Does the UK Ministry of Defence Require Its Own Consulting Review?

The world has changed. So must our military.

Following my previous analysis of the US Department of Defense's consulting contract review, the UK Ministry of Defence finds itself at a pivotal moment for strategic decision-making. This initiative raises a fundamental question regarding whether the UK MoD should implement its own similar evaluation process. Available evidence strongly suggests that such a systematic review is not merely opportune but indeed essential for ensuring the long-term effectiveness and sustainability of British defence capabilities and resource allocation.

The current state of defence consulting in the UK is concerning. Government spending on external consultants has surged dramatically, with NAO reports showing the UK government spent almost 60% more on consultancies in 2023-24 than pre-pandemic 2020. Although the MoD spent ï¿¡86 million on consultancy in 2023/24, a decrease of ï¿¡63 million compared to the previous year, this figure appears to be inconsistent with the trend illustrated MOD Expenditure on Consultancy 2009/10 to 2023/24 (see figure 1 below). Nonetheless, this trend requires us to carefully scrutinise effective spending that directly impacts national security, particularly in the defence sector.

The need for reform stems from three critical challenges facing the Ministry of Defence.

First, financial efficiency has become paramount amid increasing global instability and tightening budgets; we consistently get asked to do more with less yet, demonstrating decreasing efficiency with the resources we have. The SDR notes that the MoD's financial settlement involves new recurring efficiency savings of 3% each year, over the next four years, which is an appropriate key performance indicator to hold leadership to account. This is where a review of MoD consulting practices may prove beneficial; current consulting expenditure often lacks clear value metrics, drawing growing scrutiny from Parliament and taxpayers who demand better value for money.

Equally concerning is the erosion of strategic independence. Years of outsourcing have hollowed out internal capabilities, with critical institutional knowledge increasingly residing with consultants rather than permanent staff. This dependency on external expertise has created a troubling dynamic where consultants, rather than career defence professionals, often shape strategic decisions whether by design or happenstance. This is further illustrated by the fact that the increase in non-competitive sourcing, which accounted for 44% of all MoD spending in 2023/24 and highlights potential risks of over-reliance on external expertise. There is by no means a quick resolution as there are numerous considerations creating a complex situation thwarted with zero sum conundrums. While in the short term consultants may remain critical, the MoD (and government writ large) must recognise that this ‘consultancy dependence’ is no longer sustainable or tenable.

Over-reliance on external consultants poses several risks to the MoD including potential conflicts of interest, loss of institutional knowledge, and reduced ability to develop in-house expertise. Moreover, excessive dependence on consultants can lead to a 'revolving door' phenomenon, where former MoD officials join consulting firms, potentially compromising the integrity of procurement processes and strategic decision-making.

Operational effectiveness has also suffered under the current model. The complex landscape of consulting relationships has led to slower decision-making and fragmented capabilities across different contracts. Defence objectives often become obscured within a web of overlapping consultancy workstreams.

The US Department of Defense's recent consultancy review will elicit valuable lessons for UK reform. Their approach, emphasising clear definitions of ‘essential’ services and strong senior-level accountability, provides a practical framework for change. Their rapid implementation timeline demonstrates that swift reform is possible when properly prioritised especially when aligned with strategic outcomes and presumably operational vignettes such as those in the Ukraine/Russia conflict.

The impact of consulting dependency is evident in several recent MoD projects. For instance, the Ajax armoured vehicle programme, which has faced significant delays and cost overruns, relied heavily on external consultants for project management and technical expertise. Similarly, the implementation of the Defence Equipment and Support (DE&S) transformation programme, while supported by consultants, has struggled to achieve its efficiency targets, raising questions about the value delivered by external advisors.

Critics may argue that external consultants bring necessary expertise and flexibility to defence operations. While this holds merit in specific technical domains, it does not justify the current scale of consulting dependency. A balanced approach that leverages external expertise while prioritising internal capability development is both possible and essential. Implementing consulting reforms within the MoD will face several challenges including resistance from entrenched interests, the need to rapidly develop internal capabilities to replace consultant expertise, and the risk of disrupting ongoing critical projects. Moreover, the MoD must balance the need for reform with maintaining access to specialised knowledge in rapidly evolving fields such as cybersecurity and AI.

A comprehensive UK reform should follow a three-stage approach and the immediate priority must be a thorough audit of existing contracts and clear categorisation of essential services. This should be followed by structural reforms to procurement controls and internal expertise development. Finally, a long-term strategy must focus on building sustainable internal capabilities while maintaining access to genuinely needed external expertise. The latter will be particularly difficult to achieve and requires a clear demand signal of what the UK MoD delivers and why.

The benefits of such reform would be substantial and beyond significant cost savings, the MoD would see enhanced internal capabilities and better alignment between consulting support and core defence objectives. Improved accountability would naturally follow from clearer oversight and more strategic use of external expertise. We can build a sustainable core team that is enhanced by consultancy specialists.??

The timing for reform is particularly critical given today's geopolitical tensions, rising defence spending requirements, and growing technological complexity. Budget pressures across government add urgency to the need for more efficient consulting arrangements and present an opportunity for a leaner, more focussed MoD organically underpinned but externally supported.?

The rapid pace of technological advancement in defence systems, from AI-driven analytics to quantum computing, underscores the need for a more strategic approach to consulting. While external expertise is crucial in cutting-edge fields, over-reliance on consultants risks creating a dangerous knowledge gap within the MoD itself. Reform must prioritise building internal technological capabilities to ensure the UK remains at the forefront of defence innovation. Areas such as artificial intelligence, quantum computing, and autonomous systems require highly specialised expertise that may not be available in-house. The MoD must develop a nuanced approach that allows access to leading technological knowledge while building internal capabilities. This could involve innovative public-partnership models with tech firms and academic institutions, moving beyond traditional consulting relationships. It is however worth noting that the MOD faces significant challenges in delivering its desired military capabilities, with the Public Accounts Committee reporting that there is no credible government plan to do so.?

The UK's unique defence ecosystem demands an efficient and effective approach to consulting, mirroring the urgency driving reforms in the US DoD. While international comparisons offer valuable context, the critical question is how swiftly and decisively the UK can act. The ongoing Strategic Defence Review presents a pivotal opportunity to reshape consulting practices, ensuring they bolster, not burden, our national security. As global tensions escalate and the nature of warfare evolves, decisive action is imperative. The world has changed; to safeguard our future, our military - and its approach to external expertise - must change with it.