The central contradiction: Deburocratization, advise on the profiteers of bureaucracy - the error in the system of bureaucracy reduction
Xpert pre-release
Language selection 📢
Published on: June 23, 2025 / Updated on: June 23, 2025 – Author: Konrad Wolfenstein
The central contradiction: Debureaucratization, advised by the profiteers of bureaucracy – The flaw in the system of bureaucracy reduction – Image: Xpert.Digital
Expensive Illusion: How dependence on consultants prevents real reforms
State failure through outsourcing: The paradox of German administrative modernization – When profit-oriented actors take over state tasks
The Federal Republic of Germany faces a fundamental challenge that strikes at the heart of its governing and administrative capacity. On the one hand, there is the politically proclaimed imperative of "Germany's pace"—an unprecedented acceleration of planning and approval processes to drive infrastructure modernization, the energy transition, and digital transformation. On the other hand, the reality of a state that is increasingly eroding its core competencies and becoming ever more dependent on external, profit-driven actors is becoming apparent. This development has created a "shadow bureaucracy" whose costs and influence are steadily growing.
This report analyzes the central paradox of modern German governance: the attempt to enforce efficiency through legislation while systematically outsourcing the necessary administrative and strategic capabilities. Its central thesis is that the success of any genuine reform, particularly the "acceleration of planning and approval processes," is inextricably linked to addressing the systemic problems created by this shadow bureaucracy. The report examines the critical question of whether those actors who profit from bureaucratic complexity and dependence on the state can possibly have any interest in sustainably reforming these structures. The analysis demonstrates that without a fundamental reform of the use of consultants and a massive reinvestment in the state's own expertise, the proclaimed acceleration goals risk becoming a costly illusion.
"The central contradiction of our time: those who live off bureaucracy are supposed to abolish it. They advise on streamlining – and feed off complexity. Their business model is not the solution, but the status quo.".
A fundamental conflict of interest arises when these very firms are commissioned to simplify and streamline government processes and empower public administration to become more autonomous. A truly successful debureaucratization or capacity-building project would eliminate the need for future consulting services, thereby undermining the consultants' business model. These firms profit from the complexity and "flood of bureaucracy" they are officially tasked with combating. They sell expensive solutions to problems whose perpetuation they—consciously or unconsciously—contribute to by creating new, complex management structures and eroding internal expertise.
Herein lies the crux of the problem: The business model of large strategy consultancies and auditing firms is based on acquiring long-term, complex projects. They don't just sell a one-off solution, but ideally follow-up contracts, implementation support, and lasting strategic partnerships
Suitable for:
The official narrative: The national imperative of "accelerating planning and approval processes"
The political mandate for a faster Germany
The demand for accelerated planning and approval processes has become a central pillar of current government policy. The coalition agreement sets out the ambitious goal of fundamentally reforming planning, construction, environmental, procurement, and administrative procedure law to make Germany future-proof. This political mandate stems from the widespread diagnosis of an "investment backlog." Despite available budgetary funds, Germany has struggled for years to actually utilize them, resulting in significant "investment spending surpluses" in the federal budgets.
The narrative of acceleration serves as a response to multiple national crises and challenges. It is presented as indispensable for achieving ambitious climate goals, particularly through the rapid expansion of renewable energies and the necessary grid infrastructure. Simultaneously, the modernization of the dilapidated transport infrastructure—from bridges and railways to waterways—is intended to secure and strengthen the country's economic dynamism. Acceleration is thus staged as a national effort designed to guarantee Germany's competitiveness and future viability.
The legal and administrative instruments
digitalization
A key promise is the complete digitization of all planning and approval processes. The goal is to overcome analog, paper-based processes and replace them with efficient digital workflows in order to save time and resources.
Procedural simplification
A key lever is the simplification of the procedures. The more complex "plan approval" process is to be phased out in favor of the streamlined "planning permit" process as the standard procedure. Furthermore, a uniform procedural law for infrastructure projects is to be introduced to end the fragmentation of regulations.
Specific exceptions
The regulation is particularly far-reaching for so-called replacement constructions. In the area of federal highways and railways, these should in future largely manage without lengthy planning approval procedures and environmental impact assessments, even if they involve structural expansion.
