Willis eyeing 17% cut to ‘consultant merry-go-round’
Thursday, 15 February 2024
The Government is promising to go through with cutting the “consultant merry-go-round” with 17% the guide for public services.
The organisations are looking at how to meet the Government's 6.5% or 7.5% cost saving target, with hiring freezes and job cut proposals in full force.
On top of the previous Government’s plan to cut contractor and consultant spend in the public service by $165m a year, National is taking aim to the tune of $400m a year.
Public Service Minister Nicola Willis said on Wednesday that amounted to about 17% of consulting and contractor spend across government.
She would like to see 17% cut from each agency, but Willis said that was a guide.
“There will be some agencies where it’s appropriate they reduce it by more than that and there may be some where, for whatever reason in a particular year, they are not able to reach that level of reduction.
“But across the board, we want to see a cut in the consultant merry-go-round that has led consultancy firms to get gold-plated bills paid for by New Zealand taxpayers.”
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Willis provided a document to the House, after being asked by Labour finance spokesperson Grant Robertson for a complete list of the exclusions to the 6.5% and 7.5% saving targets.
Required savings included public service departments, non public service departments such as the Police and Defence Force, legislative departments and funding through to Crown entities for its operational activities.
The exclusion list included, in the majority of cases, the Offices of Parliament such as the Auditor General and the Ombudsman, benefits and departmental revenue from state owned enterprises and Crown entities.
It also included non-departmental health, education and Ministry of Disabled People.
Willis would not say if any of the initial proposals were with ministers yet, instead saying “there's an ongoing assurance process which officials are leading, and that will be an iterative process … final decisions will be made by Cabinet”.
Cabinet had the right to go back to public service bosses and say their cost savings plans were not good enough and to find more savings, Willis said.
Public Service Association National Secretary Duane Leo said they were “now seeing the cold, hard reality of some of these cuts ‒ Wellington’s Science City plan has been axed, MBIE is calling for voluntary redundancies, Parliamentary Service is warning it’s already cut to the bone ‒ all just the tip of the iceberg”.
'The scale and breadth of the cuts demanded by the Government will be felt by New Zealanders up and down Aotearoa.“
Robertson asked Willis to guarantee no front-line services at the Department of Conservation would be cut.
“I'm yet to even see the proposals from the Department of Conservation,” Willis said.
To read about the future of public servant pay expectations, go to ThePost.co.nz.
The Government was “not intending” to reduce the pay of public servants through its cost cuts, Willis said.
On the future of public servant pay expectations, Willis said the government had an “opportunity to publish our workforce policy statement which provides guidelines to public agencies when they're entering collective bargaining.
“That policy statement we will be updating but it's yet to be considered by Cabinet.”
Outgoing Public Service Commissioner Peter Hughes was in discussion with Willis about any expectations on salaries and salary increases.
“We're working that through with the minister at the moment. It is normal when a new government comes to office to relook at the expectations around wages and salaries in the public sector. We're going through that process with the minister,” he said.
“How you set the targets is pretty important and the minister has set the savings targets in a way that empowers chief executives to go about them with the maximum of flexibility.”