Govt slashes spending on big four consulting firms by $890m
Make us a preferred source
Make us a preferred source on Google
The news: The Albanese government has slashed spending on big four consulting firms by $890 million since 2021-22.
The numbers: The federal government said it has delivered $4 billion in savings from reduced spending on consultants and contractors. About 8,800 public servants are now doing the work that was formerly outsourced, they said.
The total value of contracts awarded to the big four and Accenture has decreased by almost half — dropping by $890 million since 2021-22. The number of contracts being awarded to these firms has reduced by almost 900.
The Labor government noted that the first audit of employment found that the previous government spent $20.8 billion on external labour in 2021-22.
The context: The Albanese government said it is continuing to reduce the Australian public service's overreliance on contractors and consultants and bringing core public service work back in house.
It noted that the Strategic Commissioning Framework is supporting agency heads to make decisions on what to outsource. It has also established the Australian Government Consulting, an in-house consultancy function designed to support government priorities quickly and at a lower cost than external firms, while also building public service capability.
What they said: "Since coming to government we’ve been taking steps to wind back spending on external consultants and rebuild the public service, to ensure that core public service work is done by public servants," Minister for Finance, Katy Gallagher said.
"There will always be a role for external expert advice, but we think the balance has been wrong and that’s what we’re fixing."
The source: Minister Gallagher media release