Implementation of EU law
The German Federal Government is implementing EU Directive (EU) 2021/1187 (“Optimization of the Trans-European Transport Network”). This directive stipulates that the planning approval procedure for certain strategically important projects of the Trans-European Transport Network (TEN-T) must be completed within a period of four years.
Sector-specific measures
In rail transport, the need for measures to implement the "Deutschlandtakt" (Germany-wide integrated timetable) is enshrined in law, and the decommissioning of railway lines is made more difficult in order to maintain the infrastructure. For federal highways, the Autobahn GmbH (Federal Highway Company) is to create a register of usable areas to accelerate, for example, the expansion of charging infrastructure or renewable energy sources.
A controversial vision: conflicts of interest and criticism
Environmental and climate protection concerns
Environmental organizations like the German Federation for the Environment and Nature Conservation (BUND) are issuing urgent warnings that the acceleration laws fail to differentiate between climate-friendly and climate-damaging projects. While the expansion of renewable energies is stalling, the construction of new highways would also be accelerated, which directly contradicts climate goals. The organizations also criticize the fact that the restriction of participation rights and legal recourse is undemocratic and could paradoxically lead to inferior and thus delayed projects, as errors are not identified early on.
Doubts about legal compliance
A legal opinion commissioned by the German Nature and Biodiversity Conservation Union (NABU) concludes that parts of the Planning Acceleration Act are not compliant with EU law. It is feared that this could lead not to acceleration, but to a wave of lawsuits in European courts, which could block projects for years and trigger a new "toll debacle".
Business demands
On the other hand, business and construction associations such as the Central Association of the German Construction Industry (ZDB) are calling for even more radical measures. These include the reintroduction of "material preclusion," which excludes objections in court proceedings if they have not already been raised in administrative proceedings, as well as a further restriction of the right of environmental organizations to bring class action lawsuits.
The debate reveals a lack of consensus on precisely what should be accelerated. Government policy is acting as a blunt instrument, pushing ahead with the expansion of wind turbines and highways alike, thus creating a fundamental conflict with its own climate protection commitments. Furthermore, the strategy rests on a legally risky foundation. The deliberate restriction of the right to legal recourse in the hope of faster procedures could backfire if European courts declare the laws invalid. This would jeopardize not only individual projects but the entire legal framework for accelerating planning processes, leading to systemic delays – the exact opposite of the intended goal.
A constructive alternative approach to the expensive flood of consultants of the federal government
A constructive alternative to the German government's expensive flood of consultants – Image: Xpert.Digital
The German federal government faces a serious problem that affects both taxpayers and the integrity of the administration: its uncontrolled dependence on external consulting firms. In its latest report, the Federal Court of Auditors sharply criticized the government's lack of a strategy to reduce this costly reliance. The figures speak for themselves and reveal the extent of this problematic trend.
This development is all the more worrying given that the Budget Committee of the German Bundestag had already called for a substantial reduction in consulting costs in 2020. However, the Federal Government has not complied with these demands, as the Federal Court of Auditors has unequivocally stated. Instead, the government's annual consultant reports show little willingness to change the use of external consultants.
The structural weaknesses of the current approach
- Lack of strategic planning
- Threat to administrative integrity
- Quality problems and copy-paste advice
More about it here:
From 32 to 240 million euros: The explosive development of government consulting
The Shadow Narrative: The Rise of the Advisory State
A Decade of Escalation: Quantifying Dependence
The figures from the Federal Court of Auditors (BRH) paint an alarming picture of escalating dependency. The German government's spending on external consulting and support services rose by 39% between 2020 and 2023 alone, reaching almost €240 million per year. Over the past decade, these costs have totaled more than €1.6 billion, with half of that – around €800 million – incurred in the last four years alone. This indicates exponential growth.
This phenomenon is particularly paradoxical, as the federal administration recorded a significant increase in personnel of around 50,000 positions during the same period. This increasingly calls into question the official justification for the resource shortage. The expenditures are concentrated in key ministries: In 2023, the Federal Ministry of the Interior and Community (BMI) topped the list with €59.7 million, followed by the Federal Ministry of Finance (BMF) with €38.2 million – namely, the ministries responsible for the organization of the state and its finances.
