Nicola Willis likely to exceed target for reducing consultant spending, saving $800m; job losses well lower than reports

Public Service Minister Nicola Willis. Photo / Mark Mitchell

New data from the Public Service Commission shows the Government is on track to exceed its target for reducing spending on contractors and consultants by about $100 million a year, 25% more than its goal.

In Opposition, National set a target of reducing the annual spend on contractors and consultants by $400m a year from 2022/23 levels. Data from the Public Service Commission shows that the Government is on track to save $500m this year, based on savings that have been reported in the first quarter, which ended in September.

Added to the $274m in savings found in 2023/24, the Government expects to save a total of $800m over two years.

Public Service Minister Nicola Willis said the money had been used to fund the Government’s tax package and that the figure partly reflected departments bringing skills in-house rather than buying them in from consultants.

“It’s good for taxpayers because they will get more value out of that money by having it in their back pockets in the form of tax reduction. It’s also good news for the public service, who are capable of doing many of the jobs the last Government farmed out as a matter of course,” Willis said.

“We want to see expertise and insight being shared across the public service and not always being given to contractors and consulting firms at exorbitant expense,” she said.

Willis said the reductions had been found by asking departments to reduce their spending and encouraging them to get expertise from other parts of the public service before calling on a consultant.

“I feel for anyone who loses a job, but no government can live beyond its means indefinitely.”

Willis argued the data showed the Government was delivering on its promise to shift resources to the front line.

“In the year to June, there was an 11% reduction in the number of clerical and administrative roles, and an 8% reduction in policy roles. At the same time, the number of service delivery roles increased.

“Contact centre workers increased 17%. Inspectors and regulatory officers increased 6%, and social, health and education workers have gone up 1.5%.”

While some of the job losses resulting from the cuts may not yet be reported due to a delay in the redundancy taking place, the data suggest a much smaller reduction in headcounts than some earlier estimates.

Willis said this was a function of the fact many of the job losses were for vacant positions that had not been filled. In some cases, these might have been deliberately left open – a problem across the public service, which Willis believed was a result of some departments trying to fatten their baselines.

“What we found when we came into Government was that there had been a practice that many government agencies were holding open large numbers of vacancies and what you are seeing in some of the reporting [in the media] that the closure of those vacancies is the loss of a job.

“There wasn’t anyone in that job. In my view, agencies were using those vacancies to pad out their bottom line so that they could do their own discretionary spending without recourse to ministers. In fact, in our view you should only have the roles that are required and you should be honest about that.”

Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.