A decade of the escalation: the chronicle of the increase in the Federal Government's advisory expenditure in Germany (FRG)

External consultants are costing the German government more and more – controversy surrounds billions in spending.

The German government's spending on external consultants has risen dramatically over the past ten years and has become a controversial political issue. The available data reveals a worrying trend that goes far beyond the figures already released for 2022 and 2023.

The structure of the German federal administration

According to Article 62 of the Basic Law, the Federal Government consists of the Federal Chancellor and the Federal Ministers. Since May 6, 2025, under Federal Chancellor Friedrich Merz (CDU), the Federal Government has comprised a total of 17 ministries. These ministries, as the highest federal authorities, are the top brass of the federal administration and bear responsibility for various policy areas, also known as departments.

The federal ministries have several key tasks: They prepare legislation and advise the government. Furthermore, they perform the essential function of political leadership and simultaneously form the top management of the federal administration. Each federal minister heads their department independently, within the framework of the directive authority exercised by the Federal Chancellor.

The paradoxical development: staff expansion and growing dependence on consultants

The development of consulting expenditures appears particularly problematic in light of the federal administration's staffing levels. The federal administration has grown steadily in recent years and now employs around 300,000 people, many of them highly qualified civil servants and experts. In less than ten years, the workforce has been increased by approximately 50,000 positions.

Despite these extensive personnel resources and the existing expertise within federal ministries and agencies, the trend of engaging external firms and law firms as consultants remains unbroken. Current estimates suggest that approximately 2,600 external consultants work for the federal government daily. If these consultants had their own ministry, it would be one of the largest in Germany in terms of personnel.

Current dimensions of consultant spending

The latest figures illustrate the extent of the problem: In 2023, consulting expenditures reached a new record high of €239.4 million. This represents a drastic increase of €53.8 million compared to the previous year, 2022. At the same time, the number of consulting contracts also increased from 765 in 2022 to 816 in 2023.

The Federal Court of Auditors has sharply criticized this development, finding that government spending on external consulting and support services has increased by 39 percent since 2020. This cost explosion is particularly noteworthy given the current budget crisis, while many social projects are facing budget cuts.

Criticism from the Federal Court of Auditors and lack of strategy

In its latest audit report, the Federal Court of Auditors criticized the German government for spending increasing amounts of money on external consultants and even relinquishing core administrative functions. The report found it particularly problematic that there is both a lack of a strategy to change this and a lack of transparent reporting to parliament.

To date, the German government has no strategy for reducing its reliance on external consultants. Furthermore, many services provided by external parties, particularly in the IT sector, are no longer subject to reporting requirements, thus eliminating effective parliamentary oversight.

Extended overview of consultant expenditures by ministry

The following detailed breakdowns illustrate the dramatic increase in consulting expenditures in the individual ministries and demonstrate how this problem permeates the entire federal administration. It becomes clear that not only individual departments are affected, but that there is a systemic problem within the German federal administration that urgently requires a fundamental solution.

Federal Ministry of the Interior (BMI)

The Federal Ministry of the Interior (BMI) tops the list of the largest consumers of taxpayer money for external consulting services. In 2019, expenditures reached their peak at €154.3 million before the redefinition of consulting services. Following this redefinition, costs fell drastically to €50.1 million in 2020. However, in subsequent years, expenditures rose steadily again: to €56.9 million in 2021, stagnating at this high level of €56.9 million in 2022, and then increasing once more to €59.7 million in 2023, representing a 19 percent increase since 2020.

Between 2017 and 2021 alone, the Federal Ministry of the Interior (BMI) spent a total of €492.9 million on external consultants. A large portion of these expenditures went toward “cross-departmental projects such as IT consolidation.”
The German federal administration is facing an unprecedented challenge: Spending on external consultants has increased dramatically over the past ten years, raising fundamental questions about the efficiency and independence of public administration. This trend is not limited to individual departments but extends across the entire federal government and its 17 ministries.

