TL;DR

The Cabinet Office has awarded a £456m contract to KPMG and EY to run AI and digital training for civil servants, splitting up to £319m and £137m between them. Procurement data provider Tussell rates it the largest single big-four award since its records begin in 2012. The government’s position is that training is not consultancy.

The contract and the pledge

The deal funds a National School of Government covering digital and AI skills alongside leadership and management. It starts in September and runs to March 2028, replacing an existing training arrangement due to expire.

The awkwardness is a matter of record. Labour came in committing to cut unnecessary consultancy spending, targeting £1.2bn of savings by 2026, after adviser costs hit record levels through the pandemic and new Whitehall controls followed in 2024.

A Cabinet Office spokesman drew a distinction rather than disputing the sum: “These contracts are for training services, not consultancy.” The department says its in-house model will cut external reliance and improve value, and that last year’s consultancy bill came down £600m, the smallest since 2020.

Nobody can agree what the baseline is

The rebuttal runs into a measurement problem MPs have already flagged. The public accounts committee found departments calculating adviser spending inconsistently this year. The Treasury put total spend at £1.36bn in 2022-23; other sources put it as high as £2.23bn. A £600m reduction means little against a range that wide.

William Yarwood of the TaxPayers’ Alliance was blunter, asking why a campaign against consultants had ended in a large payday for the big four, and arguing civil servants should be able to pick up new technology without buying in advice.

Looking forward

There is an irony the government has not addressed. The firms being paid to teach Whitehall about AI are the same sector that has been publishing reports containing hallucinated citations and invented case studies. Set against the £5bn of public sector AI contracts signed since 2018, this single award is the clearest sign yet that the state’s AI capability gap is being closed by purchase rather than by hiring.