The rise of the consultative state: Quantifying dependency
Development of federal spending on external consultants (2014–2023)
The rise of the consultancy state: Quantifying dependency – Image: Xpert.Digital
The rise of the consultancy state reveals a remarkable quantification of dependence on external consulting services. In 2014, total expenditures amounted to €32.1 million. By 2017, a dramatic increase to approximately €180 million had already been recorded, continuing to around €300 million by 2019. After a decline to €172.0 million in 2020, expenditures rose again to €186.3 million in 2021. In 2022, they remained almost constant at €185.6 million, with the number of contracts being recorded for the first time – a total of 765 contracts. In 2023, expenditures reached a new peak of €239.4 million, with 816 contracts concluded.
Data for 2014-2021 are based on aggregated reports and charts; data for 2022-2023 are more precise. The figures for 2020 and 2021 reflect the new, narrower definition of consulting services.
Spending by selected ministries on external consulting (2022 vs. 2023)
Spending by selected ministries on external consulting (2022 vs. 2023) – Image: Xpert.Digital
The expenditures of selected ministries for external consulting show varying trends between 2022 and 2023. The Federal Ministry of the Interior (BMI) increased its spending from €56.9 million to €59.7 million, representing a rise of 4.9 percent. The increase was significantly higher for the Federal Ministry of Finance (BMF), which raised its consulting expenditures from €31.1 million to €38.2 million – a rise of 22.8 percent. No comparable data is available for the Federal Ministry for Digital and Economic Affairs (BMDV) or the Federal Ministry of Health (BMG).
The data illustrates the concentration of spending in central administrative and financial departments.
More about it here:
The unheard watchdog: The indictment by the Federal Court of Auditors
For years, the Federal Court of Auditors has been warning with increasing urgency about the consequences of this development, but its reports largely go unheeded.
Threat to administrative integrity
The Federal Court of Auditors (BRH) uses the strong term "endangering the integrity of the administration." If core tasks such as financial controlling in the strategic project "Federal IT Consolidation" are outsourced, the state loses control over essential decisions and becomes dependent on the interests of private companies.
Lack of strategy and transparency
Auditors repeatedly criticize the lack of a cross-departmental strategy for managing and reducing the use of consultants. The federal government's annual reports to parliament are criticized as "incomplete and vague" and demonstrate a "little willingness to change.".
Systematic ignorance
The reports of the Federal Court of Auditors (BRH) are a chronicle of institutional failure. The Finance Ministry and the Federal Government have consistently ignored the auditors' recommendations for reforming reporting and strengthening transparency.
Inadequate reporting
The reports to the Bundestag are not only late, but also of insufficient quality. In almost a third of the major contracts exceeding €50,000, the contractor's name is not mentioned, making parliamentary oversight of dependencies and conflicts of interest impossible.
The systematic disregard for warnings from Germany's highest audit authority points to a worrying state of political oversight. If the executive branch can so consistently ignore the well-founded criticism of its constitutionally enshrined oversight body, this reveals a significant weakening of the separation of powers. In this situation, the Federal Court of Auditors (BRH) increasingly acts as a "toothless tiger," whose bark is loud but has no consequences.
The Architecture of Influence: How the Consulting Market Works
The massive expansion of the consulting sector in the federal government is no accident, but the result of targeted administrative and political decisions.
The “definition trick” of 2020
A crucial step in obscuring the true extent of this dependency was the redefinition of the term "external consulting and support services" in 2020. This change, in particular, removed "operational IT services" from the reporting requirement. This led to a statistical decrease in reported expenditures of over 40%, while the actual number of consultants and the real costs, especially in the strategically important area of digitalization, became invisible to parliament. This act, criticized as a "cover-up maneuver," was a deliberate political decision to conceal the costs of the parliament's own prestige projects and to undermine democratic oversight.
The dominance of framework agreements
Access to the lucrative government consulting market is controlled through so-called framework agreements. These effectively create a closed oligopoly for a small group of global consulting giants such as McKinsey, BCG, and the "Big Four" (PwC, KPMG, EY, Deloitte). At the Federal Ministry of the Interior (BMI), almost 90% of contracts exceeding €50,000 were recently awarded via such agreements. This stifles competition and excludes smaller, often more specialized providers.
