If the Albanese government is serious about better regulation and more transparency around the use of consultants in the public sector, it could do worse than mandate much greater detail about what consultants are actually used for.
The main tool for scrutiny of government contracts, including the use of consultants, for the Commonwealth is the AusTender site, where millions of public sector contracts are recorded. But while some basic information is recorded — like the agency letting a contract, the contractor, the start date and the value — it depends heavily on the willingness of agencies to specify why they’ve employed a contractor or consultant.
Some agencies spell out what the contractor will provide — auditing services, IT support, strategic planning, research, business support etc — but many prefer to provide as little information as possible.
Take the Australian Prudential Regulation Authority (APRA), guardian of our financial system. APRA is all about transparency for financial products and services but avoids it like the plague when reporting on its use of contractors. Last December, APRA handed PwC a $150,000 contract for a three-month job. For what? “Consultancy Review”. Right near the end of that contract, it handed PwC another $150,000. For what? This time APRA was even more succinct: “Review”. Of what? Who knows.
APRA is not the only offender. Defence, which hands out more than 100,000 contracts a year, is often equally unforthcoming. Last year it gave PwC more than $1.6 million, for “Capability Views”, which sounds like a new defence housing estate near a golf course. Dig a little deeper and you find out it was related to “the provision of services to support the acquisition and sustainment of defence’s (Air, Joint Systems, Land and Maritime) capital equipment and systems projects”, which doesn’t really narrow it down much.
Greater detail about how consultants are being used would enable us to get a greater sense of the extraordinary hold the private sector has on the public service, and the remarkable range of consulting activities that have been outsourced to large firms like the big 3.5, from bog standard audit and financial management support to IT, communications and PR, training, governance, leadership management, planning, workforce management and generic “management advisory services”.
Because while large consulting and audit firms get rich from huge contracts, they also make a motza from smaller contracts delivering things the public service used to do for itself, or which can be achieved without expensive outsourcing options. For example, last year the Department of Agriculture gave $133,000 to PwC. Rather than the usual consulting services, it was for a “Desktop Scheduler for Scheduling Activities” (unlike desktop schedulers used for other purposes, presumably). Perhaps using Gmail didn’t appeal.
In 2019, defence — which appears unable to go to the toilet without hiring consultants (usually KPMG) to scope, plan, cost, assess, evaluate and, perhaps, overcharge for the exercise — gave PWC $27,500 — not for the usual consulting or audit services, but for a cartoon (of what, we don’t know). Sorry, make that an “animated video creation”.
Indeed, it seems that endlessly recycling PowerPoint presentations telling governments what they want to hear has led to the development of extensive graphics skills within the big 3.5: Deloitte has done infographics for corporate regulator ASIC and KPMG has done graphics for its forever-client defence.
KPMG has also received nearly $400,000 from defence to design its graduate program — something that nearly every other department manages to do without hitting up consultants, reflecting that recruiting and training the next generation of managers is core business for any enterprise. But that seems to be part of defence’s long-running enthusiasm for handing large amounts of money to KPMG to train its staff in public service basics: the firm received more than $2.5 million from 2016-18 for “Delivery of leadership training for the Enabling Group’s executive level staff-“Leading for Ref” (sic — good luck deciphering that).
The beauty of such a role for a major consulting firm of course is that it gives it the chance to inculcate in the public service leaders the need to continue using consultants.
This produces one of the more ironic examples of outsourcing: defence turning to PwC to educate its staff about governance. In 2021, PwC, having used leaked tax information to flog tax-dodging scams to multinationals, cover it up and misuse legal professional privilege, was also getting $250,000 from defence to educate its staff in a “Governance Improvement Program”.
Bureaucrats even tasked PwC with telling them how Anzac Day should be commemorated. In 2018, the Department of Veterans’ Affairs gave the firm $200,000 to “deliver an evaluation of the Centenary of Anzac Program and facilitate the development of a strategic plan to guide future commemorative activities”.
No wonder public sector agencies prefer to keep the detail of their use of consultants as restricted as possible. To do otherwise would be to admit an addiction — one that big firms profit from immensely.
Does the use of consultancy firms need an overhaul? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
Back when a manager with a large public utility, I had a range of contacts with consultants: both as the engager for some services and, at other times, as part of some exercise for which the wider corporation was their client. One quickly learnt to be skeptical of some of the talents and insights they offered, as also which Office of firms like PwC one engaged. Even with a world-renowned firm like McKinsey & C the variability in their consultants’ talents was evident even if their international “macro” approach and insights proved valuable. On smaller / grunt issues this variability was very evident: so much so I effectively terminated a contract agreed between my firm’s CEO and the McKinsey head honcho in Australia. I did that by making it clear the profit centre I led would not pay for services not rendered (nor needed … but that is another story).
