Blanket consultancy cuts risk false economy warns expert

A UK challenger consultancy has urged the government to rethink plans to halve its annual consultancy spend, warning that indiscriminate budget cuts could increase long-term costs and derail critical transformation projects.

The intervention follows a National Audit Office (NAO) report highlighting weaknesses in how departments track and manage consultancy spending, alongside Chancellor Rachel Reeves’ commitment to cut the government’s £1.36 billion-plus annual consultancy bill by 50 percent.

Leading Resolutions argues that the core problem is not the use of consultants, but poor visibility of where spend delivers value. The NAO report points to a lack of consistent data across departments, making it difficult to distinguish between wasteful expenditure and specialist expertise needed for complex digital and infrastructure programmes.

Jon Bance, chief operating officer at Leading Resolutions, said the NAO findings expose a “data blindness” that undermines effective cost control. “You cannot manage what you cannot measure,” he said, adding that cutting spend without better insight risks creating a false economy.

The consultancy is calling for a “transformation-first” approach to procurement, with stronger governance and clearer links between consultancy spend and measurable outcomes. Bance warned that treating consultants as short-term labour to plug capability gaps, rather than as delivery partners accountable for results, drives inefficiency and poor value for money.

He also criticised long-term engagements with large incumbent firms that rely on “land and expand” tactics, arguing that vendor-agnostic, outcome-based partnerships are better suited to public sector transformation. Tying payment to delivery, he said, would help ensure that external support builds internal capability rather than embedding dependency.

As departments face growing pressure to modernise services and infrastructure with limited in-house capacity, Leading Resolutions argues that “buying better, not just spending less” will be key to achieving sustainable savings while delivering effective digital government reform.