Cost of external consultants, contractors grows

The State Government’s bill for external consultants has jumped but the Treasurer says there is a plan to slow the spending.

State Government departments and agencies are spending the equivalent of more than $6.1m a week on outside advice, specialised services and contract workers.

Figures provided to the Sunday Mail showed $320.9m was spent on consultants and contractors last financial year.

The spending was a 3.55 per cent jump on the previous year, when $309.8m was spent, but down on 2017-18, when spending reached $325.8m.

There was an expectation the coronavirus pandemic could result in higher spending this financial year.

South Australian Treasurer Rob Lucas. Picture: David Mariuz

Treasurer Rob Lucas said a $75m cut over three years to the public-sector budget was aimed at reducing the number of consultants and contractors.

But a number of new trends, and investment in infrastructure, had resulted in a growth in numbers.

One area Mr Lucas had asked departments and agencies to review was the costs of short-term or contract workers.

Sunday Mail analysis of department and agency annual reports showed money was being spent on a raft of issues, from cyber security to probes into the veracity of various government initiatives.

The state’s three universities had all received consultancies fees. Flinders University was paid almost $60,000 for a naval shipbuilding industry workforce review.

Consultancy firm Learning First received $207,000 to work with education directors and school leaders to develop a “school improvement planning process”.

More than $550,000 was spent on consultancies examining the virtues of the public servant superannuation fund, Super SA.

KPMG received $185,200 for the preparation of design documentation for the Aboriginal Entrepreneurs Hub.

International education specialists The Lygon Group was paid $50,000 for “positioning TAFE SA for growth in International Education”.

Opposition treasury spokesman Stephen Mullighan. Picture: Matt Loxton

Some of the external advice was for overhauls to processes or systems. Child Protection paid Chamonix IT management $427,822 for an intranet roll out.

Infrastructure firm AECOM Australia was paid $294,817 to provide advice on how to transition Leigh Creek to a sustainable, open and self-sufficient town and PwC Consulting was handed $940,480 to review and redesign the Local Health Networks.

Mr Lucas said some areas, such as cyber security, required outside help.

“We have such little expertise in the public sector in this highly specialised area,” he said. “Governments are going to have to be spending significantly more on cyber, and we are going have to develop our own expertise over time.”

But Mr Lucas said the recruiting and temporary staff bills for government agencies and departments were too big.

“That is one of the areas we are looking at in terms of getting some justifications,” he said. “In next year’s Budget, we will be looking at agencies to see if there is justification in all cases for using agency and agency staff.”

Opposition treasury spokesman Stephen Mullighan said as spending on consultants continued to rise, the government was cutting doctors, nurses and other frontline staff. “Even worse, the government continues to hand lucrative contracts to interstate firms … to run our hospitals … to deliver our school upgrades and interstate advertising firms to deliver tourism advertising, like the dreadful Old Mate campaign,” Mr Mullighan said.