Why Is Labour Paying Consultants for Civil Service Training?

The government has agreed up to £456m of civil service training contracts with KPMG and EY, the biggest single award to a Big Four firm since the contracts data firm Tussell began keeping records in 2012. The Cabinet Office confirmed the deals this month. They cover artificial intelligence, digital skills, leadership and management development, and they run only until the end of March 2028.

KPMG takes the larger slice, capped at £319.2m. EY's is capped at £136.8m. Those are ceilings rather than cheques — nobody is obliged to spend a penny of it, and departments rarely use the full headroom on arrangements of this kind. Even so, the money covers roughly 19 months of work, which makes the underlying run rate look steep.

That is the bit that stings politically. Labour came into office in 2024 promising to halve what Whitehall spends on outside consultants and bank more than £1.2bn by 2026. Paying two of the Big Four the best part of half a billion pounds to teach officials how to use AI is not the image ministers had in mind. The Cabinet Office insists the distinction matters.

What £456m Actually Buys

These are extensions of arrangements already running — 14 extra months, bridging a gap rather than launching something new. Departments, arm's-length bodies and agencies can all draw on them, which is part of why the ceiling is so large: it covers the whole of central government, not one department's shopping list. The priority areas set out are narrow enough to check:

• Artificial intelligence and how to apply it to policy and operational work
• Digital skills for non-specialist staff
• Leadership development, aimed largely at senior grades
• General management training

For scale, this replaces a far bigger arrangement drawn up under the previous government, which had been sized at roughly £2bn. Measured against that, £456m is a substantial cut. Measured against a party that campaigned on weaning Whitehall off consultants, it is an uncomfortable number to defend on a Tuesday morning.

Why It's the Biggest Deal Since 2012

Tussell's figures suggest nothing this large has gone to a single Big Four firm in 14 years of tracking. The previous high was a £322m Foreign Office contract awarded to PwC in 2012. The scale lands differently at each firm. KPMG's ceiling is worth close to a quarter of its entire UK advisory net sales — a single public sector award moving the needle on a whole business line.

EY's share works out at roughly 13% of its UK consulting revenue. The wider trend is heading up rather than down: Big Four firms have already won around £1.25bn of UK government work during 2026, comfortably past the £1.06bn they took across the whole of 2025. EY declined to comment on the award when approached.

Is This Training or Consultancy?

This is the argument the government needs to win, because its savings target depends entirely on where the line is drawn. Consultancy spending is counted, published and compared year on year. Training bought from a consultancy is counted differently. That accounting choice is worth hundreds of millions of pounds to the headline figure.

The Cabinet Office's Defence

A departmental spokesperson was direct about the classification, and about what is meant to come next:

These contracts are for training services, not consultancy... Our new in-house model, the National School of Government, will reduce reliance on external spending.

The department also points to its record. Consultancy costs fell by more than £600m last year, reaching a five-year low, and it is committed to £700m of annual savings by 2028/29. Major new contracts now require sign-off at Cabinet level before they proceed.

Where the Accounting Gets Blurry

The Public Accounts Committee took aim at precisely this earlier in the year, warning that the way some payments to consulting firms are classified allows departments to under-report what they spend on consultancy. The committee was not ruling on these contracts, which came later. But it means the £456m will be read two ways, and both readings can point to official figures.

The School That's Supposed to End This

The point of a bridge is what sits on the far side. In January, Darren Jones, then chief secretary, announced a National School of Government and Public Services — an in-house institution covering leadership, policy, economics, data and AI, designed to pull civil service training back inside government. He said it would be funded from existing budgets and save taxpayers tens of millions.

There is history here. The original National School of Government was closed in 2012, the same year as that record PwC contract, and Whitehall has leaned on outside firms for senior development ever since. Procurement documents suggest the new school could open as early as April 2028 — the month straight after these contracts expire.

What Happens to Civil Service Training Next

Watch the gap between the ceiling and the actual spend. £456m is a maximum, and the figure that matters is what departments genuinely draw down. That shows up in transparency returns and on Contracts Finder, not in press releases. If real spending on civil service training lands well below the cap, the government's defence broadly holds.

The second thing to watch is that April 2028 date. If the school slips back to 2029, as originally planned, something has to fill the gap — and the obvious candidate is another extension to a Big Four deal. That is exactly how a temporary bridging contract quietly becomes the permanent arrangement.

If you work in or around Whitehall, the practical read is simpler. AI and digital training is coming, it is funded, and for the next 19 months it will largely be delivered by KPMG and EY. When you get the invitation, it is worth asking who is actually teaching the course — because by spring 2028, that answer is meant to have changed.