Rachel Reeves is right - but buying British alone won't deliver growth

Gus Sargent, CEO & Founder at Tecknuovo

When government contracts for ships, steel, energy and artificial intelligence flow overseas, the public rightly asks why. The Chancellor is correct to be frustrated - and rows over the Met Police's proposed Palantir contract show this debate has broken well beyond Whitehall.

But "buy British" alone risks stopping short of the harder question, because the supplier's nationality is only part of the problem. The further issue is what we actually get for the money, and too often the answer is a service that the government can't run itself.

As public services grew more complex and the pace of technological change accelerated, departments turned to external contractors to fill the gap. In many cases, it was the only realistic option - capability simply was not there in-house. But what began as a pragmatic short-term fix has since become the established model.

Contractors come in, build the system, and stay - charging a premium to manage and maintain services while holding onto the expertise needed to do the work. Civil servants are handed something they nominally own but cannot adapt or improve without calling the same supplier back in. This is the "land and expand" playbook, and it has locked successive governments into dependency on a handful of major consultancies.

According to the National Audit Office, public sector spending on consultants exceeded £1.3 billion in 2022-23 - almost certainly an underestimate - while the Public Accounts Committee recently warned government still has no proper grip on what it spends. Set against the Chancellor’s target of delivering £14 billion in efficiency savings by 2029, the tension is impossible to ignore.

You cannot close that gap by renegotiating contracts with the same foreign suppliers you have always used. Our only way to close it is by building the capability to stop needing those contracts in the first place.

That means training civil servants to run and evolve their own services, transferring knowledge throughout delivery rather than gesturing at it during handover, and choosing partners whose measure of success is whether the department still needs them. Platforms that cut delivery times by three quarters, systems that save millions annually, teams that can maintain what they have built without calling anyone back in - that is what true in-house capability looks like in practice.

It is an approach we call Zero Dependency - and as a British business, it is exactly what Tecknuovo was built to deliver. Giving departments the tools to deliver independently.

What's missing from this debate is a more fundamental question: what does government actually own when the contract ends? Swapping one supplier for a British alternative doesn't address that part of the problem. Whitehall departments would still be left holding systems they can't run, tasked with delivering growth without the skills or tools to do it.

Reeves is right that Whitehall has drifted into dependency, and right that it is costing the country far more than the invoices suggest. But if the goal is genuine growth - resilient public services, sovereign capability, a state that can actually deliver - then buying British is only the beginning.

British companies should be at the front of the queue. But the test isn't just where they're based. It's what they leave behind.

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Gus Sargent is the CEO & Founder of Tecknuovo, a British technology consultancy working at the heart of government to help departments reduce dependency on external contractors, build in-house digital capability and deliver more efficient public services.

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