A new report from the CADA Network and the Autonomy Institute, covered exclusively in the Guardian, exposes the scale, cost and risks of London councils’ growing reliance on private consultancy firms.

The analysis is the result of the first comprehensive, transaction-level analysis of its kind to explore the use of private consultancy in UK local government - starting with London’s 32 boroughs.

Between 2013 and 2023, London councils increased their spending on private consultancies by 76%

Taking inspiration from Mazzucato and Collington’s influential book ‘The Big Con’, the report’s findings reveal a striking and accelerating dependence on outsourcing and consultancy, raising concerns about value for money, loss of institutional memory, and weakened state capacity at the local level.

Key findings:

- £555 million has been spent by London councils on consultancies in 2024 alone.

- There has been a 76% rise in average annual consultancy spending per council between 2013 (£11.5m) and 2023 (£20.2m).

- Nearly 30% of London councils have, at least once since 2010, spent 5% or more of their total annual budget on consultancies.

- Three firms dominate council spending. Since 2010,

- Matrix SCM have received contracts worth over £2.1 billion.

- Capita have received contracts worth £1.1 billion

- Serco have received contracts worth nearly £500 million

- Spending patterns suggest systemic, long-term outsourcing of core council functions, not short-term specialist advice.

The new project was the first of the CADA Network - a new group of scientists and technologists who pursue research projects for the public good. CADA is incubated by the Autonomy Institute.

These findings are drawn from a new, reproducible data pipeline developed by CADA, which harmonizes thousands of inconsistent council datasets into a single, queryable platform – the most comprehensive dataset of London’s consultancy spending to date.

The report warns that London councils are increasingly dependent on large outsourcing firms for essential, everyday functions rather than occasional specialist expertise. This risks eroding internal capability, leaving councils unable to deliver services without private contractors.

A striking example is provided by a case study of Barnet Council. After outsourcing a vast suite of services to Capita in 2013, the council experienced service failures, fraud scandals and unmet savings targets. Even after committing to insource services in 2022, Barnet was forced to extend its outsourcing contracts because it no longer possessed the internal capacity to operate the services independently.

The report highlights that firms such as Matrix SCM, Capita and Serco deliver similar services to multiple councils simultaneously, allowing them to capture economies of scale. Councils, procuring services one-by-one and in isolation, face comparatively weak bargaining power and higher long-term costs.

Even where collaborative models (such as waste partnerships) exist, these remain patchy across London. Several boroughs that brought services back in-house between 2012 and 2022 did so citing cheaper costs, more flexibility and better performance.

The authors argue that rebuilding in-house expertise, strengthening inter-borough collaboration, and improving transparency are essential steps for restoring capability to London’s councils. They also stress that austerity-driven cuts have intensified outsourcing: hollowed-out departments are forced to rely on private firms simply to deliver statutory services.

Dr. Will Stronge, Chief Executive at the Autonomy Institute said:

"This research shows how local government capacity has been hollowed out by years of outsourcing and austerity. London’s councils are now structurally dependent on private consultancies for core functions, and that should worry all of us. Rebuilding public capability, rather than buying it in at a premium, is the only sustainable route to resilient, democratic local government in the long term. This project was an excellent first collaboration with the CADA Network."

ENDS

Notes for editors

- The Autonomy Institute is a leading think tank, producing data-driven research to support a more resilient, equitable and democratic economy.

- CADA is a volunteer network of scientists, technologists and data practitioners applying their expertise to advance socially useful, progressive projects. It is incubated by the Autonomy Institute.

- Full report available at: https://autonomy.work/wp-content/uploads/2025/12/LONDON-BIG-CON_.pdf

- Coverage in the Guardian: https://www.theguardian.com/society/2025/dec/06/london-councils-warning-structurally-dependent-on-private-firms-as-report-shows-500m-spend

- For enquiries or interviews, contact Jack Kellam, Head of Communications. Email: jack@autonomy.work | Tel: +44 7710 177 201

Methodology

- Analysis covers transaction-level spending data from all 32 London boroughs (2010–2024).

- Data was harmonised using bespoke scrapers and cleaning scripts tailored to each council’s inconsistent publication formats.

- Supplier classification combines seed lists, keyword analysis, manual verification and FOI comparisons.

- Figures represent a conservative lower-bound due to inconsistent reporting and supplier name variations.

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