Spending on consultants, contractors continues

WELLINGTON: Private contractors and consultants are doing well out of government spending propelled by the pandemic and big IT projects.

Thousands of them were collectively paid more than a billion dollars last year by 17 of the largest departments or agencies.

The Covid19 response has forced spending up, and there was more to come, several agencies said in their annual reviews.

The Social Development Ministry expected its spending on contractors to rocket up 50% this year, to $93 million, as it started IT projects delayed by the pan

demic.

Public Services Minister Chris Hipkins forecast a greater

demand for contractors for the next 12 months, due to the pandemic and oneoff capital projects such as building classrooms, but said overall the trend was down.

Yet, even as Inland Revenue dropped its spend on contractors by $20 million, as it wound down its billiondollar IT upgrade, the NZ Transport Agency and Internal Affairs were winding theirs up.

On top of that came rising spending by three of the biggest agencies which were not bound by the Government’s threeyearold directive to rein in core public sector expenditure.—

Police, where contractor spending rose 38% to $61 million.

Defence Force, up 15% to $60 million.

Transport agency, up 24%, cracking $100 million for the first time.

The NZTA review showed its communications team now numbered 72, up four, and the salary bill had leapt from $2.2 million to $4.6 million.

The 34 organisations that made up the core public sector were on a rollercoaster ride, as some departments cut spending but others increased it.

The Government vowed in 2018 to ‘‘reduce reliance on consultants’’, cut the spending and invest any savings in permanent staff.

But that only applied to the core public sector where, slowly, operational spending had been reined in, although capital spending on contractors was proving harder to tame.

The overall contractor and consultant spend was 6% up in 2020, though this must be weighed against the fact that both the public sector overall budget and headcount, and the country’s population, are expanding.

Both in the core, and at the agencies outside the sway of the Public Service Commission, warnings about Covid19’s impacts we beginning to crystallise, according to several of the annual reviews presented to Parliament.

Police said the pandemic was one reason their spend on contractors rising 38% to $61 million in 2020, the other being the firearms buyback.

So too the Health Ministry, which said its 68% jump to $42 million ‘‘reflects the fact that the ministry was required to quickly mobilise resources’’ due to Covid19.

Social Development Ministry, Ministry of Education, and NZTA say something similar — although for Education, hiring architects and project managers to build new schools was the biggest driver.

Oranga Tamariki’s review shows its communications team exploded, from 16 staff to 35, and its salary bill doubled to $3.6 million.

However, Oranga Tamariki told RNZ this was due to roles being shifted into communications, not new hires. — RNZ