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Consultants stalk public service work after audit commission report

Date

Phillip Thomson

Consultants part of a rapidly growing $14 billion-a-year outsourced industry serving government are stalking the wounded federal public service for more work. 

Latest AusTender figures show federal spending on outsourced managers and business advisors as well as administrative and human resource services grew by more than $6 billion – or 70 per cent – in the space of a year. 

A part of this are companies keen to win contracts advising the Commonwealth for the flurry of work that will follow if many of the recommendations from the National Commission of Audit – slammed by the opposition as a report for big business – are brought in to restructure the way the government operates. 

Suggested changes could mean some government agencies are privatised while others are merged or abolished – all while taking work away from public servants and pumping money into the private sector.

Companies ready to mop up any work in Canberra include KPMG.

Do you know more? Send your confidential tips to ps@canberratimes.com.au

It is advertising for more employees to increase the size of its federal government advisory team made up of professionals with a variety of skills from specialists in procurement and staff who can estimate costs for Defence purchases.

There is also the self-described world leader in business strategy, Boston Consulting Group.

Boston Consulting advised the commission on management-staff ratios, which led to a recommendation describing the Australian public service as top heavy, particularly in the executive level 1 and 2 categories and a suggestion to slim management ranks. 

The chief executive of medium-sized firm Canberra Consulting, Jason Pepper, said he was starting to employ a few more people in his small central office, which is the base for 100 workers contracted to government. 

"In the commission of audit I see a lot of opportunities for us," said Mr Pepper, whose business deals with jobs worth between $1 million and $10 million.

Colliers International's Canberra-based director of valuation, Matthew Curtis, said Colliers had been in talks with the federal government about potential work pricing Commonwealth property that could be sold and the leasing of office space while departments were consolidating. 

The company had also picked up a small amount of work following the closure of the Australian Valuation Office. 

Canberra-based managing director of Protiviti, Mark Harrison, said his firm in the ACT had increased in size by 16 per cent to 30 staff and expected more growth while austerity measures carved away thousands of public service jobs. 

“In this environment, every federal department and agency is expected to deliver similar outcomes with less, and to work smarter," Mr Harrison said.  

"Departments do not always have the right combination of management cost accounting and business administration skills in-house to pull off a successful downsizing. Consulting firms are being brought in to fill these gaps.

“Departments need to understand whether the savings they are being asked to achieve are deliverable and what business processes need to change as a result of their cost-cutting.

"These matters will be top of mind for any department or agency head as we move into an era of smaller government.

"There will be big changes, but department heads and their finance managers should view this as an opportunity to streamline their operations and to identify and improve efficiencies."

28 comments so far

  • The vultures have circled, landed and are ripping millions in consultancy fees and are setting there businesses to reap a fortune from the government. Naturally they will advise to send the work there way. Yes, Labour is right. The consultancies are Liberal party mates that stand to make a fortune doing the work traditionally done by public servants for a fraction of the cost. I have never liked consultants. Most get paid thousands of dollars a day and do this for years. It is time that they were put in their place. Time to get rid of the tired, old political parties and have a government that works for the people not their mates.

    Commenter
    C of Southside
    Date and time
    May 06, 2014, 7:05AM
    • "work traditionally done by public servants for a fraction of the cost"? Who are you trying to kid?
      Sure, the wages might be higher, but the public sector move many times slower than private sector.
      Give the same job to the APS and they will still be filling in procurement forms 10 years from now, with no real movement.

      Commenter
      dhv
      Location
      The real world
      Date and time
      May 06, 2014, 7:59AM
    • Not just that, a PS has the taxpayer on the hook for 30 odd years of work 15% super, sick pay, holiday, study leave, and so on and so forth.
      A consultant is employed for a specific task or project, then they are gone, no ongoing liability for the tax payer, job done.

      Commenter
      lifestyle
      Date and time
      May 06, 2014, 9:05AM
    • in case you didn't know "lifestyle", PS staff are taxpayers as well so in affect they are paying part of their own salary. do you?

      Commenter
      redundant excess
      Date and time
      May 06, 2014, 11:14AM
    • Outsourcing to consultants/contractors is an excellent way to "reduce" PS headcount. Quit PS, take a golden handshake, doing the same job as a consultant and earn 2x more. I've managed consultants from tier 1 firms and I second your argument lots of work can be done by PS employees at much lower costs. However do you think the PM and his agency heads will walk around the office, observe and understand this? Absolutely not.

      Commenter
      Invisigoth
      Date and time
      May 06, 2014, 11:53AM
    • DHV. If they did the job properly that would be true...but often...almost always it is in their commercial interests to leave jobs uncompleted and to actively "white ant" any competent staff that might bring sanity to a contract. the damage done is *very* expensive.
      "No ongoing liability" is exactly the problem! Most complex problems in IT absolutely require a longer term vision to manage the technology throughout it's lifecycle and to avoid short term hype. Consultants use "sexy" tech regardless of longevity, favour inefficient languages and processes so as to maximise project duration, size and complexity...there is no incentive to do it properly as you will get shredded at "performance assessment" time!
      A famous consultancy was caught red handed auditing their own dodgy accounting. Result? Change of brand, ongoing scamming. A certain billing project went for decades, never worked properly and was hideously designed compared to the "old" technology (that worked)...this same company has not been called out on their scam...nor have the many failed "BI" projects and "DW" projects that were simply scams.
      Work = Expertise * effort....changing this to Work=expertise*effort-(profit*3) is just bloody silly...but very profitable which is why the Lib lobbyists love it so much. Screw the public, screw professionalism...get in the "game" of boys clubs and dodgy deals.
      Banana republic? I wish! Ship of fools more like it!

      Commenter
      Andy
      Location
      Melb
      Date and time
      May 06, 2014, 12:11PM
    • @lifestyle it is also worth noting that offering good employment terms is a smart APS strategy to lure top workers from the private sector - at far less actual salary. I am in this group. I left private legal practice to work in the A PS . A key factor for me was better conditions . The trade off was less pay. l have young children So For Me the trade off has been worth it . But the APS will not be able to attract talent if it cant offer good conditions .

      Commenter
      rochelle
      Date and time
      May 09, 2014, 8:56AM
  • No doubt this will be very profitable. Consultants love "cost cutting". As senior management circle the wagons and cut actual workers, reduced staff budgets are more than compensated by the rise in operational budgets and full-time staff are replaced with contractors.
    Less expertise means consultants, who excel in faking it, can rake in the millions while services suffer. Its fake productivity... Almost as bad as treating home inflation as growth!

    Commenter
    Andy
    Location
    Melb
    Date and time
    May 06, 2014, 7:27AM
    • many consultants are ex senior executives on the APS. they take a big payout, then contact their buddies in the APS for "consulting" work, charging the taxpayer more than they would if they were still employed in the APS.

      Commenter
      redundant excess
      Date and time
      May 06, 2014, 11:15AM
  • Value for money v PS? Me thinks so

    Commenter
    value
    Date and time
    May 06, 2014, 8:00AM

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