Home Office increases tech consultant spending to £350m despite cost-cutting pledges

Increase follows six-month delay to the launch of a crucial contract

Despite the government’s recent promises to slash consultancy spending, the Home Office has raised its planned expenditure on external data and technology consultants by £100 million, bringing the total maximum spend to £350 million.

The increase follows a six-month delay to the launch of a crucial contract intended to provide external expertise for the Home Office's Data Services & Analytics (DSA) service, a critical unit responsible for delivering data matching, analytics, reporting, and insight across the Home Office and related entities.

Last week, the Home Office issued a revised procurement notice for the DSA contracts, which are designed to supply "data-related professions on a resource augmentation basis, as well as outcome-based pieces of work" – essentially a formal description of spending on consultants.

The procurement is divided into two lots:

• Lot A: Data Led Multifunctional Teams – This lot will commission multi-functional, integrated teams to support the transformative rollout of the DSA's emerging data strategy. Their role includes standardising and integrating bespoke functionalities from related programmes into DSA's core offerings. Lot A carries a non-committed capped value of approximately £200 million over the contract term.
• Lot B: Data Professions – This lot will cover teams and specialists within data and data-related Digital, Data and Technology (DDaT) professions. Any non-data specialists needed to form teams will be hired as civil servants or sourced through interim frameworks or other Home Office DDaT central contracts. Lot B has a non-committed capped value of up to £150 million over the term.

The contracts are scheduled to commence on 2^nd March 2026.

The start date represents a delay from earlier government notices: a "future opportunity" announcement in October 2024 projected an 11th August 2025 start, while a June 2024 early engagement notice pegged the contract's indicative value at £250 million over five years.

For the procurement, the Home Office plans to use an existing framework agreement called Digital Specialists and Programmes, which includes major consultancy firms such as Accenture, Capita, Capgemini, CGI, Sopra Steria and Tata.

This increase in consultancy spending stands in contrast to the UK government's broader aim, outlined in June's spending review, to curb the use of external consultants.

The review reported savings of £550 million in the 2024-25 fiscal year by halting non-essential consultancy expenditures and anticipates savings exceeding £700 million annually by 2028-29 – a reduction by half compared to previous trajectories.

Government watchers and parliamentary overseers are likely to be concerned not only by the escalating cost but also by the underlying erosion of internal capabilities.

In a 2023 report, the Public Accounts Committee stated that the government's digital ambitions remain severely hampered by staff shortages and insufficient support and accountability from senior leadership.

Dame Meg Hillier MP, then chair of the committee, warned that progress was "hobbled" by these persistent human resource constraints.