In its first federal budget in nearly a decade, the new Labor government forecast $3.6 billion in savings over four years through reduced spending on external labour, advertising, travel, and legal expenses.
In Opposition, Ms Gallagher had raised concerns about the Coalition’s “privatisation-by-stealth tactics” through soaring spending on consultants she said was straining the budget and undermining internal capability.
Part of Labor’s solution — and recommended in last year’s Senate inquiry into the current capability of the Australian Public Service (APS) — is to set up an in-house consultancy to save money and build internal capability.
It follows other national governments’ encouraging results, including the UK Government Consulting Hub. Launched last year, the UK Hub now bids for otherwise outsourced government work, reviews contracts, and coordinates and trains other civil servants.
According to the UK Hub, it has delivered over 22 consultancy assignments and demand for its services is “high and growing”. Each of the assignment’s has delivered a saving compared to external consultancy fees, while building “enduring capability and knowledge uplift for the Civil Service”.
Ms Gallagher said there’s “a lot of interest” in what’s being done overseas.
“We want to have a have a look at that,” she told Estimates, “But it’s not looking to replace the use of consultants. [Rather it will] augment and provide a specific purpose where it can, but that’s in its early days.”
Officials told the hearing an Australian model would have functions of networking existing expertise within the APS, providing contract support and as a separate team working on particular issues.
Before an in-house consultancy is established the Department of Finance will complete an employment audit to determine the baseline of the APS workforce, including external contractors.
The audit, due to be completed early next year, is expected to capture information on the split of the workforce, roles, the value of using external workers and the potential of converting them to full-time APS staff.
The Australian Public Service Commission will also develop a strategic commissioning framework to guides decisions making across the APS on building internal capability and the use of consultants and contractors.
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