A Senate probe into the public service's troubled multibillion dollar tech spend has heard the government's use of private companies for IT had drained its skills and increased its costs as the number of contractors on its books exceeded 4,000.

The Community and Public Sector Union told the inquiry that the government's push to cut Australian Public Service staff and use labour hire had driven some of its contractor spend.

"CPSU believes that there is potential to find savings, and then reinvest them in the crucial task of rebuilding APS ICT capacity, and that over time this increased in-house capacity will deliver both greatly improved service standards and the prospect of further savings," the union said in a submission.

While the Digital Transformation Agency involved in agency tech upgrades said IT professionals were joining the public service through entry level roles, and that training in digital technology was under way, the CPSU said public expectations for the government's digital services had dropped with job cuts.

Public servants had also reported having to work with poor IT systems and inadequate support.

A trail of controversies has shredded the broader APS' reputation for IT, with the census debacle, the crash of the Tax Office's online systems and Centrelink's robo-debt saga culminating in the Senate inquiry into the government's tech programs.

The union urged the Coalition to set a goal to reduce its reliance on contractors, cap agency spending on them, and reinvest the savings to build APS skills.

A 2017 government report on its IT procurement found contractors cost significantly more than public servants, putting the average annual cost of an internal ICT employee at about $132,000 compared to $214,000 for a contractor.

The public service employed more than 14,000 ICT personnel in 2015-16, a third of which were contractors.

Based on those figures, the union said government spending on its IT contractors reached $385 million a year more than if it had brought those roles into its agencies.

In its report the government's ICT Procurement Taskforce said costs and the erosion to public service skills made its over-reliance on contractors unsustainable, while a 2012-13 Australian Public Service Commission report found 69 per cent of agencies reported having an overall ICT skills shortage.

The taskforce heard decision-making authority often rested with people lacking technical expertise, and that agencies were struggling with a lack of technical IT skills and "market nous" required to understand business problems, articulate requirements, and assess potential solutions on offer including their risks.

Public servants had also pointed to a lack of consultation, poor planning and management of projects, inadequate user input to system design, and regular failures to allow for user testing of new products, the CPSU said.

"Underlying these concerns is the widespread view that staff have inadequate access to information, decision-making and expertise in an environment where ICT has been heavily outsourced and contractors now comprise around a third of ICT staff."

The DTA said the government had accepted a recommendation in the ICT procurement taskforce report to develop "a medium-term strategy for building the Australian Public Service's ICT procurement capability and culture".

It was working with the APSC to design programs attracting, building and retaining digital talent, develop digital leadership skills, and create digital training standards, a spokeswoman said.

More than 2000 APS staff had finished training in best practice guidelines for building government digital services.

The public service commission said as 90 per cent of employees in the APS were ongoing in June 2017, agencies needed flexibility to use a contingent workforce for specific skills and to meet surges in demand.

"Decisions on how best to use resources to deliver the services required are made at the agency level," the commission said.

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