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UK government outlay on temps and consultants jumps over five years

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Spending on temporary workers and consultants has increased across many UK government departments, sparking accusations that Whitehall has failed to invest in skills across the civil service.

The number of temporary staff and consultants employed by the government soared during the pandemic, but several have increased their dependence on outside expertise after the crisis subsided, according to Financial Times analysis of annual departmental reports.

This was particularly pronounced in key departments including the Home Office, the Foreign, Commonwealth & Development Office and the Department for Business, Energy and Industrial Strategy (BEIS), where spending on outside workers has in some cases doubled in the past year.

The government “should not be reliant on temporary workers”, said Dame Meg Hillier, chair of the Commons public accounts committee, which scrutinises Whitehall expenditure. “If you know you need specialist skills — on digital, procurement, finance — build that up, don’t buy it in,” she added.

Her comments come after chancellor Jeremy Hunt earlier this month vowed to reduce the size of the civil service by 66,000, leading some to question whether this could lead to an even greater reliance on outsourced labour and expertise.

Spending on temporary workers, including agency staff, increased by 115 per cent to £1.5bn across core government departments between 2018-19 and 2021-22, according to FT calculations. Meanwhile, expenditure on consultants increased by 130 per cent to £723mn over the same period.

But this reliance on outside workers has remained high in some departments. The Home Office almost tripled spending on temporary staff from £87mn in 2018-19 to £245mn in the financial year to March 2023, while spending on consultancy increased fivefold from £20mn to £117mn over the same period. Spending on both nearly doubled between 2021-22 and 2022-23.

BEIS, meanwhile, doubled its spending on temporary workers to £43mn between 2018-19 and 2022-23, while spending on consultancy increased by 1,000 per cent to £112mn, including a £5mn increase in 2022-23.

FCDO spending on temporary staff jumped more than sevenfold from £7mn to £50mn between 2018-19 and 2022-23, including a £10mn increase in 2022-23. Expenditure on consultancy increased only marginally over the same period.

The National Audit Office, the spending watchdog, raised concerns in 2016 that spending on temporary workers and consultants was creeping up after years in which it had successfully been reined in. The NAO said there was a risk that managers would increasingly turn to higher-cost consultants and temporary staff to bypass their department’s controls over recruitment.

“Strategic workforce planning is critical in managing cost pressures, but is under‑developed in departments,” it noted, adding that pay for temporary workers had risen considerably, including in some cases specialist staff being paid twice as much as their nearest permanent equivalent. 

While it was justifiable to use temporary staff and consultants when genuine expertise was needed or when more people were required at short notice because of events such as Covid, said Jack Worlidge, a senior researcher at the Institute for Government think-tank, “if surge capacity doesn’t unwind after the shock, or if the need could have been anticipated, that looks like a failure of workforce planning”.

Worlidge added that there was a risk of departments “always reaching for the same lever” and becoming “addicted” to bringing in outside expertise, rather than working to develop skills in-house.

Not all government departments have increased their reliance on outside expertise since the pandemic, however.

The Cabinet Office maintained spending on temporary workers at roughly £59mn between 2018-19 and 2022-23, while slashing spending on consultancy from £44mn to £21mn.

The Department for Health and Social Care increased its spending on temporary workers by 1,500 per cent between 2018-19 and 2021-22, the last year for which it submitted an annual report, to £416mn, and increased spending on consultants by 1,200 per cent to £252mn, in large part due to the pandemic. 

The DHSC said it had since undertaken a big reform and efficiency programme to slash its reliance on costly external support.

Dave Penman, general secretary of the FDA trade union that represents civil servants, said it was unsurprising that the challenges of Brexit, the pandemic, the Ukraine war and the migration crisis meant that Whitehall had required additional personnel in recent years.

But he warned: “You cannot simply turn off and on the demand for a skilled workforce without inevitably paying a premium for contingent staff, whether they be short-term hires or consultants.”

He added that ministers should engage in better long-term planning for skills and resources across the civil service.

A government spokesperson said that “contingent labour is only used where additional technical specialists are needed to deliver vital public services, and it represents best value for money” and added that it had “always been clear that all contracts must achieve value for taxpayers”.

They added that data on contingent labour spending across government would be monitored to identify areas where further analysis and scrutiny was required.

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