APS set to bring more than half a billion dollars of core public sector work in-house

Core work in the Australian Public Service is being done by actual public servants at a far greater rate than has been the case for some time.

Consultants and contractors are being more frequently relegated to the back seat, where they once had a prime position.

A new report being released today (4 November) shows the APS is set to bring more than half a billion dollars of core public sector work in-house, reducing the reliance on external contractors and consultants.

Last year, the Federal Government initiated steps to rebuild the APS and implemented a Strategic Commissioning Framework for the service.

Under the framework, more than 100 agencies identified the core work that should be done by APS employees instead of being outsourced and set targets to begin bringing it in-house in 2024-25.

Today’s report, the Strategic Commissioning Framework 2024 Update, includes an overview of each agency’s 2024-25 target, supporting transparency and public accountability.

When setting targets for 2024-25, agencies identified the core work they would bring in-house, the relevant job family, and the expected reduction in expenditure on external suppliers.

Agencies will also achieve additional savings through reduced external labour spending on non-core work to deliver a $4 billion saving, but this is outside the scope of the Strategic Commissioning Framework.

In releasing the first annual update on implementation, Public Service Minister Katy Gallagher said the report shows agencies are committed to bringing more than half a billion dollars of outsourced core work back in-house for actual public servants to carry out.

“Core work includes developing cabinet submissions, drafting legislation and regulation, and leading policy formulation,” the Minister said.

“It also stops the use of contractors as members of agency executive teams, as we saw under the Coalition.

“When coming to government we set out with an ambitious agenda to reform the APS and to strengthen capability, to ensure the APS can deliver the services Australians expect.

“This update shows the public service has set a target for more than $527 million worth of work to be brought back in-house in 2024-25.

“This is part of the public service’s work to achieve the $4 billion in savings from reducing spending on consultants, contractors, and labour hire that the government has delivered since the election.”

Senator Gallagher has pushed hard for a lesser reliance on outsourced core work for the APS.

She said that for more than a decade, the Coalition had suppressed the true size of the public service by outsourcing core public service work to more expensive contractors and maintaining an “artificial and arbitrary” cap on public service numbers.

In October last year, the Minister issued clear instructions to all APS agencies that the days of over-relying on external consultants and contracted labour-for-hire were all but over.

She made all public service bosses set targets to slash outsourcing by June this year.

The point being made was that If a job can be done by APS staff, it must be done by them.

If external arrangements were being used for core functions, knowledge had to be transferred to the APS.

Core functions should also be expanded to include managing contracts, procurement, cost-benefit analyses, delivering programs, and managing grants, the Minister stipulated at the time.

These functions should be brought back in-house as a matter of priority.

Instructions given last year applied to all government departments and agencies, with the suggestion it would later extend to other government-run entities.

It was up to the agency heads to identify capability needs and plan for a future less reliant on consultants and contractors.

“This framework sets a clear expectation that most roles and functions will be delivered by APS employees, outlines limited circumstances in which external workforces could be appropriate, and ensures the APS maximises the benefit of any external arrangements,” Senator Gallagher said at the time.

“Over time – when supported by APS recruitment, skilling and mobility – this approach will deepen system-wide capability and reduce the risks to integrity, expertise and public trust posed by excessive outsourcing.”