Quakes and collapses main reasons for more consultants, says English

Bill English. Photo / Ross Setford

The Government has defended its rising payments to consultants, saying unexpected events such as earthquakes and finance company collapses required experts that the public sector could not provide.

Documents released under the Official Information Act showed that Treasury and the Ministry of Forestry and Agriculture had tripled their payments to contractors in National's time in government.

Some departments were spending close to a third of their budget on consultants.

The data, which did not include some large government departments, showed a 6.4 per cent increase in consultant spending between 2008 and 2011.

Finance Minister Bill English said this did not represent a blowout because it was lower than the rate of inflation and similar to the total wage increases for the public sector.

He said the big-spending departments such as Treasury had dealt with earthquake recovery, the collapse of finance companies, and guarantees for large IT projects.

"Those require specialist skills that you wouldn't expect the public service to have. While the public sector has a wide range of skills it doesn't have every skill you need in a pretty volatile world."

Treasury's budget on consultants has increased by 450 per cent since Labour's time in charge.

Mr English said he did not know what the Government had spent in total on consultants, and it was up to individual ministries to provide these figures.

Government departments Housing New Zealand and Ministry of Foreign Affairs and Trade have come under fire for their expenditure on travel and consultants at a time when they were cutting jobs.

Housing New Zealand was expected to cut 70 jobs and has replaced some local offices with a call centre.

Mr English said yesterday: "You do have to spend a bit up front to get a better frontline service with mobile technology. In the long run that'll probably mean fewer staff. And any number of other public organisations will be going thorough that cycle."

Labour housing spokeswoman Annette King pointed out that Housing New Zealand had spent $230,000 on travel in 2010-11 and $5 million more on consultants and communications staff under National. The communications staff earned an average of $116,000.

A Housing New Zealand spokesman defended the agency's spend on public relations staff, saying that extra support was needed for the organisation's biggest restructuring in its history.

Asked why the agency needed to send three staff to London to speak to "forecasting experts", the spokesman said the employees were undertaking crucial research on world's best practice on meeting housing demand.

"More than a third of state houses are in the wrong place or are of the wrong size, type or standard to meet the nature of demand expected in the future.

"Being able to accurately forecast housing demand and supply is a critical part of the corporation's role as it ensures that state housing is available in the right place at the right time."