Recommendations & Conclusions
23 items
2
Recommendation
71st Report - Government’s use of exter…
The Cabinet Office is unable to deliver on its strategic objective to reduce consultancy spend because departments are not complying with its definitions and directives. The Chief Commercial Officer stated that some departments are not following Government Commercial Function guidance or the good practice set out in the Consultancy Playbook …
Government response. The government agrees with the Committee’s recommendation. obligations. There is some anecdotal evidence of issues rather than systemic non-compliance. The Cabinet Office has commissioned the Government Internal Audit Agency (GIAA) to carry out a review of 15 organisations with significant …
HM Treasury
3
Conclusion
71st Report - Government’s use of exter…
The Cabinet Office is unable to demonstrate that the target to halve consultancy spend is an effective way to reduce spending on external providers. The Chancellor announced her intention to stop all non- essential spending on consultancy immediately and halve the government’s spend on consultants in 2025–26. Cabinet Office wrote …
Government response. The government agrees with the Committee’s recommendation their annual report and accounts. These have all been published for 2022-23, 2023-24, and 2024-25. The Cabinet Office has commissioned departments on their spending on professional services published for 2022-23, 2023-24, and 2024-25 …
HM Treasury
4
Recommendation
71st Report - Government’s use of exter…
The Cabinet Office has not provided departments with up-to-date guidance on how to procure, learn from and manage consultancy. The Government Commercial Function (GCF) is responsible for the Consultancy Playbook, as well as the related Sourcing Playbook. The Consultancy Playbook offers departments relevant guidance on how to procure, manage and …
Government response. The government agrees with the Committee’s recommendation. incorporate updated guidance about use of emerging technologies such as artificial intelligence. Following consultation with departments and industry, the department expects to publish the updated guidance by July 2026.
HM Treasury
5
Conclusion
71st Report - Government’s use of exter…
The soon to be released strategic workforce plan has the potential to be a welcome step to support better use of consultants. The Cabinet Office told us that all departments are complying with requests to update their strategic workforce plans, which will enable Cabinet Office to deliver the government wide …
Government response. The government agrees with the Committee’s recommendation. Workforce Plan (SWP) following the new Cabinet Secretary's priorities for reforming the Civil Service - that it is recognised for excellence in delivery, innovation and improved productivity. The SWP is being reworked alongside …
HM Treasury
1
Conclusion
71st Report - Government’s use of exter…
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Cabinet Office, from HM Treasury, and from the Department for Energy Security and Net Zero, about government departments’ use of external consultants.1
Government response. The government agrees with the Committee’s recommendation. suppliers across three categories: consultancy, contingent labour, and professional services. If a supplier is identified as a top ten supplier in any one of these categories, all other spending with that same supplier …
HM Treasury
6
Conclusion
71st Report - Government’s use of exter…
We questioned whether government has a breakdown of the amount spent on consultancy services in government with individual consultancy firms, separating audit fees from consultancy work. The Chief Commercial Officer explained they have the total annual spend, broken down by department.14 This is not currently broken down by type of …
HM Treasury
7
Conclusion
71st Report - Government’s use of exter…
We asked about the current processes for improving data quality and reducing labour intensive data checking processes. The Cabinet Office acknowledged that data processes are not yet as good as they need to be, but that it is investing in new technology through the shared services programme. When questioned further …
HM Treasury
8
Conclusion
71st Report - Government’s use of exter…
Inconsistent data prevent departments from understanding which consultants they use, or what skills gaps they repeatedly hire consultants to address. Departmental annual reports use different definitions of what constitutes consultancy spending, which may or may not be based on the Cabinet Office definition of consultancy. Departments also do not always …
HM Treasury
9
Conclusion
71st Report - Government’s use of exter…
We asked the Department why there is no uniform definition for consultancy used across government. The Chief Commercial Officer explained there is a standard definition for consultants across government, which is published in the Consultancy Playbook, and that the differences stem from inconsistent application across departments.18 Some of the confusion …
HM Treasury
10
Conclusion
71st Report - Government’s use of exter…
The Department said it plans to ensure compliance by departments with standard definitions through a combination of audit, data and technology improvements, and strengthening its mandate. The Cabinet Office has also established a working group and is seeking advice from the Government Internal Audit Agency to identify where Departments diverge …
