Government Saves $915 Million on Consultants, Boosts Frontline Roles

Frontline roles in the public service have increased in the past two years, while spending on contractors and consultants has fallen $915 million, Public Service Minister Judith Collins says.

We committed to ensuring taxpayers get better value for money from their public service, and that every dollar is used in the best way possible, Ms Collins says.

Since taking office, the Government has made substantial savings by reducing contractor and consultant spending across the public service by $915m – more than double the savings target of $400m.

I have made clear the Government’s expectation that contractor and consultant spending be kept below the new lower level of $1.25b across the public sector.

At the same time, we have reduced the size of the public service by nearly 5 percent since coming into Government - to 62,654 full-time equivalents (FTEs) as at 30 June - while crucially boosting frontline roles.

In the two years to 30 June, the estimated number of frontline roles grew 6.9 percent (1883 FTEs), while the size of the back office declined by 6.5 percent - equivalent to a reduction of 2345 FTEs, in areas such as policy analysts, clerical and administrative roles and managers.

The emphasis has shifted following Government direction to prioritise savings in back-office functions while protecting and improving frontline services.

There were 1533 redundancies in the past year, reflecting the scale of the restructure needed to rebalance the workforce, and redundancy payments totalled $80.4m.

Redundancy costs need to be seen in the context of overall savings, with public sector costs reducing by $1.5 billion a year – savings which are ongoing, Ms Collins says.

These changes are about delivering better value for money and ensuring the public service is focused on delivering the services New Zealanders need and which make a difference in their lives. Today’s results are a sign that our approach is working.