Government slashes spending on Big Four heaping extra pressure on firms

The civil service has slashed the amount it spends on contracts with the Big Four by 26 per cent, new figures show, heaping further pressure on these firms after being forced to cut jobs as work dries up.

Deloitte was found to be the worst affected by Whitehall’s winding down of contracts, with spending on its services down 38 per cent this financial year, according to data from government spending analyst Tussell.

Despite the relative fall, it still received £336m from the public purse, the most of the four firms analysed in the report. 

Public sector spending with PricewaterhouseCoopers (PwC) was down 36 per cent this year, while Ernst & Young suffered a 19 per cent drop. 

KPMG was the only big four consultant to see an increase, with the value of its public contracts won rising by 18 per cent.

The Management Consultancies Association has questioned the figures, however.

The organisation’s chief, Tamzen Isacsson, told City PM: “It is totally inaccurate to claim that spending on consultancy services by the public sector has ‘collapsed’. In fact, we will record that it is increasing this year.

“Our most recent research from leaders of MCA member firms, due to be published in January, shows that overall consultancy spend for 2023 has grown by 11 per cent.”

The tech sector, however, was the real winner in Tussell’s Strategic Suppliers Report amid a general scaling down of government spending on its favourite suppliers. Over half the companies to benefit from an uplift were in technology, the report said. 

Spending with cloud computing firm Amazon Web Services was up 76 per cent on the previous year, to £253m.