UK government awards £3.6bn management consultancy deals amid scrutiny of rising external expertise spending

UK government has awarded contracts for £3.6bn to secure management consultancy services for IT strategy, software spending and hardware investments, among a flood of other advisory categories.

Mammoth accounting and consultancy firm Accenture is one of the big winners in the tendering round, which dates back to 2019, racking up a maximum of £2.6bn in government contracts.

The contract award notice describes nine lots under the Management Consultancy Framework Three (MCF3) deal put together by the Cabinet Office through the Crown Commercial Service, its buying agency that takes a 1 per cent commission on all the money spent via agreements it organises.

The deal includes lots addressing business, finance, HR, procurement, environmental services but also looks at strategy and policy, and transformation and infrastructure including transport. These involve IT categories such as information systems or technology strategic review and planning services, software programming and consultancy services, hardware consultancy services, business analysis consultancy services, and information systems or technology strategic review and planning services.

Accenture has won across lots including IT, but also those involving finance and procurement, a move bound to raise questions over its ability to influence future IT purchasing decisions. For a full list of winners and how much they can potentially bill for, see the grey box.

The official notice says the framework is for “objective advice relating to strategy, structure, management or operations of an organisation”, and adds: “This included identification of options with recommendations as well as implementation and delivery.”

Buyers on the framework could be any UK public sector bodies – this means central government departments and their arm’s length bodies and agencies, local government, health, education, police, fire and rescue, housing associations and charities.

Government spending on consultancy work has come under the spotlight in recent months. The Register recently revealed management consultancy McKinsey appears to be well-placed to influence UK government’s future technology strategy after winning a £3m, eight-week contract to build business cases ahead of the Spending Review ’21.

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Writing in the Guardian, Rosie Collington of UCL’s Institute for Innovation and Public Purpose and Mariana Mazzucato, professor of economics at UCL, argued that UK state’s spending on consultancy had rocketed in the past five years – with Brexit and the pandemic making the trade lucrative for these advisors.

Between 2017 and 2020, approximately £450m was spent on consulting fees related to Brexit by government departments, with the receipts for COVID-19 contracts coming in at over £600m. These figures alone could pay the salaries of more than 10,000 civil servants for three years – and total spending on consultants across the public sector is much higher, they said.

In September last year, Cabinet Office and Treasury minister Lord Agnew, a public exponent of SMEs and a fierce critic of large consultancies, reportedly wrote to senior civil servants saying Whitehall has been “infantilised” by an “unacceptable” reliance on expensive management consultants. Agnew is behind the new Government Consulting Hub, launched in May, which is aimed at “reduc the amount that the government spends on consultancy, maximising value where consultants are really needed and upskilling civil servants to deliver consultancy-type work.”

He was said to not be involved in the appointment of McKinsey, or more recently the hiring of an IBM CTO into an advisory role for hybrid cloud and the formation of a UK government cloud council. ®