The federal government should introduce caps on the amount agencies can spend on external consultants and abolish average staffing level caps in the APS, a new parliamentary inquiry report says.
The finance and public administration references committee said all strategic policy development work should be performed in-house by the APS unless there was a justified need to engage consultants.
It found there was no official dollar count on APS spending on consultants. It instead relied on Australian National Audit Office findings that $1.2 billion was spent on eight consultancies in 2018-19, stating this figure was “utterly unacceptable”.
“This preference for policy advice from private, for-profit firms that operate with an ethos vastly different to that characterised by the values of service, integrity and impartiality which define the APS, is alarming,” the committee’s report said.
Recommendations included guidelines for engaging consultants mirrored off Victorian government practices, a “consultancy hub” to provide in-house services to agencies and departments, and a cap on APS spending on consultants.
Mounting criticism of staffing caps
The committee also found caps on APS staff were “eroding workforce capability” and “not value for money” — creating an outcome of “poor service delivery”.
The findings add to a string of senate committees, including the senate committee on job security last month, and Labor and unions’ criticisms of the government’s ‘average staffing level’ cap since its introduction in 2015-16.
The committee found no certain headcount of the number of labour-hire workers in the APS, partly because the Australian Public Service Commission only collects data on staff employed under the Public Service Act.
“The committee was alarmed at not only this lack of data but also at the distinct lack of curiosity shown by agencies in regard to details surrounding their use of labour hire, including the levels of expenditure, the margins charged by providers, and the wages and conditions of workers,” the report says.
“Radical public transparency on this front is required to ensure that labour hire and other external workforce arrangements are only used when necessary and represent value for money.”
Technology pressure points remain
The committee backed findings from the 2019 Thodey Review that the APS was not keeping pace with increasing public expectations for digital technology, with the committee hearing of ICT capacity “severely lacking”.
The authors wrote they were “extremely disappointed” with progress made on an ‘urgent audit’ of ICT capability, risks and needs recommended by Thodey.
The Department of Finance also told the committee there was currently no central data collection process related to ICT expenditure across government.
The committee recommended the government immediately finalise its Digital Review and include current and forecast ICT expenditure and assets.
In a dissenting report, Coalition senators criticised the Labor-dominated committee as being “a wish list for the union movement”.
“Many recommendations have been lifted directly from union submissions and have ignored the evidence provided by APS agencies to the inquiry,” they said.
“Notably, many of the recommendations from Labor Senators would significantly increase the workload for various agencies and their APS employees for no demonstrable gain in outcomes for the Australian public.”