Consultant spending increases after promise to reduce it

State Services Minister Chris Hipkins promised in mid-2018 the Government would ‘‘reduce the reliance on expensive consultants and contractors, saving taxpayers many millions of dollars a year’’.

At that time, the total spend across all 30-plus public sector bodies was just over $550 million.

However, annual reviews show spending on contractors and consultants at 13 of the largest departments have increased a total 14 per cent in a single year to $720m.

That figure does not even include the new Ministry of Housing and Urban Development, which spent $13m on contractors in its first nine months.

Only four of those 13 departments returned reductions. Three of the 16 biggest departments do not provide annual reviews.

Challenged over the increases, Hipkins said he had ‘‘made it clear . . . that a reduction in spending on consultants would take time’’.

Inland Revenue was by far the biggest spender on consultants and contractors, shelling out $206m in 2018-19. The Public Service Association is taking legal action against IRD over its use of temporary staff, arguing the department – not the recruitment agency – is their employer, but that the temps are getting a worse deal than permanent employees for doing the same work.

Its annual review promised more of the same in future.

‘‘To minimise the impact of the transformation for our people, we have had workforce management principles in place since November 2016 that encourage the use of fixed-term employees and contractors where the nature of our workforce is likely to change,’’ IRD’S annual review said.

The department said those principles had led to cuts in permanent staff and more fixed-term employees and contractors hired, and emphasised it needed shortterm IT expertise to implement a overhaul of the tax system.

IRD’S spend may have been the highest of the 13, but its annual increase in such spending was just 5.6 per cent.

Other agencies had far bigger increases:nzta, 86 per cent more at $84m; Corrections, 40 per cent more on contractors at $60m; Police, 30 per cent more at $44m; Ministry for Primary Industries, 27 per cent more at $56m. – RNZ