An in-house consulting unit will be established within the federal government to provide professional services to agencies, reducing the reliance on external consultants, while contractors will be used “only when suitable and required”.
Finance and Public Service Minister Katy Gallagher revealed plans for the in-house consulting model in a speech to the Institute of Public Administration Australia on Thursday, as the government tries to rebuild “core capabilities and functions”.
“We know that there is deep expertise across the Australian Public Service for functions like this. Like data analytics and evaluation, customer service and event management, foreign policy, geoscience, or curating priceless historical collections,” she said.
“An in-house consulting model will give public servants the opportunity to develop expertise, further build relationships, collaborate with colleagues, and challenge themselves in new ways.
“It can create opportunities to work across departments to support one APS.”
Work has already started “on a model for the government to consider by the end of the year”, having been recommended in last year’s Senate inquiry into the current capability of the Australian Public Service (APS).
The model is part of a larger APS reform agenda now being pursued by the government to “repair years of neglect suffered by… public institutions”, which Senator Gallagher describes as “no small task”.
“Outsourcing, poor resourcing, clunky systems, and a decade of deliberate devaluing of the APS has meant that the Australian people are looking at our institutions with a more jaundiced eye,” she said.
Senator Gallagher, who plans to cut spending on contractors and consultants by $3 billion over four years, said “too many resources” were flowing to “contractors, consultants and labour hire firms, decimating functions that should sit at the heart of a strong public service”.
“In some departments, the public service became more like an administrative service to ministers, with core work like policy development being shipped out to consultants,” she said of the previous government.
“There was the public downplaying of policy development. The devaluing or disposal of years of experience and knowledge. And a casualisation of the work. A lack of interest in investing, nurturing, planning of the public service as an institution in itself.”
The big four consultancies plus Accenture reportedly scored a record $2 billion in work from the government last financial year, with Accenture topping the chart for the total value of contracts secured. In 2018-19, the government spent $1.2 billion with eight consulting firms.
Recent analysis by InnovationAus.com shows the government spent more than a million dollars a day with KPMG last financial year, while PwC was paid more than $312 million for work over the period.
Minister Gallagher said the government’s reform agenda would seek to build on the “largely mothballed” 2019 Thodey Review, with work already underway on an APS employment audit to understand the use of temporary employment, contracting and consulting.
The government also plans to resurrect independent capability reviews, which will be used to identify “what capability is needed for emerging work and challenges” and “encourage innovation, change and systems that support the best delivery of service”.
“It was unsurprising to me that in coming into government there was no centrally held data on this information. That work [on an APS employment audit] will be completed in early 2023,” she said on Thursday.
“It’s clear that in an attempt to sidestep a failed policy of Average Staffing Level capping, much of the interesting or challenging work and projects has been outsourced to consultants.
“Core APS work should be a chance to grow skills, enhance job satisfaction and tap into the knowledge that already exists within the service.
“We want to create secure jobs in the APS and utilise contractors and labour hire only when suitable and when required.
“And as we reduce these forms of employment, over time we will create permanent, meaningful jobs and rebuild that much needed in-house capability.”
Minister Gallagher has also foreshadowed future reform initiatives in “key areas such as digital and data which deserve an address on their own, but for which time does not allow me to properly delve into today”.
But I can assure you with the Reform Office, the Digital Transformation Agency and the APSC I am looking closely at opportunities here that align with our reform agenda,” she said.
The Community and Public Sector Union (CPSU) welcomed the move to “shift away from a current over-reliance on outsourced consultancy work”, which comes at a “huge cost to the taxpayer” and “fundamentally undermines the capacity of the APS”.
“For far too long we have seen the government outsource the same sort of work time and time again, rather than utilising the APS and the huge skillset that already exists within it,” CPSU national secretary Melissa Donnelly.
“It is immensely frustrating for talented and capable public servants to have work they could be doing and work they want to be doing, being outsourced right before their eyes.
“There will be detail to work through but what we do know is that there is capacity across the APS to do this work in-house and rebuild the skills and expertise of the public sector as we go about doing that.”
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