Isaac Davison

Isaac Davison is a NZ Herald political reporter.

Spending on consultants rises under National

File photo / APN
File photo / APN

Some government departments have tripled their spending on consultants during the National Party's time in power, despite assurances from the Government that it was not depending more heavily on contractors.

The Treasury was one of the biggest spenders, increasing its payments to consultants from $1.4 million in 2008 - Labour's last year in charge - to $8 million in 2011.

The Ministry of Agriculture and Forestry (MAF) tripled its consultancy fees in this time frame to $12.6 million.

The Environment Ministry was the biggest user of consultants, clocking up $15.7 million in fees in 2011, nearly one-third of its total budget.

The data on consultant expenditure was released to freelance journalist Keith Ng under the Official Information Act.

Treasury spokeswoman Anna Symmans said the department needed legal and valuation experts over the bailout of AMI, and also hired specialists to help set up the Better Administrative Support Services and Deposit Guarantee Schemes.

She said Treasury's spending on consultants was expected to increase further as it bought specialist advice on mixed ownership of state-owned assets.

MAF was unable to give a full response yesterday, but said its recent merger with the Ministry of Fisheries was expected to save $20 million a year.

Labour Party State Services spokesman Chris Hipkins said increased spending by some departments was the inevitable result of laying off public service workers.

"It doesn't surprise me because at a time when the public sector's being cut the [government's] effectively being forced to use consultants or contractors, instead of employees, because they have this arbitrary cap which says you can't employ new staff."

He was concerned that in some cases public servants were losing their jobs, often with redundancy pay, before being rehired on higher wages.

"What this shows is that the Government's cap of the number of staff isn't actually saving the taxpayer money. If anything, it's probably costing the taxpayer more."

While in opposition, National was highly critical of Labour's failure to keep under control its consultancy fees, which were $111.9 million in the party's first year of office.

The State Services Commission released a Cabinet paper last year which said that the cutting of public sector jobs was not leading to the use of more contractors.

It showed expenditure fell by 6.8 per cent after public service workforces were capped.

But the new figures showed that the commission's proof had huge gaps, because it did not include large departments, such as education, conservation and other ministries.

The Ministry for Foreign Affairs and Trade (Mfat) came under scrutiny last month for spending $9.2 million - some of which was in consultants' fees - in a major overhaul to make savings of $25 million.

The new figures showed Mfat doubled its expenditure on consultants between 2008-2011.

Housing New Zealand was also being restructured, with 70 jobs expected to be cut and several offices replaced by a call centre. The data showed that HNZ spent $20.6 million on consultants in 2011, up from $10.7 million while Labour was in charge.

- NZ Herald

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