Federal Ministry of Finance (BMF)

The Federal Ministry of Finance (BMF) has recorded a remarkable upward trend in its expenditures. This development shows significant fluctuations: while expenditures rose from €24.0 million in 2017 to €52.7 million in 2019, they reached their peak of €72.4 million in 2020. After a significant decline to €31.1 million in 2022, expenditures rose again to €38.2 million in 2023. The question of the driving factors behind this sustained upward trend in Ministry of Finance expenditures remains central to the assessment of its fiscal management.

Federal Ministry of Transport and Digital Infrastructure/Transport (BMDV)

The Federal Ministry of Transport and Digital Infrastructure (BMVI) consistently ranks among the largest expenditure items in the federal budget. In 2017, expenditures amounted to €28.0 million, of which €15.4 million alone was spent on consulting services related to truck tolls. Expenditures rose steadily in the following years: to €47.7 million in 2019 and €63.2 million in 2020. Over the period from 2017 to 2021, the Ministry of Transport's total expenditures amounted to €196.9 million.

Federal Ministry of Health (BMG)

The Federal Ministry of Health (BMG) exhibits a particularly dramatic increase in costs associated with the use of external consultants. Expenditure rose steadily from €0.13 million in 2014: to €0.37 million in 2015, €0.46 million in 2016, €1.01 million in 2017, €2.91 million in 2018, €17.5 million in 2019, and finally reached €41.9 million in 2020. The explosion in consulting costs at the BMG is particularly noteworthy: from €134,654 in 2014 to over €41 million in 2020 – a 300-fold increase. During the COVID-19 pandemic, €21 million alone went to a single consulting firm for “operational management services to support the procurement staff.”

Federal Ministry of Defence (BMVg)

The Ministry of Defense, at the center of the "consultant affair," exhibits remarkable spending patterns. In the first half of 2019, the ministry spent €155 million – almost as much as all 13 other ministries combined. It is striking that it was the only ministry that reported no expenditures in the first half of 2020. For the period from 2017 to 2021, only €32.5 million was reported, and these figures are incomplete because relevant contracts were still under review at that time.

Other ministries

Federal Ministry for Economic Affairs and Climate Action (BMWK)

• December 2021 – April 2023: 16.5 million euros for external legal advice

Federal Ministry of Labour and Social Affairs (BMAS)

• 2020: 0.7 million euros
• 2017-2021: 2.5 million euros

Federal Chancellery

• 2017-2021: 3.3 million euros

Chronology of the increase: Overall development of consulting expenditures by the Federal Government(s)

The chronology of the increase in the German government's consulting expenditures reveals a worrying trend in overall spending. From a starting point of €32.1 million in 2014, costs initially rose moderately to €38.2 million in 2015, representing an increase of 19 percent. However, 2016 marked a dramatic turning point with an explosive increase to €101.1 million – a remarkable 165 percent rise compared to the previous year.

This upward spiral continued steadily in the following years: in 2017, expenditures reached €145.5 million (an increase of 44 percent), and in 2018 they rose further to €181.4 million (an increase of 25 percent). Consulting costs reached their absolute peak in 2019 at €296.7 million, representing another drastic increase of 64 percent.

In 2020, expenditures declined significantly to €172.2 million due to a redefinition, representing a decrease of 42 percent. However, this decline proved temporary, as costs rose again to €209.2 million in 2021 (an increase of 21 percent). After a brief dip to €185.5 million in 2022 (a decrease of 11 percent), consulting expenditures reached €239.2 million again in 2023, an increase of 29 percent.

Billions of dollars over the years

The total amount is particularly alarming: Between 2017 and 2021 alone, the German government spent more than €1.073 billion on external consultants. Over the last ten years, these expenditures have totaled more than €1.6 billion.

