MoD Saves £2.75 Million a Year After Ditching Consultancy Dependency on Disposal System

Homeland May 19, 2026

The Ministry of Defence has cut £2.75 million in annual consultancy spend after overhauling the digital system used to process surplus military equipment, in a case study that its technology partner says points to a much larger savings opportunity across government.

The Defence Recycling and Disposals Team (DRDT) brought in British IT firm Tecknuovo to replace an outdated system that used the same form to process items as varied as disused clothing and decommissioned submarines, relied on an external contractor for its operation, and left the DRDT unable to manage the service independently.

The new system processes 13,000 items of end-of-life equipment each year, running 70% faster than its predecessor and saving 190 working days annually. Crucially, the DRDT now owns and operates the service itself, used by over 5,000 people, allowing it to terminate the old consultancy contract entirely.

The Dependency Problem

The DRDT case is small in the context of overall MoD consultancy spend, but it illustrates a structural problem that runs across Whitehall. The MoD spent approximately £86 million on external contractors in the 2024 financial year, down from £149 million in 2023, but insiders say significant further savings are available by bringing more digital delivery services in-house.

Katie Carruthers, Managing Director at Tecknuovo, was direct about the scale of the issue: “Departments across Whitehall have been buying in the same expertise for years without ever retaining it, trapping successive governments in an expensive cycle of dependency that serves suppliers far better than it serves taxpayers.”

The Public Accounts Committee has reached similar conclusions. HM Treasury estimates central government spent £1.36 billion on consultants in 2022-23, but external analysis suggests the true figure could be as high as £2.23 billion. The Committee has warned that public funds may be “walking out the door to external providers where government could do the job itself.”

The Zero Dependency Model

Tecknuovo’s approach to the DRDT project is based on what the company calls a Zero Dependency model, which transfers digital capability directly to civil servants rather than delivering a system that requires ongoing external support to function. The DRDT can now handle issues and developments internally, without paying consultants to intervene each time a minor problem arises.

Carruthers described the broader opportunity: “It is possible to do more for less by giving civil servants the tools they need to keep capability inside government. It doesn’t just save taxpayers money, it makes us more secure.”

The security dimension is worth noting. Systems operated and maintained in-house, by personnel with appropriate clearances and institutional knowledge, carry a materially different risk profile to those dependent on rotating external contractors. For a department handling sensitive data on military assets and disposal operations, that consideration is not trivial.

The Bigger Picture

The DRDT savings arrive at a moment of significant financial pressure on the MoD. The department is expected to make £3.5 billion in savings in the current financial year, with decisions on major contracts due by the end of May. A Defence Investment Plan providing long-term financial certainty for the department remains unpublished amid an ongoing dispute between Defence Secretary John Healey and HM Treasury, while Labour has set a target of £14 billion in departmental efficiency savings across Whitehall by 2028-29.

Against that backdrop, the argument for identifying and eliminating consultancy dependency wherever digital services can be brought in-house is likely to gain traction. The DRDT project demonstrates that the approach is deliverable and generates measurable, recurring savings rather than one-off reductions.

For the defence technology and digital services market, the direction of travel carries implications. Contracts that deliver genuine capability transfer to government clients, and that reduce rather than entrench dependency, are increasingly likely to be favoured over those that maximise billable hours. Businesses that can credibly offer the Zero Dependency model, or equivalent approaches, are well positioned as MoD procurement teams come under growing pressure to demonstrate value for money on digital spend.