HM Treasury
11
Conclusion
71st Report - Government’s use of exter…
The Chancellor’s July 2024 speech set targets to cut consultancy spending, including an immediate halt to non-essential services and halving future spend to save £550 million in 2024–25. These goals were reiterated in the 2024 Autumn Budget. Cabinet Office and HM Treasury are jointly monitoring departments’ progress against the savings …
HM Treasury
12
Conclusion
71st Report - Government’s use of exter…
The Cabinet Office told us that central spending controls over consultancy spending were withdrawn in 2023 to improve the pace of decision-making in government.27 It has since encouraged departments to develop their own internal controls.28 When asked how government ensures these controls are applied consistently across government, the Cabinet Office …
HM Treasury
13
Conclusion
71st Report - Government’s use of exter…
The Cabinet Office told us that government is checking and validating the data it receives from departments. This includes HM Treasury working with departments to ensure the data reflects actual consultancy spend.31 The Cabinet Office stated that the data indicates that it is on track to meet the spending reduction …
HM Treasury
14
Conclusion
71st Report - Government’s use of exter…
We asked what assurance the Cabinet Office and HM Treasury can give taxpayers that any savings will reflect actual reductions in spend, rather than shifting spend to other categories, such as contingent labour. The Cabinet Office explained that it is monitoring all categories of external 26 Letter from the Cabinet …
HM Treasury
15
Conclusion
71st Report - Government’s use of exter…
In May 2021, the government established the Government Consulting Hub (GCH) to improve its use of consultants and provide an in-house alternative. It employed around 70 to 100 staff and charged costs to departments using its services. The GCH published the Consultancy Playbook which offers departments relevant guidance on how …
HM Treasury
16
Conclusion
71st Report - Government’s use of exter…
The Cabinet Office told us that The Consultancy Playbook sets out lessons learned on getting the best value from consultancy, including knowledge transfer and sharing best practice across departments. This may particularly apply to innovative digital and technology projects where a department does not have the necessary skills internally to …
HM Treasury
17
Conclusion
71st Report - Government’s use of exter…
However, the Playbook was last updated in 2022 and contains many references to the Government Consulting Hub (GCH), including its Knowledge Exchange platform, despite this hub no longer existing. We asked why the Consultancy Playbook has not yet been reissued despite it being outdated. The Chief Commercial Officer explained that …
HM Treasury
18
Conclusion
71st Report - Government’s use of exter…
We also asked the Cabinet Office about the Government Consulting Hub and its usefulness before it was closed. The Cabinet Office said that the Hub was open just under two years and demonstrated that it was possible to provide expert advice to departments in a cost-effective way. However, it was …
HM Treasury
19
Conclusion
71st Report - Government’s use of exter…
The Cabinet Office stated that it incorporates and shares lessons from international best practice through both functions, for example by attending the Global Government Forum. We asked how government measures the effectiveness of disseminating this information. The Cabinet Office explained that it is often applied within functions and that guidance …
HM Treasury
20
Conclusion
71st Report - Government’s use of exter…
Workforce planning ensures that organisations have the right level of staff for their needs, with the necessary skills and capabilities. Getting workforce planning right helps organisations carry out their operations effectively so that they can achieve their objectives and priorities. A lack of robust understanding of future need and not …
HM Treasury
21
Conclusion
71st Report - Government’s use of exter…
Written evidence we received highlighted that government has faced long-standing challenges in developing and retaining core skills, and recommends not only building up civil service capability and capacity where skills are repeatedly needed but also providing training in the effective use of consultants.42 The Cabinet Office told us that it …
HM Treasury
22
Conclusion
71st Report - Government’s use of exter…
The Cabinet Office told us that, for the first time, government is developing multi-year strategic workforce plans for the civil service. The Cabinet Office has directed departments to provide five-year forecasts outlining the skills and capacity required to develop their workforces, including those of arm’s-length bodies. The forecasts include both …
HM Treasury
23
Conclusion
71st Report - Government’s use of exter…
We asked the Cabinet Office when it expects to publish the new strategic workforce plan. It told us that there is no confirmed publication date at present, but it hoped the government would be able to release the plan within four months of when we took evidence (which was on …
HM Treasury