Public Sector

Central Government

Restructuring Activity: Very high

Central Government

Financial pressures across the public sector remain high, as persistent inflation and  increased borrowing costs impact the public purse.

Policies enacted to support the economy through the COVID-19 pandemic and the  energy price spike have resulted in a significant increase in public sector borrowing as a proportion of GDP, reaching over 100% in recent quarters. 

One byproduct of weaker public finances have been some notable cutbacks in some capital infrastructure projects. Adjustments to the High Speed 2 (HS2) train project, cancellation of proposed road improvements and postponed redevelopment of NHS hospital sites are just a few in the headlines in recent months. This reduction in investment will have a knock-on impact on sectors reliant upon government spending, such as heavy infrastructure, construction, and specialist supply chains.

We're also seeing increased financial challenges across many local authorities, many of which have seen their debt level increase materially in recent years. This is likely to prove a challenge to both local and national government, as increased interest payments become unsustainable.

Despite these challenges, public spending remains a key driver for the wider economy. Increased investment in, for example, 'net zero'-related initiatives will continue to help activate private-sector investment.

Restructuring activity in Central Government

Defra Spending Review - Estates Strategy and Business Cases

Interpath has supported Defra Group Property (DgP) since 2018 developing a robust estates strategy, leading the DgP’s spending review submission. Interpath worked with management to produce robust, evidence backed, multi-billion pound Green Book compliant business cases and Spending Review bids for submission to and approval by HM Treasury – recently including c£200m investment justified and negotiated with HM Treasury.*


Probation service in-housing

Interpath worked with the organisation in developing a robust plan to bring in-house part of the probation services whilst running a procurement for second-generation contracts for the remaining services. We supported management developing a successful transition strategy for the separation and integration of CRC services into HMPPS.*

*Some of the case studies referenced were performed by Interpath team members as part of a multi-disciplinary engagement team whilst part of KPMG LLP. Interpath Advisory, formerly KPMG UK’s restructuring and turnaround practice, launched as an independent business on 4 May 2021. Click here for more information.

Find Your Expert

Craig Masters is Head of Public Sector Cluster, which includes Central Government as one of four core segments. Stewart Maxwell leads our approach to the Central Government sector nationally. For a full list of our senior people with experience in this sector use the button below.

Our senior team