It depends on what the state of play is when you're nearer your contract end.
Lots of govt depts are taking on fixed term people as there's so much uncertainty about the effect Brexit will have that it's impossible to predict resourcing requirements.
In my old department they did it for that reason, and they are able to make them permanent after the year if the jobs are there. Also the work processes are changing in such a way that it will probably impact on resourcing. They will only keep on the ones they feel are doing the role well though.