Labour has handed consultants a £450m contract to deliver AI training to the Civil Service despite pledging to cut spending on external advisers.
Advisers at KPMG and EY are expected to receive close to £500m as part of a deal with the Cabinet Office, according to figures from Tussell, a procurement data provider.
The £456m contract marks the single biggest deal awarded by officials to the big four consulting firms since Tussell began collating figures in 2012. KPMG will receive up to £319m under the contract, while EY will be paid up to £137m.
The deal will cover the launch of a new National School of Government to train civil servants in “digital and artificial intelligence” skills as well as “leadership and management”.
A government spokesman said the new training school would ultimately offer better value for money compared with current contracts.
However, the deal casts fresh doubt on Labour’s pledge to cut all unnecessary spending on consultancies, with the aim of finding £1.2bn of savings by 2026.
Under plans introduced by Sir Keir Starmer’s Government in 2024, officials placed new controls on the use of external advisers across Whitehall after costs climbed to record levels during the pandemic.
William Yarwood, at the TaxPayers’ Alliance, said: “Taxpayers will be wondering why Labour’s war on consultants has ended with a £450m bonanza for the big four.
“Civil servants should already be capable of improving skills and adapting to new technology without ministers handing eye-watering contracts to corporate advisers.
“If Labour is serious about cutting waste, it should start by ending Whitehall’s addiction to paying for consultants.”
The Cabinet Office said the contract, which begins in September and runs until March 2028, will replace an existing civil service training scheme that is scheduled to expire.
The Government hopes that spending on AI training will help to improve efficiency and public sector productivity.
The big four have sought to cash in on the AI boom by offering training and digital transformation services. That is despite a series of embarrassing AI errors that have seen consulting giants reproduce AI hallucinations and fake case studies in recent reports.
MPs have raised concerns over a lack of reliable official data on how much taxpayer money is being spent on external advisory firms.
The public accounts committee warned this year that departments’ calculations of their spending on advisers were “inconsistent”.
While the Treasury estimated overall spending at £1.36bn in 2022-23, other sources said the figure could be as high as £2.23bn, the committee found.
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