PS spend on consultants ‘eye-watering’: outgoing digital chief

Charlotte 6 December 2016 6
Paul Shetler

The Federal Government’s outgoing Chief Digital Officer, Paul Shetler, says the amount spent on consultants to the public service is “eye-watering” and has described the sector’s reliance on consultants as “remarkable”.

In a parting post on LinkedIn, Mr Shetler, Chief Digital Officer, Australian Government at the Digital Transformation Agency, says that blockers to positive transformation in the sector are “structural, cultural and skills-based”.

“Over the last 40 years, as we’ve outsourced technology, there’s been a progressive deskilling of the public service. The reliance on consultants is remarkable and the amount spent on them is eye-watering.

“That’s just not necessary if we re-skill the public service, which was one of the Prime Minister’s goals on establishing the DTO.

“Government’s biggest challenge in the digital age is to completely upskill the public service so that it is well equipped to deliver the change that’s needed.”

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Mr Shetland said that during the last 16 months at DTO and the new DTA, he had seen just how painful it could be for government to deliver good digital services.

“For services to be truly transformed, we need to go beyond the front end, and transform the back office IT too,” he said.

“Unfortunately, across most governments worldwide – and Australia is no exception – too many public servants working in back offices are often reduced to human APIs – retyping information from one system to another, and stuck processing the repetitive common cases that shouldn’t need any human intervention at all. This is a waste of their talent and initiative.”

The outgoing executive says the work of public servants is made more difficult by “astonishing complexity across government”.

“From the end user’s perspective – say, someone who wants to start a business – the set of interactions required to be compliant with government is often delivered by an assembly of different branches, agencies and tiers of government, and it’s very rare that any cog in the wheel sees the bigger picture.

“Users get chucked from one to another as they move through a process. It is irritating and demoralising for people starting a business and it makes it so easy for them to fall through the cracks.”

He notes that the Department of Industry Innovation and Science is actively working towards improving the experience, but is concerned that many find dealing with government too difficult online.

“It drives people to phone lines or forces them to visit a shopfront – both more expensive options,” Mr Shetler writes.

“Too often, people are forced to pay professionals to deal with government for them.”

The former Director, Government Digital Service, Cabinet Office in the UK notes that regular public sector restructuring can lead to IT systems being passed from agency to agency.

“Over the last 40 years in Australia, this has created complex webs of systems that cost a lot to operate, and take a long time to change,” he writes.

“This creates a vicious cycle because, whenever a new policy needs to be implemented, it’s often easier to build a new system on the side, than it is to change the existing legacy system. So you end up with what we have now, unworkable and inefficient systems that meet outdated needs and are expensive and slow to change.”

Comparing Australian government services daily transaction volumes to those of the private sector, Mr Shetler notes that we’re talking the equivalent to a few minutes of Twitter and even less on the NASDAQ.

“And still, government spends more than $16bn a year on IT,” he writes.

“Our procurement and funding processes encourage big IT programmes, with bigger contracts. They drive a culture of blame aversion which creates the perverse outcomes and actually increases risk.

“The history of the past several years of government IT failure is testimony to that. This is further complicated and exacerbated by the lack of technical and contract management expertise in government. (Too frequently, we actually ask vendors to tell us what they think we should buy.)”

On outsourcing, Mr Shetler is blunt.

“Government is one of the last industries that thinks it can outsource wholesale,” he writes.

“Banks, brokerages and the insurance industry all made the shift twenty years ago, and have been able to transform their IT in the period since.

“You don’t build digital services in the same way that you build bridges. How can you test with users, deliver a lean solution quickly, and iterate with what you learn, if you are forced to specify all your requirements upfront? When you’re locked in a big IT contract, changing what you’re building comes at a huge expense – in both cost and time.

“We found that government has little visibility over the IT programmes that are already in flight. Without a single view of what’s going on, it’s hard to avoid duplication of effort, hard to see which programmes are going to deliver on time, and hard to intervene if something’s not working out.”

Mr Shetler says the Government needs to build digital capability, and acknowledges enthusiasm for doing so among public servants.

