, government departments and public bodies have awarded 580 consultancy contracts worth £1.29 billion to firms including Deloitte, McKinsey, and PwC.
According to Tussell, that’s a 5% increase compared to the £1.23 billion spent during the same period under the former government.
Despite Labour’s pledge to cut back on consultancy spending and save £1.2 billion by 2026, introducing tighter rules on Whitehall’s use of external advisers, the policy included new restrictions on departments hiring consultants.