Later, as an independent consultant and locum executive – working across both private and public enterprises – one saw some thoughtful consultancies but many that were just a waste of money. Waste for one of two reasons: either / or because not needed and, two, consultants not upto the task.
Might I suggest one easy initiative to assist rebuilding the public service is to ensure that all in the middle and upper echelons are professionally qualified to hold positions leading and accepting accountability in their area of functional expertise. This does not mean that at some point a senior engineer or human resource executive cannot be the marketing or finance Head but that they will be assigned such roles as part of some wider development and learning from being the Head of Engineer or Head, Human Resources. Far too many senior public servants seem not to be savvy, well regarded, highly qualified or experienced in what might be seen as their reputational level of professional expertise. Oh, and by the way to move into the top echelons of the public service one has to build a reputation as a “policy wonk” not as having actually delivered a program or initiative. Measuring a policy officer’s outputs and contributions is but ethereal mumbo-jumbo whereas actually leading, managing and delivering (on time and budget) a billion-dollar program should be more important.
Agree 100% … those particular managers/generalists who assert you don’t need technical/subject specific skills to manage. Then buying external expertise so their shallow knowledge is not exposed.
Not just public serice. Universities that cry “poor” spend millions on consultants. Consultants come and take notes from university staff. In one ludicrous case I saw first hand they recommended getting rid of a valuable but realtively inexpensive long term staffer. The replacement suggested was a consultant whose hourly rate was more than the weekly cost of the FT staff, and didn’t have the first clue about how to do the job.
I no longer donate to medical research in Australia because of the phenomenal wastage I’ve seen in this sector.
Yep gaslighting
I’ve just applied for the Commonwealth Seniors Health Card. I am reasonably computer literate and I am certainly word literate but this process just defies description. In the end, it took two trips to my local Services Australia office where the chap went through my application, uploaded some documents I had brought in and said it would take a day or two for it to go through the system. So three days later I continued my suspended application to find all of the documents marked as still required. So I went back to Services Australia and asked the same chap why my application showed it was still waiting for the documents. He had a look at the screen and said, don’t worry, they’ve gone through. Back at home, my screen still shows they haven’t but I’m not worrying because he assured me the concession card would arrive in the mail in a few days.
I tried to describe to him the difficulties in applying on line, to which he replied “Yeah, we used to do all this in-house but now it’s all outsourced and doesn’t work properly any more”. As a former public servant with a 27 year career, I knew what he meant.
I keep thinking how dispiriting if must be for public servants watching the outsourcing of so much work they are quite capable of doing themselves. And how incompetent must management be to not maintain capacity in their staff to simply do what needs doing
It’s not incompetence.
The PS is being (well, mostly has been at this point) deliberately de-skilled.
All credit to Tony Abbott who super-charged John Howard’s attack on Australia’s Public Service. We now have the Oz government as the host, the big four consultancies as the parasites. The government requires a strong dose of a bitter deterrent in order for the parasites to drop off. But what?
big 4 ? More like big 7 or 8 and all the subsidiaries and third party consultant and start ups
Concrete boots.
Not even original, see Frank’s (2008) ‘The Wrecking Crew’* and it’s not just about privatising, but even better, consultants spending the target PS entity’s budget and making unfit for service delivery….
*’intentionally dismantled the government by many means, including turning public policy into a private-sector feeding frenzy.’
The big consulting firms’ consulting staff are highly skilled in flattery and keeping their clients happy, doing whatever they want, no matter how useless the task. They endorse what their careerist senior public service clients want or believe they need, supporting their desires and planting ideas for more contracts, no matter how destructive to the department or its people, let alone the public. They’re great at spin and convincing clients that they’re wonderful, being happy to do and say whatever is necessary to bring in more money.
Consultants in these big firms are valued by their employers for the amount of revenue they bring in, nothing else. The quality of their work is irrelevant, as long as there is no dissatisfaction by the person who signs off on the contract and payment. Most advice is outdated and not scientifically valid, but who cares, if it pleases the paymaster? And yes, I have worked with such firms.
In my experience the employees of the consulting firms are chosen for these qualities, often through an old-boys network.