Problematic developments and points of criticism

Changing the definition as a smokescreen tactic

A particularly critical aspect is the change in the definition of "consulting services" in 2020. This led to an apparent reduction in expenditures of over 40 percent, even though the actual number of consultants employed was no less. In response to parliamentary inquiries, the German Federal Government stated that consulting costs for 2020 amounted to €433.5 million, while the official consultant report showed only €172 million – a difference of more than €260 million.

Growing dependency

It is estimated that around 2,600 consultants work for the German federal government every day. If they had their own ministry, it would be one of the largest in Germany in terms of personnel. As early as 2020, the Budget Committee expressed concern that the federal administration could become too dependent on external consultants and thereby lose its own expertise.

Lack of transparency

The majority of consulting contracts remain opaque, as the consulting firms must consent to publication. This significantly hinders parliamentary oversight and public accountability.

Taxpayer money for external consulting: Federal government ignores demands from the Budget Committee.

The German government's consulting expenditures have increased eightfold over the past ten years, rising from €32.1 million to almost €240 million. Despite repeated demands from the Budget Committee to "substantially reduce" the use of consultants, the government has failed to achieve a sustainable reduction. In 2023, expenditures even reached their second-highest levels since records began. This development raises fundamental questions about the efficiency of the federal administration and the responsible use of taxpayers' money.

The redefinition of consulting services: A accounting trick to conceal rising consulting costs.

The so-called “redefinition of consulting services” from 2020 represents one of the most controversial aspects in the debate surrounding the German government's exploding consulting costs. This seemingly technical change in terminology turned out to be a clever accounting trick to defuse political pressure and obscure the actual expenditure on external consulting.

What did the redefinition mean in concrete terms?

Until the 2019 reporting year, the annual consultant reports were based on a definition provided by the Federal Ministry of Finance (BMF), which had remained largely unchanged since the reporting began in 2007. The original definition encompassed external consulting services as "a paid service that serves the purpose of developing and evaluating practical recommendations for action in specific decision-making situations of the client."

In 2021, the Budget Committee decided that the consultant report should be based on a revised definition of the term "consultant," retroactive to 2020. The new definition was ostensibly intended to "improve the transparency of the reporting" and now also includes support services "characterized by significant consulting services and thus potential external influences."

The crucial point: Certain IT services, however, are explicitly no longer considered external consulting. Specifically, “operational IT services for the development of IT (specialized) processes or for the provision of capacity and expertise” are no longer subject to reporting requirements.

The political background of the redefinition

Pressure from the Budget Committee

The redefinition did not occur in a vacuum, but rather as a direct response to massive political pressure. As early as 2020, the Budget Committee of the German Bundestag had demanded that the Federal Government take steps "to substantially reduce the use of external consultants and external support staff." This demand was formalized in a so-called directive, which is binding for the ministries.

Scholz's refusal to genuinely reduce costs

Particularly revealing is the stance of the then Federal Finance Minister Olaf Scholz. In response to a request for a report from Green Party politician Sven-Christian Kindler, the Finance Ministry stated as early as the end of November 2020 that there were "no plans" to reduce the number of consulting contracts. Scholz also deemed an evaluation of the previous use of external experts unnecessary.

Scholz defended the use of the expensive consultants at length, arguing that external consultants were only used when the necessary expertise for individual projects was not available among the thousands of civil servants in the federal government.

The arithmetic trick and its dramatic consequences

The numbers speak for themselves.

The effects of the redefinition were both dramatic and revealing. The apparent cost reduction from 2019 to 2020 was not based on genuinely reduced expenditures, but on a “simple trick: The federal government changed the definition of what counts as a consulting service”.

The scale of this mathematical trick becomes clear from the following figures:

• According to the official consultant report: 172 million euros for 2020
• According to a parliamentary inquiry, the figure for the same year was 433.5 million euros.
• Difference: More than 260 million euros were concealed.

