A new report has shone a light on the extent of consultant reliance in NSW, with a new report released by Labor suggesting consultants were hired by the former government at a rate of one engagement every hour for five years.
The research report, which will be tabled in Parliament next week, reveals that 10,006 consultant contracts had been issued by the Liberal-National Coalition government in their last five years in office (2017-18 and 2021-22).
Nine of the top 15 contracts for internal organisational operations and management services were awarded to Big 4 consultancy firms KPMG, Deloitte, EY and PwC.
NSW Treasurer Daniel Mookhey and Finance Minister Courtney Houssos issued a statement on Monday describing the report findings as an example of “waste and mismanagement”.
Under Labor, they added, an election commitment to curb consultant spending by $35 million a year was on target to be met.
“It’s Labor that has been left to clean up their mess and repair the budget, a task made all the more difficult by the profligate spending from the previous Liberal-National government,” Houssos said.
NSW Labor says it has now given government agencies “tight controls and clear instructions” to bring costs under control in the retention of consultants.
In the aftermath of the national scandals involving PwC and other consultancies, the NSW government was moved to implement additional probity measures in the last 18 months.
Among the reforms are ‘betrayal of trust’ fines for any person or entity information that has been obtained from confidential tax discussions with the government. Penalties for the offence exceed $1.1 million for individuals and $5.5 million for corporations.
Ahead of next month’s state budget, Mookhey and Houssos have also indicated further measures to reduce over-reliance on consultants and rebuild the NSW public sector are being considered.
“Given the scale of the previous Liberal government’s waste, it will take time to unwind,” Houssos said.
“The cost controls and probity measures we have put in place were a necessary step that should have been taken years ago by the previous government.”
Other report insights show that in the last five years of the NSW Coalition government, so-called ‘generalist work’, including policy design, program evaluation, strategy development and business case development was outsourced in more than 1,523 contracts (15%) totalling $196.7 million.
The report found use of existing government resources could have halved the cost of some projects, and that at least 87% of spending on external consultants in 2021-22 was with private suppliers, while only 2% of spend was with universities.
The treasurer said Labor was committed to building a better public service by investing in the government’s own essential workforce.
“We’d rather invest more into the essential services that communities rely on and pay external consultants less. A lot of these core functions can and will be done by a strong public service,” Mookhey said.
“This is a key part of the government’s ongoing work to clean up the waste we inherited.”
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