Government to reduce reliance on consultants
05 July 2018
NZ Government:
The Government will reduce the reliance on
expensive consultants and contractors, saving taxpayers many millions of
dollars a year, State Services Minister Chris Hipkins said today.
“The Government has made a decision to lift the ‘cap’ on core
public
servant numbers put in place by the previous Government,” Chris Hipkins
said.
“The cap was introduced at the height of the global financial crisis but
it created perverse incentives and in the following years its arbitrary
nature forced the previous Government to find creative ways to get
around it.
“The total cost to taxpayers of contractors and consultants up to June
last year (2017) was more than $550 million*.
“This is an increase of $272 million – nearly double – on the amount
spent in 2008/09, before the cap was introduced.
“We want to bring this spending back down over time and invest any
savings in permanent staff.
“In removing the cap, this government wants to see the public service
re-build their in-house capability and invest in permanent and long term
staff, rather than spend millions on temporary contractors,” Mr Hipkins
said.
“This Government has big ambitions for the Public Service.
“We want a public service with an international reputation for
excellence and that means attracting and retaining the best talent to
careers in the Public Service.
“It’s important we invest in the Public Service because public servants
are the people who deliver the vital services that improve the wellbeing
of New Zealanders and their families every day.”
Existing mechanisms were in place to manage the Public Service
workforce, Mr Hipkins said.
“The most effective way to manage the Public Service is fiscal
discipline and accountability,” Mr Hipkins said.
“Lifting the cap creates incentives for agencies to find efficiency
savings. It’s up to agency chief executives to demonstrate why they can
no longer manage within existing budgets.”
“The Government will also be held to account on public service numbers
through Parliament’s select committee process and beefed up answers to
annual estimates and financial review questionnaires, which asks
departments to justify spending on external consultants and contractors
and why internal resources could not be used.
“I’ve made my expectations to the State Services Commissioner very clear
and he is confident that he and agency chief executives can reduce the
dependence on consultants and contractors as we invest more in
rebuilding the Public Service,” Mr Hipkins said.
The relevant Cabinet papers and minutes can be found here.
Note: Sourced from Select Committee answers. At 30 June 2017, there were
29 Public Service departments. Twenty two of them provided answers to
Select Committee on contractors and consultancy expenditure. The total
spend was $546 million). For those same agencies, the increase since
2008/09 was $272 million (99%).
--ENDS--
Source: New Zealand Government - www.beehive.govt.nz
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