VPS budget cuts: unnecessary consultancies under axe

By David Donaldson

Wednesday May 3, 2017

There will be a process “over the next month or two” to decide where cuts to the Victorian Public Service of around $1.2 billion over four years will fall, says Treasury Secretary David Martine.

Building on the Andrews government’s desire to reduce outsourcing and bolster in-house capability, consultancies are one of the big areas departments will be looking at, but procurement, communications, administration and staffing are all also listed as targets in the Budget papers.

No details are nailed down at this point.

“At the moment in the budget the savings are being held centrally. But they do take effect from the first year, which is 17/18,” Martine told The Mandarin at Wednesday morning’s IPAA Victoria budget breakfast.

“As part of allocating those, there will be guidance given by the government to the departments on expectations on delivery. So there’ll certainly be discretion for the relevant secretaries in terms of how they allocate it, within parameters set by government.

“The parameters would be things like not impacting on service delivery, not impacting on front line services. Focusing on procurement, consultants, spending, those sorts of things,” he said. Some cuts will also affect portfolio agencies.

“All of those decisions are still to be worked through.”

Are consultants overused?

Widespread use of consultants is a common grumble among public servants — until they take up jobs in the private sector themselves, at least.

Martine agrees that “when you do add it up, there is quite a bit spent over the years” on consultancies in the VPS.

“It’s always a hard one in terms of the ideal manner of spending on consultancies, but it is one area we are conscious of trying to have a close look at,” he said.

But not all consulting work is created equal.

“There’s probably a bit of a distinction between the type of spending on consultancies. So my department for example, we’ve actually spent quite a lot [on consulting] over the last 12 months, but we did the Port of Melbourne long term lease. So understandably we’ve been engaging expertise through joint financial advisers and getting expert legal advice.

“That can be quite different to engaging consultants for more day-to-day input on something. So I think there is an important distinction there.

“But one of the messages in parameters from government will also be asking departments to have a look at what they are spending on consultancies and try and work out whether it’s an appropriate spend or whether it’s work that could have been done in the bureaucracy.”

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