The government spent nearly £1.5 billion on IT consulting between 2005 and 2006 representing nearly 50% of its annual consulting budget, a report released by Public Accounts Committee has found.

Key figures from the National Audit Office show that IBM was paid £275 million in 2005, LogicaCMG £175 million and Accenture £130 million.

In the last three years, spending on consultants generally has risen by a third, from £2.1 billion to £2.8 billion, of which the consultation requirements of central government account for £1.8 billion.

The Public Accounts Committee criticises the government’s haphazard hiring of consultants, and says that it needs to work harder to develop and retain core competencies internally. It is also suggests that a concentrated effort on reducing the reliance on external consultants could save the government approximately £500 million a year.