diff --git a/pkg/controllers/deprovisioning/controller.go b/pkg/controllers/deprovisioning/controller.go
index f5be95099a..cb76bc42ee 100644
--- a/pkg/controllers/deprovisioning/controller.go
+++ b/pkg/controllers/deprovisioning/controller.go
@@ -106,6 +106,7 @@ func (c *Controller) Builder(_ context.Context, m manager.Manager) controller.Bu
 
 func (c *Controller) Reconcile(ctx context.Context, _ reconcile.Request) (reconcile.Result, error) {
 	// Attempt different deprovisioning methods. We'll only let one method perform an action
+	isConsolidated := c.cluster.Consolidated()
 	for _, d := range c.deprovisioners {
 		candidates, err := candidateNodes(ctx, c.cluster, c.kubeClient, c.clock, c.cloudProvider, d.ShouldDeprovision)
 		if err != nil {
@@ -135,8 +136,11 @@ func (c *Controller) Reconcile(ctx context.Context, _ reconcile.Request) (reconc
 		return reconcile.Result{Requeue: true}, nil
 	}
 
+	if !isConsolidated {
+		// Mark cluster as consolidated, only if the deprovisioners ran and were not able to perform any work.
+		c.cluster.SetConsolidated(true)
+	}
 	// All deprovisioners did nothing, so return nothing to do
-	c.cluster.SetConsolidated(true) // Mark cluster as consolidated
 	return reconcile.Result{RequeueAfter: pollingPeriod}, nil
 }
 
diff --git a/pkg/controllers/deprovisioning/suite_test.go b/pkg/controllers/deprovisioning/suite_test.go
index 5b2cad9106..b9af38bd8c 100644
--- a/pkg/controllers/deprovisioning/suite_test.go
+++ b/pkg/controllers/deprovisioning/suite_test.go
@@ -134,6 +134,26 @@ var _ = AfterEach(func() {
 	}
 })
 
+var _ = Describe("Consolidation State", func() {
+	It("should not reset consolidation state if consolidation hasn't run", func() {
+		// this assumes that the consolidate reset period is 5 minutes, which it is currently
+		_, err := deprovisioningController.Reconcile(ctx, reconcile.Request{})
+		Expect(err).ToNot(HaveOccurred())
+		Expect(cluster.Consolidated()).To(BeTrue())
+		fakeClock.Step(1 * time.Minute)
+		Expect(cluster.Consolidated()).To(BeTrue())
+
+		// reconciling now shouldn't set the last consolidated time to current time, as consolidation isn't actually
+		// running since it last ran 1 minute ago
+		_, err = deprovisioningController.Reconcile(ctx, reconcile.Request{})
+		Expect(err).ToNot(HaveOccurred())
+		// but advancing the clock 4:30, so we are at 5:30 past the last run time should cause consolidated to return
+		// false
+		fakeClock.Step(4*time.Minute + 30*time.Second)
+		Expect(cluster.Consolidated()).To(BeFalse())
+	})
+})
+
 var _ = Describe("Pod Eviction Cost", func() {
 	const standardPodCost = 1.0
 	It("should have a standard disruptionCost for a pod with no priority or disruptionCost specified", func() {