The role of intermediaries
An additional layer of opacity is created by "PD – Berater der öffentlichen Hand GmbH" (PD – Public Sector Consultants Ltd.). Although it is 100% publicly owned, it often acts as the main contractor, subcontracting the actual work to well-known private consulting firms. This obscures the direct contractual relationships and financial flows.
🎯🎯🎯 Benefit from Xpert.Digital's extensive, five-fold expertise in a comprehensive service package | BD, R&D, XR, PR & Digital Visibility Optimization
Benefit from Xpert.Digital's extensive, fivefold expertise in a comprehensive service package | R&D, XR, PR & Digital Visibility Optimization - Image: Xpert.Digital
Xpert.Digital has in-depth knowledge of various industries. This allows us to develop tailor-made strategies that are tailored precisely to the requirements and challenges of your specific market segment. By continually analyzing market trends and following industry developments, we can act with foresight and offer innovative solutions. Through the combination of experience and knowledge, we generate added value and give our customers a decisive competitive advantage.
More about it here:
Consultant oligopoly: The sell-off of state expertise to corporations
The perverse symbiosis: When reform agendas and private interests collide
A pattern of dysfunction: Costly failures and the consultant connection
A number of prominent project failures in recent years show a recurring pattern: massive costs, blatant failure, and the consistent involvement of the same large consulting firms.
The car toll debacle
The firms PwC and Roland Berger played a key role in the conception and management of the project. They provided the professional justification for a political prestige project whose legal and financial risks were ignored. The result: a compensation payment of €243 million to the terminated operators and further threatened claims.
The BMVg “consultant affair”
Allegations of cronyism and irregular contract awards at the Ministry of Defense led to a parliamentary inquiry. McKinsey and Accenture were at the center of the investigation. The appointment of former McKinsey partner Katrin Suder as State Secretary demonstrably opened doors for her former colleagues and resulted in multi-million-euro contracts whose necessity and legality were seriously questioned.
The failure of IT consolidation
This mammoth project to modernize the federal government's IT infrastructure, in which companies such as Deloitte, Capgemini, BearingPoint, and IBM participated, is a prime example of cost overruns and missed targets. At the same time, the lead agency, the Federal Ministry of the Interior (BMI), outsourced core project management and controlling tasks to external firms.
The SEFE affair (formerly Gazprom Germania)
The Boston Consulting Group (BCG) came under criticism here for awarding contracts without competitive bidding and an apparent conflict of interest after a former BCG partner was appointed to head the nationalized energy company.
The Wirecard scandal
The failure of the auditor Ernst & Young (EY) had a direct impact on the state financial regulator and the Treasury Department, which had relied on the company's audit opinions.
These cases are not isolated incidents, but symptoms of a systemic pathology. The repeated occurrence of the same companies in conjunction with the same dysfunctional patterns – opaque awarding of contracts, lack of oversight, unclear responsibilities, and enormous costs to the taxpayer – points to a structural problem, not individual errors.
The central contradiction: debureaucratization, advised by the profiteers of bureaucracy
Herein lies the crux of the problem and the direct answer to the initial question. The business model of large strategy consultancies and auditing firms is based on acquiring long-term, complex projects. They don't just sell a one-off solution, but ideally follow-up contracts, implementation support, and lasting strategic partnerships.
A fundamental conflict of interest arises when these very firms are commissioned to simplify and streamline government processes and empower public administration to become more autonomous. A truly successful debureaucratization or capacity-building project would eliminate the need for future consulting services, thereby undermining the consultants' business model. These firms profit from the complexity and "flood of bureaucracy" they are officially tasked with combating. They sell expensive solutions to problems whose perpetuation they—consciously or unconsciously—contribute to by creating new, complex management structures and eroding internal expertise.
The erosion of the state: Consequences for governmental capacity and democracy
The long-term consequences of this dependency are serious and undermine the foundations of the state.
Loss of institutional knowledge
The Federal Court of Auditors has been warning for years about this "loss of expertise." It leads to a self-reinforcing spiral of dependency: the more tasks are outsourced, the more domestic expertise diminishes, which in turn leads to even more outsourcing. The state loses its institutional memory and the ability to manage complex tasks independently.
