NSW Education pays Deloitte $9.1m to write documents for NSW Treasury

The NSW Department of Education is paying Deloitte almost $10 million a year to develop internal funding documents for NSW Treasury, despite claims that the public service is capable of completing the work “many times over”.

Under the $9.1 million contract, the big four consultancy will help the department create “business cases” for funding approval for school upgrades or new builds that meet Treasury-mandated requirements.

The outsourcing of this work, which involves creating internal documents on an ongoing basis and historically, would be completed internally, builds on criticism that the NSW government is outsourcing swathes of work at “exorbitant” prices despite promises to protect public service jobs and cut costs amid a record budget deficit.

Shadow Education Minister Prue Car slammed the move as failing “the pub test” for engaging consultants.

“It’s a huge price to pay for something that the department should be doing and can do,” she said.

“It’s a huge amount of money for relatively small projects for internal government work in a department that employs hundreds of staff.

“One of the most crucial things that the Department of Education is tasked to do is build and upgrade schools so it’s got to be a constant requirement for the department to present business cases to Treasury to do that.“

She noted that the Deloitte contract was worth more than some of the school upgrades the firm would be completing business cases for, and that there were still over 20 schools waiting for promised works.

Analysis by NSW Labor, and reported by The Sydney Morning Herald, revealed last month that the government paid the big four consultancies almost $93 million last year in a $10 million jump on the year before.

Public Service Association General Secretary Stewart Little said that the expertise to complete this work already exists “many times over” within the NSW Public Service and that public servants  “are ready to do the work”.

“There are serious questions about this contract – what will this $9.1 million get us? Who within the department are they working with? Why will it take two years? Why do people in this area not already know how to do this work? Why can’t Treasury help with this work?” he said.

He warned that the $9.1 million fee was “exorbitant” and that the continued use of consultants over public servants would weaken government transparency.

”When you hire a consultant, you’re paying for the answer you want,” he said.

“It means the taxpayers of NSW don’t have a robust public service holding politicians to account, but rather are paying multi-million dollar contracts to consultants who operate with limited responsibility and no transparency.”

A 2019 review into the federal government’s growing use of consultants by former Telstra chief executive David Thodey found that they were increasingly being used for work that had “previously been core in-house capability”.

The Australian Financial Review understands that Deloitte typically only completes smaller jobs, usually focused on staff efficiency and job cuts, for the NSW public service for significantly smaller sums.

Mr Little also questioned why the government was outsourcing expensive internal work at the same time as freezing public sector wages as part of a broader belt tightening.

“[Treasurer Dominic] Perrottet promised the government would go on a hiring spree – it seems he was only thinking of consultants,” he said.

Ms Car added: “As we recover from the pandemic, we should be doing everything we can do to be keeping people in meaningful employment and not outsourcing work at a premium cost to the taxpayer.