Prime Minister Chris Hipkins at his post-cabinet press conference this week, and wearing a mental health helpline badge. Photo / Mark Mitchell
Prime Minister Chris Hipkins at his post-cabinet press conference this week, and wearing a mental health helpline badge. Photo / Mark Mitchell
The Ministry of Education tops the league table of expenditure on consultants and contractors in the year to June 2022 at $237 million, when Chris Hipkins was minister, with Health second and Social Development third.
Hipkins, who relinquished the portfolio when he became Prime Minister in January, said he wantedto see more reliance on in-house work but a lot of the increase in Education had been on school building projects.
National has said it will save $400 million in contracting expenditure in order to fund its policy to increase subsidies on early childhood education.
“I think they need to be a lot more transparent about what they would not do in the future if this is the way they are going to pay for their early childhood education policy,” Hipkins said at his post-cabinet press conference. Hipkins also said some areas such as transport were heaving users of consultants and contractors, who designed roads for example.
“At a conceptual level, I would rather Government departments did more of this work in-house and less of it consulting but in the Ministry of Education’s case…if you look at some of the big areas of growth, one of the big ones was that we are spending more money on school capital ie classroom upgrades, rebuilds and building new schools than any Government in generations.”
The building sector was dominated by the consulting contractor approach and had been one of the big drivers of growth.
Hipkins said he did not want to defend the consulting and contracting industry but if a Government department did not have the people to do the work that needed to be done, it had to be done somehow.
According to the Public Service Commission (PSC) website, Education spend $237 million on consultants and contracting in the 2021 – 22 year, Health spent $154 million and the Minister of Social Development spent $116 million in a total expenditure of $1.24 billion.
However, the PSC lists only ministries and departments, n in the core public service, not Crown entities such as Waka Kotahi and Kainga Ora, which also report to Parliament on their expenditure.
National public service spokesman Simeon Brown said Deloittes had been paid the most. Photo / Mark Mitchell
National public service spokesman Simeon Brown has compiled information from their reports to select committees and says the total bill for the last financial year was more like $1.7 billion.
He also said almost $100 million had been made to the so-called Big Four global consultancy firms, Deloitte, PwC, EY and KPMG to the core public service.
“Despite Chris Hipkins promising as Public Service Minister in 2018 the Government would cut spending on contractors and consultants, the Big Four have raked in $314 million from the core public service since Labour came to office.
“While Kiwis have been battling with the cost of living crisis, Labour has been spending up on consultants, leaving taxpayers questioning what they are getting for all this money.”
The $97.39 million spent on the Big Four in the last financial year is 8 per cent of the core public service’s total contracting and consulting expenditure.
According to figures compiled by Brown from OIAs, the parliamentary library, various select committees was Government agencies, Deloittes was paid most of the Big Four at $32.93 million in the 2021 – 22 year, EY was paid $26.08 million, PwC was paid $25.57 million and KPMG was paid $12.8.
Brown said while there would always be a place for some spending on consultants in Government, there had been a lot of waste in the system such as expenditure on the now-cancelled cycle bridge across Waitemata Harbour and the abandoned TVNZ-RNZ merger.