Erosion of democratic accountability
External consultants lack democratic legitimacy and are not as committed to the common good as the administration. When they exert significant influence on political strategies and legislative proposals, accountability becomes blurred. It becomes unclear to parliament and the public whether a decision is based on the analysis of a minister or the presentation of a profit-oriented, non-accountable consultant.
Corrosion of public trust
The series of costly failures, scandals, and the apparent waste of taxpayers' money reinforces the image of an inefficient government driven by special interests. This severely undermines citizens' trust in the state's ability to act and its integrity.
In this context, the agenda of "planning acceleration" proves to be the biggest conceivable business opportunity for the consulting industry. Through legislation, policymakers are creating an urgent need for fast, digitized, and highly complex planning services, for which the state, after years of reducing its expertise, no longer possesses the necessary capacity. Thus, this acceleration policy does not merely exist alongside shadow bureaucracy—it is its primary driver of growth.
Ways to regain state capacity to act and to enable genuine reforms
The Reformers' Reform: A New Pact for Public Sector Consulting
The current problems necessitate a fundamental reform of procurement and contract management.
Revision of public procurement law
Opaque framework agreements and direct awards that cement an oligopoly must be drastically restricted. Open, competitive tenders must become the norm to give smaller and medium-sized specialized providers a fair chance and to ensure the best value for money for the taxpayer.
Radical transparency
All consulting contracts above a low threshold (e.g., €25,000) must be fully and proactively published. This must include detailed descriptions of services, the agreed deliverables, and the identification of all subcontractors involved, in order to facilitate parliamentary and public scrutiny.
Enforcement of rules on conflicts of interest
Strict "cooling-off periods" are needed for the transition of high-ranking officials and politicians to the consulting industry and vice versa, in order to effectively combat the "revolving door" policy and the associated conflicts of interest.
A “competence offensive” for the public sector
The only sustainable way out of the dependency trap is the strategic rebuilding of the state's own capabilities.
Strategic Investment Program
The federal government should launch a multi-year "Public Sector Competence Initiative." This must include massive and targeted investments in the training and professional development of personnel in strategically critical areas.
Focus on key competencies
The focus must be on expertise in managing large IT projects, digital transformation, infrastructure project planning, and strategic procurement. The goal must be to make the use of external consultants the exception, brought in only when needed for highly specialized knowledge, and not the rule for handling core tasks.
Strengthening democratic oversight
The control mechanisms of democracy must be strengthened to prevent future problems.
Strengthening the Federal Court of Auditors
The recommendations of the Federal Court of Auditors (BRH) must be given greater legal weight. Ministries that choose to ignore the recommendations should be required to provide a formal and public justification before parliament.
Improvement of parliamentary control
The Budget Committee of the Bundestag needs better and, above all, timely information from the government in order to effectively exercise its oversight function. The obfuscation tactics used in reporting must end.
Bureaucracy paradox: Those who profit from complexity are supposed to create simplification
Planning acceleration impossible: The power of the consulting lobby
The analysis unequivocally demonstrates that credible and successful "acceleration of planning and approval processes" is structurally impossible without first reducing the "shadow bureaucracy" of external consultants. The suspicion raised at the heart of the inquiry is confirmed: the fundamental conflict of interest—entrusting the very beneficiaries of bureaucratic complexity with its simplification—is the main obstacle to genuine, sustainable reforms in Germany.
The policy of "Germany's pace" threatens to become a massive economic stimulus program for a small group of global consulting firms, while the state itself becomes increasingly paralyzed. The documented failures and exploding costs are not the result of isolated errors, but rather the logical consequence of a system that shies away from transparency, weakens oversight, and fosters dependency.
True "German pace" cannot be achieved through laws alone. It requires a strong, competent, and independent state capable of defining, managing, and implementing its core tasks. Restoring this state sovereignty, administrative competence, and public trust is the indispensable foundation for the future viability of the Federal Republic of Germany.
Advice - planning - implementation
Markus Becker
I would be happy to serve as your personal advisor.
Head of Business Development
Chairman SME Connect Defense Working Group
Advice - planning - implementation
Konrad Wolfenstein
I would be happy to serve as your personal advisor.
contact me under Wolfenstein ∂ Xpert.digital
call me under +49 89 674 804 (Munich)
