Whitehall’s foreign affairs department intends to potentially eliminate the use of hundreds of external contractors and insource digital roles, as part of a broader plan to achieve efficiencies of 4.3%

The Foreign, Commonwealth and Development Office plans to build its internal digital capability by recruiting new staff to replace contractors on which the department currently spends a total of £17.6m a year.

As part of the recent Spending Review, the FCDO’s efficiency plan set out how the department intends to achieve annual savings adding up to 4.3% by the 2028/29 year.

One of the ways in which this cost-cutting will be delivered is via a plan to “insource digital roles, reducing contingent labour costs and thereby delivering efficiencies”, according to the FCDO’s delivery plan. Bringing more tech jobs in house will also “enable the FCDO to start building more resilient internal capability, while retaining flexibility and the ability to source external expertise and surge capacity where required”.

Following the publication of this plan, Conservative MP Wendy Morton, in a written parliamentary question, whether the department could quantify, in monetary terms, the savings that can be achieved by insourcing positions currently delivered by contractors.

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In response, Catherine West, a junior minister at the department, indicated that the recruitment of tech specialists will ultimately see the Foreign Office eliminate close to £20m of current annual spending on external experts.

The Foreign, Commonwealth and Development Office is implementing a strategy to reduce reliance on contingent labour in digital services,” she said. “As set out in the department’s internal planning, the annual cost of contingent labour identified for insourcing is estimated at £17.6m. This forms part of a wider programme to rebalance the workforce and invest in permanent digital, data and cyber capability. The department is transitioning funding from non-pay to pay to support this shift, with a projected increase in civil servant roles and a corresponding reduction in contingent labour. This approach aligns with the government’s strategic direction to improve efficiency and resilience in digital delivery.”

The tally of £17.6m equates to a little over 350 people earning £50,000 a year, 235 contractors on £75,000 a year, or 176 staff taking home £100,000 per annum.

Alongside these efficiencies, the FCDO also intends to make gains by delivering “updated IT services… replacing legacy IT systems and delivering streamlined services”, including increased deployment of cloud computing, according to the delivery plan.