Coalition gov spent at least $1.9bn in a year sourcing IT and digital skills

The former Coalition government spent at least $1.92 billion last financial year on outsourcers, contractors and consultants to plug ICT and digital skills gaps in the public sector.

The sizable figure was released by the minister for public service Katy Gallagher on Saturday, as the government published findings from the most recent Australian Public Service (APS) audit of employment.

While the audit takes into account 112 APS entities, it also excludes “a number of agencies”, including CSIRO, ABC and parliamentary department, meaning the total spend could be even higher.

Overall, the audit found that $20.8 billion was spent on consultants, contractors and external labour-hire contracts in 2021-22.

For that spend, the government secured the equivalent of 53,900 full-time equivalent (FTE) workers.

However, most of the $20.8 billion can't be broken down; in fact, only $3.07 billion can be drilled into.

The actual audit [pdf], released later on Saturday, states the amount that can be definitely attributable to external labour hire for "ICT and digital solutions" is $1.92 billion.

The figure is likely to be much higher; the issue is that Defence, which accounts for 76 percent of the total spend on external labour hire, is "unable" to break down how it spends its money based on domains such as ICT and digital solutions.

An addendum [pdf] shows that Defence has in the region of 4500-plus personnel sourced via external labour hire agreements in the area of ICT and digital solutions, but this is not costed.

Of the confirmed $1.92 billion spent on ICT and digital solutions labour hire, $1.3 billion of it went to contractors, $429 million to outsourced service providers, $146 million to "labour hire" and $36.3 million to consultants. 

In total, the spend bought access to 10,912 full-time equivalent ICT and digital staff, again excluding Defence.

Social Services and Treasury were the biggest spenders on ICT and digital staff, outside of Defence, at $513 million and $494 million respectively.

Much larger APS workforce

Under the Morrison government, public servant numbers were capped, with spending on external labour hire and consultants increased dramatically, previous budget reviews have stated.

Gallagher said the 2021-22 audit “painted the true picture of the APS workforce under the former Liberal/National Government.”

“What we have uncovered is the extent of the former Coalition government’s shadow workforce that was plugging gaps in the APS created by their arbitrary cap on the number of government employees,” the minister said. 

“While the Coalition pretended to cap the size of the public service, they were signing contracts by the billions to outsource work that still had to be done.

“The approach of the former Liberal/National governments undermined capability across the service, [and] left many departments under-resourced.”

The government has committed to rebuild the skills and capability of the APS.

Update, 5.43pm: The story originally stated the ICT and digital solutions external labour hire spend was $8.9 billion, based on a statement that "43 percent of the total spending on external labour was in the area of ICT and digital solutions".

These figures are not reflected in the source report, however. That report, which was released later, makes clear that the known amount spent is $1.92 billion.

This excludes any labour hire for ICT and digital by Defence, meaning the total would be far higher, but cannot be accurately calculated.