The outsourcing of Australian Public Service (APS) work, including the use of consultants, has been described as an industry full of “sleazy Canberra deals”.
The Labor chair of the committee that inquired into APS capability told the Senate on Thursday, 25 November, when tabling its report, that it was an unaccountable industry of opaque contracts, rent seekers and shadow workforces.
Senator Tim Ayres said outsourcing reaps billions but “delivers an inferior service for taxpayers and undermines public sector capability”.
He said the increasing reliance on labour hire and consultancies is based on Coalition hostility to public servants and the public service.
“It’s an industry that politicises the very institutions that underpin our democratic system,” said Senator Ayres.
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He attacked the government’s average staffing level (ASL) cap, which the report found ties the hands of agency heads and encourages the use of labour hire.
“Agency heads are committed to the public service, but infantilised by the government’s ASL cap,” said Senator Ayres.
The report, ‘APS Inc: Undermining public sector capability and performance‘, recommends the abolition of the staffing cap, and for the main form of employment to be direct and permanent, with labour hire only used where it is not possible to engage non-ongoing staff directly.
“While the ASL cap may make the APS appear smaller, it does so at the expense of long-term capability and quality service delivery for Australian communities,” said the report.
It recommends more transparency around the use of labour hire, including more data being collected by agencies, the inclusion of contractors in the APS census, and agencies having to disclose how much they are spending on them.
The report recommends steps to limit the use of consultants, including a cap on the amount agencies can spend on external consultants; strict guidelines for their use; and the establishment of a consulting hub to provide in-house services.
A government consulting hub would also be responsible for monitoring and developing agency level policy capability, assessing and approving all agency requests, and rewriting specifications before contracts are put out for tender.
The report said the overuse of consultants has encouraged a creeping politicisation, and undermined the principle of frank and fearless advise.
The report also took aim at pay disparities between departments and agencies, recommending they move towards common core conditions and pay scales for APS-level and executive level employees, as per the Thodey Review.
It welcomed the establishment of the APS Academy to maintain and develop skills, but urged the Australian Public Service Commission to monitor and evaluate its operation and provide public, yearly updates on its achievements.
The committee acknowledged the “extraordinary commitment and resilience” shown by APS employees in dealing with the multiple crises of bushfires, floods and the ongoing COVID-19 pandemic.