“Transforming services makes it possible to free up the time of public servants so they can focus on dealing with the exceptional cases – where they can make the greatest impact,” the executive writes.

“One thing that’s been very clear from the last 16 months has been how dedicated Australian public servants are to doing their very best to serve their fellow citizens.”

Do you think the Federal Government relies too heavily on contractors?

Pictured above is outgoing Chief Digital Officer, Australian Government at Digital Transformation Agency Paul Shetler. Photo:

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6 Responses to PS spend on consultants ‘eye-watering’: outgoing digital chief
gazket gazket 11:00 pm 07 Dec 16

I was amazed the ACCC had that much work they need 800 employees?

spades spades 4:07 pm 07 Dec 16

I agree with the article and voted Yes to the poll, but would like to keep it this way. Selfish of me because I myself am a consultant/contractor.

JimCharles JimCharles 10:11 pm 06 Dec 16

Got to agree. The idea that services should be outsourced is not a new one, but from what I’ve seen the APS likes to outsource difficult tasks but not the services.
You end up with a private workforce running around in a bloated PS framework and that is just pretend transformation, it will not provide the benefits that are possible because the people at the top have no intention of letting go of what they know.
Some of it is good old civil service protectionism to try and blame the consultants after making their jobs nigh on impossible by holding them to impossible standards in environments they know are not conducive to successful delivery, some of it is sharp practice by some companies who just see the PS as a fatted calf, and as always on the Canberra grapevine you always know which ones are doing it as their business fortunes ebb and flow or they enter into contracts they can’t deliver on and then just frustrate the hell out of everybody, public servants and other private partners alike.
Then again, the best consultants become frustrated with the slow pace of change and they can only work to the management that are appointed to lead, and precious few of those are on performance-related contracts or in danger of losing their jobs if they mess up, so there’s no accountability if you can fillibuster a private company into making a loss, and next time they inevitably just push the price up to cover expected delays.
Ironically I’m convinced this is the reason there are fewer PS jobs where you can build a career anymore.
A lot of the careerists are a problem because they can’t be shifted and are under no incentive to learn or improve, so there are an ever-growing number of short term PS jobs (not careers) being offered on PS wages with little security or chances of advancement, so the obvious choice is to go to a private company for the same lack of security, but you get paid better and deal with your own holidays and super. Arguably that is better for performance because you never become comfortable enough to take your job for granted and go on the slide.
It is large scale cultural change that is required, or massive budget cuts to force the efficiency of practice and competitiveness of both APS and partners working together, but Canberra has a habit of behaving like the Borg mothership. You puncture the shell and it has a remarkable ability to self-heal and go back to just the way it was.

Chris Chris 9:18 pm 06 Dec 16

“Consultants are bad, mmmkay”

… after creating a digital marketplace, making it easier for agencies to engage with consultants.

bronal bronal 4:11 pm 06 Dec 16

I’d like to add that the current situation has created a large industry of consultants and contractors that depend on the Government for business. The Federal Government is, after all, probably the biggest buyer of services in the country. Some providers, for example universities, have set up whole subsidiaries to undertake government work. I’m not sure that things haven’t gone past the point of no return and that the Government wouldn’t find it nigh on impossible to cut back too much on contractors.

bronal bronal 11:04 am 06 Dec 16

I agree entirely with this viewpoint. I’ve just retired from the APS after 41 years’ service and have observed the transition from the time when the APS did most of its own work to the current situation where just about every non-routine job is farmed out to contractors or consultants. The biggest impetus for this came during the Howard years, particularly in ICT.

As noted in the article, this has led to a public service that has been deskilled in many areas and is reliant on private enterprise to do its job. This can’t be good for the impartiality of advice in areas such as policy-making. The notion that using consultants or contractors is more efficient or saves money is false as their costs are high. There is also the risk created by having sensitive information accessed by or under the control of entities not subject to APS secrecy provisions. Certain organisations also become very aggressive about getting work and cause a lot of trouble if they are unsuccessful in a tender.

Please note that I am not saying that there is no place for consultants or contractors or that
their work is sub-standard. It’s just that the situation has become unbalanced and needs to be examined and redressed.

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