Shadow chancellor Reeves pledges Labour would cut government consultancy spending in half

In her party conference speech, Rachel Reeves promised that, if elected, Labour would put in place ‘tough new rules’ requiring departments to demonstrate planned consultancy spend represented value for money

Labour has said it will slash government consultancy spending in half if it wins the next general election.

Speaking at the Labour Party annual conference this week, shadow chancellor Rachel Reeves also announced plans to chase down fraud by appointing a Covid corruption commissioner and a “hit squad of investigators” to support them.

Reeves said the party “will slash government consultancy spending, which has almost quadrupled in just six years” if it gets into power.

“Consultants can play an important role, but taxpayers must get value for money,” she said. “So, we will introduce tough new rules. If a government department wants to bring in consultants, they must demonstrate the value-for-money case. And if they cannot, then that request will be denied. We will aim to cut consultancy spending in half over the next parliament.”

Responding to the speech, minister for the Cabinet Office Jeremy Quin said it is already the case that consultancy spend provides demonstrable value for money.

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“The overwhelming majority of spend (70%) in this area is focused on bringing in specialists and technical experts needed to deliver value for money,” he said on Twitter/X.

In 2021, the government launched The Consultancy Playbook, which provides guidance to departments and arm’s-length bodies on how to commission and engage with consultants more effectively, with the aim of “achieving better outcomes, better value for money and improved civil service capability”, and ‘maximising value throughout – right from pre-procurement to contract exit”.

The Cabinet Office also made it easier for departments to spend money on consultants this year by discontinuing the dedicated spending controls for consultancy and professional services, effectively raising the threshold at which contracts with consulting firms require central approval from £600,000 to £20m – as exclusively revealed by PublicTechnology.

In another new pledge, Reeves said the party will “go after those who profited from the carnival of waste during the pandemic”.

If elected, Labour would appoint a Covid corruption commissioner who would be supported by a “hit squad of investigators, equipped with the powers they need and the mandate to do whatever it takes to chase down those who have ripped off the taxpayer, take them to court, and claw back every penny… that they can”, Reeves said.

The shadow chancellor said an estimated £7.2bn has been lost to fraud from Covid support schemes such as the Small Business Grant Fund, furlough and “Eat out to help out”.

Reeves claimed that just 2% of all fraudulently claimed Covid grants had been recovered.

Parliament’s Public Accounts Committee said in a report published last month that as of May, only £20.9m had been recovered out of £1.1bn in small-business support loans suspected to have been illegitimately obtained, which is 2%. Last month, DBT said the amount regained had reached £32.6m.

Tevye Markson

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