Services Australia revises IT contractor cuts to "around 1245"

Services Australia has revised the number of IT contractors let go at the end of last year to “around 1245” and says it has “no plan ... at this stage” to make further cuts.

The revised figure is more than the agency had initially stated, though comes in under the 1600 to 2000 range that iTnews reported previously, which was based on information from multiple contractors that Services Australia declined to comment on.

At the end of November last year, the agency said “up to 1000 ICT contractors” were impacted.

That “up to 1000” figure was clarified at senate estimates to be the number of “full-time equivalents to a public servant”.

Many contractors do not work on a full-time equivalent basis, however, meaning the actual headcount reduction of contractors was higher, at “around 1245”, chief information and digital officer Charles McHardie said.

Under questioning from independent senator David Pocock, McHardie said “there’s no plan to let any further contractors go this year”.

Asked to reconfirm that more reductions would not occur before the end of the financial year, McHardie said “Not at this stage”.

McHardie said the agency had now drawn up an “integrated work plan” to resource planned works through to “the end of the year”.

“These are what we call registered projects, mainly to assist government with legislative change,” he said.

“We’ve got two major software releases coming up, one in March and then we also have one before the end of the financial year, so we’ve got a workforce that’s ready to deliver on all of those projects.”

McHardie said that contractors would continue to work on myGov and to "assist [with] the stability and security of our systems as well.”

As to what happened to the “around 1245” contractors no longer required, McHardie said “many … went back to their parent firms and were then rehired onto other projects.”

Some may also be brought in-house as “non-ongoing public servants” - which he characterised as a contract arrangement “to see if they like life as a public servant, whether it works for them and us”.

“About 140 names have come forward,” he said. “We aim to transition them into the public service.”

Services Australia is now close to a 70/30 ratio of public servants to contractors; McHardie said the ratio is 67/33, down from a high of 52/48.

In addition to reductions, Services Australia’s contractor workforce was stood down for six weeks over Christmas and New Year.

McHardie said that contractors were given “at least two weeks” notice of the stand-down arrangement. He said that contractually, the agency only needed to provide five days of notice.

“We complemented the reduction in contractors with a stand-down over Christmas which is standard practice, apart from the previous two years because of the huge amount of emergency work that we had on,” he said.

“Traditionally in the technology space at Services Australia and DHS [Department of Human Services] before that, we would normally have a four-to-six week stand-down over Christmas. 

“That would allow the contractors to have a break, allow the public servants that monitor and direct the contractors to have a break, and that’s what we exercised this year.”