web analytics
The Standard
Advertising

Redundancies, consultants, professional development

Written By: - Date published: 9:46 am, September 12th, 2012 - 12 comments
Categories: accountability, national - Tags: ,

National is the party of stupid, short term thinking. It’s evident everywhere, even in areas of supposed Nat strength like sound business management. Consider for example the abject folly of sacking a bunch of staff, and then running up $1bn in consulting fees:

Govt depts clock up $1bn in consultant fees

Government departments which have spent millions in laying off staff are responsible for nearly $1 billion in consultants’ fees.

Figures provided by the Labour Party showed ten agencies have spent $910.5 million on contractors since 2008 while also spending $114.1 million on redundancies.

The restructuring of the Inland Revenue Department (IRD) had seen departing staff collect $31.3 million in redundancy payments before contractors were hired at a cost of $125 million.

There are further case studies reported here, but carrying on with the above coverage:

Labour’s State Services spokesman Chris Hipkins said the figures made a mockery of National’s claim that it was moving resources from the back office to the frontline.

“The public service has already lost a huge amount of valuable expertise and experience and is simply plugging the gap by hiring consultants. “This is short-term thinking and it doesn’t make sense. We must invest in and value institutional knowledge.”

Exactly.

While in Opposition, National was highly critical of Labour’s failure to keep consultancy fees under control.

Finance Minister Bill English said the contractors had been employed for work which the public service had neither the funding nor the expertise to do. He said specialist skills were needed for the rebuild of Christchurch, the design of the Deposit Guarantee Scheme, and on multi-billion dollar IT projects.

“We just don’t have public servants sitting around who know how to redo the 25 year-old tax collection system,” he said.

Every government needs, and has used, a certain amount of external consulting support. But mass redundancies, then hiring some of those people back as expensive consultants, and running up a billion in fees, makes no kind of sense at all. If essential expertise doesn’t exist within an organisation then the sensible alternative to redundancies and external consultants is internal professional development.

Here’s the real question for the Nats’ management of the public sector – has there been a cost/benefit analysis of professional development for existing staff vs redundancies and external consultancy? If so, let’s see it. If not, then they’re throwing money down yet another ideological drain.

12 comments on “Redundancies, consultants, professional development”

  1. King Kong 1

    The consultants would have been hired anyway (maybe not the restructuring ones).

    The civil service became gutless under Labour and no one wanted to make any decisions without a Mckinsey or Deloittes report to cover their jacksies with if it all turned to custard.

    In the civil service I would say there is a mix of scared clever people and institutionalised morons outsourcing their jobs whilst still collecting a salary.

    • Colonial Viper 1.1

      We need to strengthen the public service and root out the inconguous, low value added private sector managerialism which has taken hold.

  2. Tracey 2

    “The consultants would have been hired anyway”. Proof?

    • mike e 2.1

      last time national were in power they did exactly the smae thing sacked public servants re hired them as consultants and also hired National party hacks at exorbitant rates.
      Shipley in CHCH.
      Repeat !National got up to $800 million in consultants last time they were in powewr heading the same direction again

  3. Consultant 3

    Keep an eye out for the All Of Governement deals. Ostensibly these deals get the governement economies of scale with regard to purchasing of services across departments. In effect, several large companies are going to lock the governement into contracts that look good price-wise up front but will end up being a rort through the use of “extras”. Where a company cannot profit from a service to the government, they will, of course, just reduce the quality of their service to the point where the departments will fulfill their own requirements internally. Penalty clauses will never be enacted. Many of the smaller companies, that offered some competition, will just go to the wall.

    Witness the current out-sourcing agreements, where “hosting your old IT equipment” is sold as “move to the cloud”. We’ll come and collect all that gear, chuck it in our flash datacentre and send you a monthly invoice. Thanks. You get the same services you had, with the extra cost of hosting.

    The public lap up the reduction of public servants (almost as popular as bene-bashing), they just don’t see that the flipside is an increase in consultants because the work still needs to be done, and the cost comes from a different magical accounting pot. Where a public servant actually cares about the job they are doing, the contractor is basically a mercanary.

    I know, cos I is one.

    • Colonial Viper 3.1

      Yeah its a merry band, I used to have to work with a few from time to time. Good peeps, in general, doing work at thrice the price (although the Partners were the ones who kept most of the money).

    • tc 3.2

      The sheeple also don’t understand that a core of competant and experienced civil servants ensures the wheels don’t fall off and gov’t policy can get done more effectively.

      The Nat’s had to get rid of this troublesome lot as it would of obstructed their ‘vision’ with practical experience about how and why it needs to be done a certain way.

      NACT the party of short termism for their own long term wealth outcomes.

    • prism 3.3

      Consultant
      We know that consultants are people too! And very useful except at present it’s the silo pots that money is divided into – no for more staff, no money, but the work needs doing, hire a consultant at a day’s wages per hour about. And that somehow can be paid for – out of where? But that’s how it’s done folks.

    • muzza 3.4

      And imagine what the rort looks like when its applied across the local govt sector etc!

      Yeah the consultants certainly rule the roost inside most departments of the “super city”, thats for sure.

      Consultants running “transformational activities”, simply translates into consultants ensuring their troughing into the future. All hired by consultant mates of course, because the working history of relationships is very easy to establish in little “non corrupt” NZ!

