Government’s £1.2bn consultancy cut clashes with AI push, COO argues

TL;DR:

• An LBC opinion piece by Leading Resolutions COO Jon Bance argues the UK government’s £1.2 billion consultancy-budget cut sits awkwardly alongside the Chancellor’s pledge to make Britain the fastest G7 adopter of AI.
• Bance frames consultancy spend as essential to digital-transformation delivery and warns “shadow AI” use is rising as employees turn to unvetted tools to keep up with workload.
• Resultsense view: the piece is industry commentary from a consultancy executive, not independent analysis, but it surfaces a real public-sector tension UK boards should track — particularly as Spring 2026 spending plans clarify how the cut will be distributed.

Bance’s argument, published by LBC’s opinion section, is that cutting consultancy spend is a “vanity metric”: superficially attractive to taxpayers but failing to address the structural reasons departments hire consultants in the first place. He cites Management Consultancies Association research that 84% of businesses using consultancy services said the work met or exceeded expectations, and that 58% of private firms plan to increase their use of consultants.

The UK policy tension

Two government commitments now sit in unresolved tension. The first is Chancellor-led ambition: Britain to be the G7’s fastest AI adopter. The second is the Treasury-led commitment to slash £1.2 billion from departmental consultancy budgets by 2026, following a parliamentary investigation that flagged inconsistent reporting and limited oversight in consultancy spending.

For UK central-government IT projects, those two commitments push in opposing directions. AI rollouts at speed depend heavily on outside expertise — most departments do not currently have the in-house engineering depth to design, govern and operate AI systems unaided. Cutting consultancy budgets without first building that internal capacity risks technical debt, the argument runs, leaving departments with AI tools they cannot adequately oversee.

”Shadow AI” as an emerging risk

Bance also flags a phenomenon UK security teams are increasingly raising: employees turning to unvetted AI tools — what some now call “shadow AI” — to keep up with output expectations. The risk is that fragmented tooling produces governance blind spots, with sensitive data flowing through systems IT and security functions cannot inventory.

The argument has limits. As Leading Resolutions’ COO, Bance has commercial interest in larger consultancy budgets, and the piece reads more as professional advocacy than independent analysis. But the structural concern — that AI ambition without delivery capacity creates technical debt — is one that has surfaced repeatedly in National Audit Office reports on previous IT programmes.

Looking forward

The Spring 2026 spending plans will be the test of how the Treasury intends to balance these commitments in practice. UK businesses contracting on government work — and those competing for talent in AI delivery — should expect a more turbulent procurement environment over the next 12 months as departments figure out how to deliver on both directives at once.