Money house (Image: Adobe)
(Image: Adobe)

If the Albanese government is serious about better regulation and more transparency around the use of consultants in the public sector, it could do worse than mandate much greater detail about what consultants are actually used for.

The main tool for scrutiny of government contracts, including the use of consultants, for the Commonwealth is the AusTender site, where millions of public sector contracts are recorded. But while some basic information is recorded — like the agency letting a contract, the contractor, the start date and the value — it depends heavily on the willingness of agencies to specify why they’ve employed a contractor or consultant.

Some agencies spell out what the contractor will provide — auditing services, IT support, strategic planning, research, business support etc — but many prefer to provide as little information as possible.

Take the Australian Prudential Regulation Authority (APRA), guardian of our financial system. APRA is all about transparency for financial products and services but avoids it like the plague when reporting on its use of contractors. Last December, APRA handed PwC a $150,000 contract for a three-month job. For what? “Consultancy Review”. Right near the end of that contract, it handed PwC another $150,000. For what? This time APRA was even more succinct: “Review”. Of what? Who knows.

APRA is not the only offender. Defence, which hands out more than 100,000 contracts a year, is often equally unforthcoming. Last year it gave PwC more than $1.6 million, for “Capability Views”, which sounds like a new defence housing estate near a golf course. Dig a little deeper and you find out it was related to “the provision of services to support the acquisition and sustainment of defence’s (Air, Joint Systems, Land and Maritime) capital equipment and systems projects”, which doesn’t really narrow it down much.

Greater detail about how consultants are being used would enable us to get a greater sense of the extraordinary hold the private sector has on the public service, and the remarkable range of consulting activities that have been outsourced to large firms like the big 3.5, from bog standard audit and financial management support to IT, communications and PR, training, governance, leadership management, planning, workforce management and generic “management advisory services”.

Because while large consulting and audit firms get rich from huge contracts, they also make a motza from smaller contracts delivering things the public service used to do for itself, or which can be achieved without expensive outsourcing options. For example, last year the Department of Agriculture gave $133,000 to PwC. Rather than the usual consulting services, it was for a “Desktop Scheduler for Scheduling Activities” (unlike desktop schedulers used for other purposes, presumably). Perhaps using Gmail didn’t appeal.

In 2019, defence — which appears unable to go to the toilet without hiring consultants (usually KPMG) to scope, plan, cost, assess, evaluate and, perhaps, overcharge for the exercise — gave PWC $27,500 — not for the usual consulting or audit services, but for a cartoon (of what, we don’t know). Sorry, make that an “animated video creation”.

Indeed, it seems that endlessly recycling PowerPoint presentations telling governments what they want to hear has led to the development of extensive graphics skills within the big 3.5: Deloitte has done infographics for corporate regulator ASIC and KPMG has done graphics for its forever-client defence.

KPMG has also received nearly $400,000 from defence to design its graduate program — something that nearly every other department manages to do without hitting up consultants, reflecting that recruiting and training the next generation of managers is core business for any enterprise. But that seems to be part of defence’s long-running enthusiasm for handing large amounts of money to KPMG to train its staff in public service basics: the firm received more than $2.5 million from 2016-18 for “Delivery of leadership training for the Enabling Group’s executive level staff-“Leading for Ref” (sic — good luck deciphering that).

The beauty of such a role for a major consulting firm of course is that it gives it the chance to inculcate in the public service leaders the need to continue using consultants.

This produces one of the more ironic examples of outsourcing: defence turning to PwC to educate its staff about governance. In 2021, PwC, having used leaked tax information to flog tax-dodging scams to multinationals, cover it up and misuse legal professional privilege, was also getting $250,000 from defence to educate its staff in a “Governance Improvement Program”.

Bureaucrats even tasked PwC with telling them how Anzac Day should be commemorated. In 2018, the Department of Veterans’ Affairs gave the firm $200,000 to “deliver an evaluation of the Centenary of Anzac Program and facilitate the development of a strategic plan to guide future commemorative activities”.

No wonder public sector agencies prefer to keep the detail of their use of consultants as restricted as possible. To do otherwise would be to admit an addiction — one that big firms profit from immensely.

Does the use of consultancy firms need an overhaul? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.