Systematic exclusion of costly areas

Particularly insidious was the deliberate exclusion of the IT sector from reporting requirements. IT projects, expert opinions, studies, and much more are no longer considered consulting services, but rather "implementation services." This is especially cynical, given that IT and digitalization projects represent a significant portion of consultants' expenditures.

The Federal Ministry of Finance openly admitted the obfuscation: The significant reduction in the listed expenditures was “largely” due to the new definition.

Impact on parliamentary control

Impediments to democratic control

The change in definition had drastic consequences for parliamentary oversight. Sven-Christian Kindler, who served on the Budget Committee for the Green Party for 15 years, criticized: “The change in definition allows the federal government to continue to evade transparency regarding expenditures on external consulting services.”

The practical implications are significant: “What isn’t in the reports, we now have to obtain through other means, such as parliamentary inquiries. This means considerably more work for us.” This significantly hinders the parliament’s democratic oversight function.

Loss of comparability

The retroactive application of the new definition from 2020 also destroyed the comparability of the figures over the years. With the new definition, expenditures in budget line 06 (Federal Ministry of the Interior) fell "by more than two-thirds, from €154.3 million in 2019 to €50.1 million in the following year," just like the total reported expenditures.

Assessment: A numbers game instead of real reform

Obfuscation instead of transparency

The analysis of the available documents and statements clearly shows that the redefinition of consulting services was primarily used as a smokescreen. Instead of implementing the required "substantial" reduction in dependence on consultants, the federal government under Finance Minister Scholz chose the path of a numbers broker.

The Federal Court of Auditors sharply criticized this development and warned of a lack of transparency in the use of consultants. In an internal audit report, the auditors of the Federal Court of Auditors conveyed their criticism of the planned regulation to the Budget Committee, stating that they were not convinced by "any of the exceptions to the reporting requirement cited by the Ministry of Finance."

Continuation of the problematic development

The figures after 2020 demonstrate that the redefinition did not change the fundamental problem. Since 2020, expenditures (according to the new definition) have risen again by 39 percent to almost 240 million euros in 2023. This shows that the redefinition was merely a cosmetic correction to alleviate political pressure.

Federal government deceives the public: How consulting fees are concealed through accounting tricks

The 2020 “redefinition of consulting services” was a transparent attempt to conceal the German government’s exploding dependence on consultants. Instead of implementing genuine reforms and substantially reducing consulting costs, as demanded by the Budget Committee, the government chose the path of accounting trickery.

This accounting trick not only undermined parliamentary oversight but also misled the public about the true extent of the government's reliance on consultants. The fact that, despite the alleged "reduction," approximately 2,600 consultants work for the federal government every day exposes the redefinition for what it is: a smokescreen at the expense of democratic transparency and the responsible use of taxpayers' money.

The analysis shows that the exploding costs are not due to individual cases, but to structural deficits in public administration and in procurement. Ministeries, especially the Federal Ministry of the Interior (BMI) and the Federal Ministry of Finance (BMF), are increasingly stored by core tasks, especially in the strategically critical IT sector. This happens despite years of having an urgent, urgent and largely ignored warnings from the Federal Audit Office, which sees the "integrity of the administration" in danger.

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• State trapped by consultants – How global consulting giants control German administration

The German federal government faces a serious problem that affects both taxpayers and the integrity of the administration: the uncontrolled dependence on external consulting companies. In its most recent report, the Federal Audit Office has had a clear criticism of the lack of strategy of the government to reduce this costly dependency. The numbers speak a clear language and reveal the extent of this problematic development.

This development is all the more worrying when the Bundestag's budget committee had already called for a substantial reduction in consultant costs in 2020. However, the Federal Government has not fulfilled these claims, as the Federal Audit Office unequivocally determines. Instead, the government's annual advisory reports show little willingness to make changes in the use of external consultants.

The structural weaknesses of the current approach

• Lack of strategic planning
• Hanging up administrative integrity
• Quality problems and copy paste advice

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• The innovative alternative proposal: partnership with SME interest representatives

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