      Who loses, we all do of course, even the consultants, they just don’t understand the negative impact still applies, just on a time lapse.. While a little slower, the pain will arrive on their doorstep too!

      Its the world we live in sadly!

  4. lenore 4

    we are being restructured at the moment after a consultant was brought in – they obviously didnt know how we operate and the rationale is really flimsy.

  5. Where are the publicly-available ‘Registers of Interest’ – that help prevent untoward ‘conflicts of interest’ between those hiring these ‘consultants’ and those ‘consultants’ who have been hired?

    Penny Bright
    ‘Anti-corruption campaigner’

    http://www.dodgyjohnhasgone.com

  6. Lanthanide 6

    Seems to me that Labour should do as ACT proposed – put a law in place to cap government spending. Except Labour’s version would be to cap spending on consultants, and if the government wanted to increase spending on consultants, the minister of finance would have to front in parliament to receive permission to do so.

Important links

Recent Comments

Recent Posts

  • English breaks his $6000 wages promise
    Just one month into the new year Bill English has already rowed back on his election promise of real wage rises for New Zealanders, says Labour’s Finance spokesperson Grant Robertson. “During the election campaign National promised Kiwis that the average… ...
    5 days ago
  • National fails to produce evidence justifying attack on RMA
    The National Government is misusing evidence provided in the Motu report on planning rules to justify gutting the environmental protections secured by the Resource Management Act (RMA), says the Green Party today. The Motu group's research into the impacts of… ...
    GreensBy Julie Anne Genter MP
    5 days ago
  • National fails to produce evidence justifying attack on RMA
    The National Government is misusing evidence provided in the Motu report on planning rules to justify gutting the environmental protections secured by the Resource Management Act (RMA), says the Green Party today. The Motu group's research into the impacts of… ...
    GreensBy Julie Anne Genter MP
    5 days ago
  • RMA changes won’t knock a dollar off the cost of a new home
    The Government’s proposed changes to the RMA won’t increase the number of affordable homes or knock a dollar off the cost of building a new house, Labour Leader Andrew Little says.  “Tinkering with the RMA will not solve National’s housing… ...
    5 days ago
  • What is the real ‘price of the club’?
    What price is too high to join a club?  According to the current the New Zealand Prime Minister, the lives of young Kiwi men and women are a part of the package. In his latest BBC interview, John Key fails… ...
    GreensBy Kennedy Graham MP
    6 days ago
  • DOC debacle means hundreds may have missed out on fishing licences
    Hundreds of families and recreational fishers may have had their holidays spoiled by missing out on their fishing licences, with Conservation Minister Maggie Barry preferring instead to focus on more high profile portfolio priorities over the summer break, Labour’s Conservation… ...
    7 days ago
  • Effective action needed against pirate fishing boats
    New Zealand’s failure to detain pirate shipping vessels poaching endangered species in our region is simply not good enough, Labour’s Defence spokesperson Phil Goff says. “We send New Zealand naval vessels to the Arabian Gulf to board pirate ships there… ...
    7 days ago
  • Housing affordability crisis gets worse under National
    News that Auckland’s housing is now among the 10 most unaffordable in the world confirms the Government’s housing policy has failed, Labour’s Housing spokesperson Phil Twyford says. “After six years in power, National’s housing policies have not fixed the housing… ...
    1 week ago
  • Rheumatic fever rates continue to soar despite millions spent on prevention...
    The Government’s $65 million spend on rheumatic fever prevention has made little impact on the alarmingly high rate of the disease among young New Zealanders, Labour’s Health spokesperson Annette King says. “Latest figures from ESR show there were 235 notified… ...
    2 weeks ago
  • Speech to the Asia Pacific Parliamentary Forum in Quito, Ecuador
    I was honoured to speak to the Asia Pacific Parliamentary Forum, calling for cooperation and action on climate change. You can read my speech below. Greetings from New Zealand in our first language – kia ora nga mihi nui… ...
    GreensBy Gareth Hughes MP
    2 weeks ago
  • Government wipes off $5 billion in tax debt
    Since coming to office, the National Government has written off $5 billion* in tax debt owed by more than a million, Labour MP Stuart Nash says. "There are two sides to the New Zealand economy under the National government: the… ...
    2 weeks ago
  • Labour adds its condemnation of Paris attack
    The Labour Party adds its voice to the international condemnation of today’s shocking attack on freedom of speech in Paris, Leader Andrew Little says. “The attack on the Charlie Hebdo newspaper is an assault on democracy and freedom of expression.… ...
    3 weeks ago
  • Petrol retailers and importers must pass on savings
    New Zealand’s petrol retailers and importers must start passing on savings to Kiwis motorists following the dramatic drop in the price of crude oil, Labour’s Energy Spokesman Stuart Nash says. “It is great news for Kiwi drivers that the price… ...
    3 weeks ago
  • Foreign investors must uphold their promises
    The Government must ensure foreign investors uphold their commitment to add value to sensitive New Zealand assets* they purchase, after new figures show National has declined just 1.5 per cent of all applications, Labour’s Land Information spokesperson Stuart Nash says. … ...
    3 weeks ago

Public service advertisements by The Standard

Current CO2 level in the atmosphere