NSW Labor has promised to overhaul the way consultants are hired and used by the government to limit their influence on policy development if the party wins the March election, after a scathing report outlined how NSW government agencies misused and overused costly consultants during the creation of a controversial transport entity.

The pledge, by shadow treasurer Daniel Mookhey, will send further shockwaves across a consulting sector already reeling as the federal Labor government makes ongoing moves to cut back on the use of consultants and bring skills back into the public sector.