Greens senator Barbara Pocock warns big four consulting firms have 'eaten' public service capability

The minor party's public service spokesperson senator Barbara Pocock also wants to see changes to the "sketchy and inadequate" way multimillion-dollar contracts are evaluated to determine value for money.

It comes as an analysis by The Canberra Times of government contracts over the 2022-23 financial year revealed the big four firms - Deloitte, EY, KPMG and PricewaterhouseCoopers - had reaped $813.2 million across 844 contracts.

While the amount is a $614 million reduction on the previous year, Senator Pocock wants to see the Labor government take an even tougher stance.

Public Service Minister Katy Gallagher says the work is under way, but the numbers on the board won't reduce overnight.

An in-house consulting firm, which will be set up within the Department of the Prime Minister and Cabinet, will reduce the bureaucracy's reliance on the big four and smaller firms offering their services.

"The rebalancing of the APS and consultants hasn't yet been reached, there is more work to do," Senator Gallagher said.

"We can't undo 10 years of damage in one year alone."

The latest figures suggest some work is underway with the total value of contracts for the big four firms across 2022-23 dipping below the billion-dollar mark for the first time since 2018-19.

Senator Pocock wants more done in the meantime in the wake of PwC's confidentiality breach.

The major firm has come under recent fire after it was revealed staff shared confidential tax information and used it to offer clients loopholes to avoid paying tax.

The Greens senator, who is on a parliamentary committee scrutinising the work of consultancies, believes a cap should be placed on how much public money is used on outsourced work.

"Consulting has eaten into the public sector's capability," Senator Pocock said.

"The increasing evidence about conflicts of interest in big consulting firms only adds strength to the argument that we need to cut back really dramatically."

The opposition's public service spokesperson, Jane Hume, also believes contractors and consultants should not increase government expenditure.

But the Victorian senator said private firms were "often the most cost-effective" options when the government needed outside expertise.

"The Commonwealth has and must maintain its world-class public service, which is an integral part of policy development and administration," Senator Hume said.

"However, we need to ensure government costs are as low as possible without impacting the delivery of essential services or policy development."

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The data used in the analysis from the federal government's contract data portal is fraught with errors and ambiguity.

A "consultancy" filter has been introduced but it's unclear how some contracts fall under it.

Senator Pocock said the tool needed to be improved in order to get a better understanding of the money spent.

Without it, some of the money flowing to consulting firms will slip below the radar.

"One of the things that surfaced in our inquiries is that system through AusTender is very far from perfect in properly allocating consultancy to the right line," she said.

"Without a really good measurement of consulting and contracting and use of labour hire, it's hard to say exactly where we're at."

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