KPMG wins £223m UK government contract despite drive to cut spend on consultants
The UK government has awarded KPMG a contract worth up to £223m to train civil servants despite promising to slash the amount the state spends on external consultants.
The 14-month deal with the Cabinet Office, which is understood to be the second-largest public sector contract ever won by KPMG, will see the firm manage learning and development services across the civil service.
This includes overseeing courses on policymaking, communications and career development, as well as training for assessed or accredited qualifications delivered by universities, business schools and specialist providers.
A government spokesperson said the KPMG contract was agreed before the general election in July.
KPMG’s biggest public sector contract was a separate four-year learning and development deal with the Cabinet Office worth £237m that expires in October, according to data provider Tussell.
The new Labour government has pledged to halve spending on external consultants during this Parliament – something the Conservatives also committed to in their election manifesto – amid criticism that Whitehall has grown overly reliant on costly advisers.
In July, the Treasury estimated that reducing spending in this area would save £550m in the 2024-25 financial year and an additional £680m in 2025-26, which Chancellor Rachel Reeves said would partly go towards public sector pay rises.
The government spokesperson told City PM: “The contract’s value represents a maximum limit, not the total cost or likely spend. Any expenditure under the contract must represent good value for money.
“We have taken action to stop all non-essential government consultancy spending in 2024-25 and halve government spending on consultancy in future years.”
KPMG declined to comment when approached by City PM
The Financial Times first reported the news.
The new deal is also a sign of more positive relations between the Big Four firm and Whitehall.
In 2021, KPMG stopped bidding for UK government contracts after its ties to a series of scandals led the Cabinet Office to threaten to ban it from winning public sector work. The firm resumed bidding for these contracts the following year.