Experts divided over Albanese government in-house consulting firm, aimed at reducing APS contract spend

Public Service Minister Katy Gallagher announced the model in October 2022, with a $10.9 million investment over two years funneled into the project in the May budget.

The in-house firm, to be known as Australian Government Consulting will sit within the Department of Prime Minister & Cabinet, and employ 38 people once fully staffed. It will begin delivering services later in 2023.

Hiring began last month, with a series of jobs across APS6, EL1 and EL2, and SES classifications posted to the federal government's recruitment website.

Australian Government Consulting will be a "a high-quality alternative to external consultants for APS clients across all agencies", with scope to develop more services and reach more clients over time, the job ads detail.

Macquarie University accounting and corporate governance Professor James Guthrie was critical of the small scale of the consultancy, likening it to "a flea on the back of a bear".

"I think it's tokenism, 38 people versus whatever the billions they spent last year on consultants," Professor Guthrie said.

"It's just trying to dampen the criticism of government relying on the big seven consultants."

The government spent $49.4 billion on consultants in the 2022 financial year, analysis by The Canberra Times revealed, $813.2 million of which went to big four =firms.

Professor Guthrie instead called for the establishment of a statutory authority which could lead a whole of government approach to consulting services in Commonwealth agencies.

"Therefore setting standards for procurement, selection, performance and transparency of consulting services in the Australian public sector."

But Dean and chief executive officer of the Australia and New Zealand School of Government (ANZSOG) Adam Fennessy called it "the right investment" to make.

A former senior Victorian public servant, Mr Fennessy also spent time as a partner with Ernst & Young.

"It's not a bad thing in and of itself to have portability and mobility across sectors, but I do think ... that the pendulum did swing too far," he said.

"There was too much work going straight out of government across Australia without much thought to what the work was going to do."

Mr Fennessy pointed to the Australian Government Solicitor, the federal government's in-house legal capability, as a successful template for Australian Government Consulting.

But he did note "starting with a relatively small team is going to take some time, so I don't think there's going to be any quick fix.

"At the same time, I think this is the right investment for the Australian government to make and I also know that these are issues that other governments are starting to ask more specifically as well, around Australia."

It also make sense given the commercial model used by external consultancies "is very different to how the public service hires and supports people".

The government and the public service are facing intensifying pressure to speed up the rate of reforms in the wake of scandals around robodebt and consultancies.

Echoing sentiments expressed by Public Service Commissioner Gordon de Brouwer on Monday, Mr Fennessy argued for a thorough and careful approach to change.

"Rushing ahead will not help redevelop some of those skills that haven't been there in the public service," he said.

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