Disclaimer:
This article is written from the perspective of someone working alongside government delivery teams. It is not intended as criticism of individuals, departments, or the Civil Service. Instead, it reflects on structural and cultural factors that influence capability and retention across the public sector. I’ve reluctantly written this blog for the purposes of transparency.
I never start blogs with my own opinions, but this time, I’m breaking my own rule. The government staff I work with are, without exception, some of the best and brightest I’ve ever met; there is materially no difference in skill level between public and private sector employees. Since working with teams across Defence and National Security, I’ve seen how capability and culture hinge on the people inside government. The talent is there - driven, skilled, and motivated and therefore as I’ve already said, the problem is not quality, it is economics. Many of the most capable public servants reach a ceiling that forces them to make an uncomfortable trade: stay and stagnate, or leave for the private sector where their work is valued differently. Inevitably, many choose the latter. Ironically, government then buys their expertise back through supplier frameworks at a much higher cost¹.
This is not about greed or disloyalty. It is about a system that undervalues delivery skills while demanding world-class outcomes.
The Pay Paradox
Civil Service pay policy was built for consistency, not competition². That design worked when most government work was administrative. It no longer fits a delivery model that competes for software engineers, product managers, and data scientists in the open market because there simply aren’t enough of those skills to go around.
Let’s share some (well research and referenced) data:
On paper, the pay gap is 25–40% depending on skill and region⁴. In practice, it is wider once allowances, pensions, and flexibility are considered. Taking the most common route, an independent contractor working through a sub-contractor being billed via a government prime, will cost more than £1,000 per day⁵. Departments know this, but they cannot easily change it. Civil Service Pay Remit rules cap pay flexibility². DDaT (Digital, Data and Technology) allowances exist, but they are inconsistently applied and time-limited³. The result is an expensive equilibrium where capability constantly leaks out.
The Cost of Buying Back Capability
Every department I’ve worked with tells a version of the same story. A skilled developer or product manager leaves for a consultancy role. Within months, they return to the same organisation - this time through a supplier contract, earning double what they did before¹. It is neither their fault nor the department’s. It is a rational response to a broken reward system.
Government spends billions annually on digital delivery suppliers. Much of that spend represents legitimate short-term need e.g. scaling up quickly or accessing specialist expertise. However, a growing proportion reflects substitution rather than augmentation: people filling roles that should exist permanently inside the Civil Service but cannot be retained because of pay compression. According to the Institute for Government’s 2024 Civil Service Capability Review, digital and data roles have among the highest attrition rates in government, driven largely by pay disparity and slow progression⁸. The result is dependency on external capacity that becomes structural, not temporary.
Why Government Cannot Easily Fix It
There is no simple solution. Civil Service pay bands are bound by collective bargaining and Treasury controls that prioritise fairness and fiscal predictability². Market-linked pay threatens internal parity, and across 500,000 employees (it really is that many!), even a small percentage uplift has major budgetary consequences. The flip-side? Doing nothing has a higher cost. High turnover with poor retention drives contractor reliance. Projects lose continuity, institutional knowledge decreases, and delivery slows. In agile environments, that fragility translates directly into waste.
The Cabinet Office Pay Guidance 2025 acknowledges this tension, urging departments to “balance market alignment with affordability and equality obligations”². But until pay strategy differentiates between administrative and digital professions, the problem will persist. A system built for control cannot produce agility.
A Better Balance
If government is serious about closing the talent gap and saving money, three shifts are needed.
1. Introduce transparent market benchmarking.
Publish annual comparisons between DDaT pay bands and equivalent private-sector medians, using ONS and industry data⁴. This makes the trade-offs visible and enables informed policy decisions.
2. Apply DDaT allowances consistently.
Currently, departments interpret the rules differently³. A developer in one department may receive a 25% allowance, while the same role elsewhere does not. Consistency would help stabilise retention without breaking Treasury rules.
3. Redefine supplier relationships.
Suppliers should provide flexibility, not cover for systemic gaps⁵. Departments could convert long-term supplier roles into civil service posts where it saves money over two years. That would convert temporary cost into permanent capability.
None of this diminishes the role of private delivery partners. It recognises that the best delivery models combine internal and external expertise intentionally, not by default.
Why Do I Care?
As a product consultant, you might be wondering why I care about a topic like this, as clearly, I operate in the private sector. I care because agile teams rely on continuity, shared learning, and trust. High turnover breaks all three. Evidence-based management can only work when data, context, and history stay within the organisation⁹.
The government’s stated ambition is to be “an employer of choice for digital professionals”¹⁰. That will remain a slogan until pay structures reflect the market in which those professionals actually operate. Purpose is powerful, but purpose alone cannot pay a mortgage.
Conclusion
It is easy to cast suppliers as opportunists, but the truth is more complicated. Most private sector partners provide genuine value. They offer speed, expertise, and capacity that government cannot always sustain internally. They absorb delivery risk and ensure continuity when recruitment pipelines stall. Consultancies also operate under different cost structures because a high day-rate also covers pensions, compliance, bench time, and business risk⁵. When a supplier charges £1,000 per day, the consultant might see £600 of that; the rest funds resilience.
The issue is not the existence of suppliers, but the degree of dependency. When external partners become permanent fixtures, capability growth stagnates. The public sector ends up renting its own people back indefinitely.
References
- Institute for Government, Civil Service Capability Review 2024. https://www.instituteforgovernment.org.uk/publication/civil-service-capability-review
- HM Treasury, Civil Service Pay Remit Guidance 2025. https://www.gov.uk/government/publications/civil-service-pay-guidance-2025
- Cabinet Office & Ministry of Defence, DDaT Profession Capability Framework and Pay Data 2024–25. https://ddat-capability-framework.service.gov.uk
- ITJobsWatch, Defence and National Security Salaries 2025. https://www.itjobswatch.co.uk/jobs/uk/defence.do
- ITJobsWatch (Contracts), Defence Sector Contract Rates 2025. https://www.itjobswatch.co.uk/contracts/uk/military.do
- Glassdoor UK & ONS, Data Science Salary Benchmarks 2025. https://www.glassdoor.co.uk/Salaries
- Cyber Security Jobsite, DV-Cleared Contract Rates 2025. https://www.cybersecurityjobsite.com
- Institute for Government, Civil Service Capability Review 2024. https://www.instituteforgovernment.org.uk/publication/civil-service-capability-review
- Scrum.org, Evidence-Based Management Guide 2024. https://www.scrum.org/resources/evidence-based-management-guide
- Government Digital and Data Profession, DDaT Workforce Strategy 2025. https://ddat-capability-framework.service.gov.uk