We have an amazing gov.uk web team, they could have expanded that and built it in house with civil servants costing £60k ea per annum at the very most.

£120k, double it for stupid amounts of testing, double it again for managers to tell the people doing the work "do the work". We're still only at £500k.

Gov.uk web team are supposed to be award winning. Why are we picking shitty slop-corps to do this work?

Unfortunately because the top end of the salary is limited, to get people to work on stuff they need to bring in contractors to fill out the teams for many projects.