The NSW Government has today announced it has saved more than $450 million on external consultants and individual contractors in its first full year in government.
The savings include a $72 million reduction in consultant spend across agencies – down from $130 million in 2022-23 to $58 million in 2023-24.
“This government is committed to paying consultants less and essential workers more,” said Acting Treasurer, Courtney Houssos (pictured).
“Delivering on these savings required a forensic approach to the state’s accounts and a culture shift which prioritises harnessing the expertise and knowledge within the existing public service.”
The move follows a NSW Auditor-General’s report which found that the previous Liberal-National Government spent more than $1 billion on external consultants without adequate procurement and managements policies in place. Subsequent analysis also found that the previous government issued more than 10,000 contracts in their last five years in office, averaging a new contract every hour.
The Acting Treasurer said the NSW Government was also delivering on its election commitment to reduce the government’s spend on payments to contractors acting as de facto employees in the public service, known as contingent labour. That figure has dropped from $2.1 billion in 2022-23 to $1.7 billion in 2023-24 – a 17% reduction.
“The growth in consultant spend under the previous government was out of control. We said we’d end wasteful spending, and that’s what we’ve done,” said Ms Houssos.
“There is always more to be done, and the Minns Labor Government continues working to ensure that every dollar of taxpayer money is being spent more efficiently.
“Instead of wasting money, we’re bolstering the public service’s capacity and focusing their efforts on what matters most to families and households in NSW.
“Given the scale of the problem we inherited, there is still much work to do,” she said.
The Government is continuing to progress the establishment of a new unit within the Premier’s Department to reduce the use of consultants by redirecting agencies to in-house expertise.
Under the previous government, 15% of contracts for external consultants were for ‘generalist work’ which could be done in-house and includes work like policy design and evaluation, said the Acting Treasurer.
A report released by the Government in May 2024 found that utilising the existing expertise within the public service could save as much as 52% per contract. It also means that the public sector can retain knowledge and talent, thereby improving the quality of future, similar projects, the Government said in a statement.