Consulting firms working for the Defence Department, the National Disability Insurance Scheme and the Australian Taxation Office will be hardest hit by a new plan to strip more than $500 million in work from the embattled advisory sector this financial year.

The revelation is contained in a new report that details, for the first time, the value of work considered core to the public service that is done by external parties and will be brought back in-house to government departments and agencies. Core work includes activities such as developing policy and drafting laws and regulation.