11 Apr 2012

Consultant fees increase defended

5:25 pm on 11 April 2012

The Government has defended an increase in consultants' fees in the public sector as justified.

Figures from the Treasury on 35 agencies show overall spending on consultants was at nearly $189 million in the last financial year, up 8.4% in 2010.

The Labour Party says it shows the Government's efficiency drive is not working.

State services spokesman Chris Hipkins says its promise of a more efficient public service has resulted in many redundancies and the savings are being transferred into more expensive consultants.

Mr Hipkins says that, given all New Zealanders are being asked to tighten their belts, the Government needs to ask questions about the increase in spending.

But Finance Minister Bill English says since 2008, the increase in the cost of consultants has only been six point four percent - less than the rate of inflation for the period.

Mr English says there's been a lot of pressure on the public sector to change their technology and deal with events like earthquakes and finance company collapses.

He says while the public sector has a wide range of skills, it doesn't have every skill that's needed in a volatile world.

Housing NZ, MAF big spenders

The Treasury figures show two departments have more than trebled their expenditure in the past year.

Housing New Zealand's spending on consultants increased from $8.5 million in the year ended June 2010 to more than $20 million for the 2011 financial year.

Expenditure on consultants by the Ministry of Agriculture and Forestry rose over $3 million in 2010 to $12.5 million in 2011.

The Treasury's own spending has increased again - from over $5 million in the financial year ending June 2010 to $8 million last year.

The figures do not include the New Zealand Transport Agency, the ministries of Economic Development and Education, the Department of Conservation and Te Puni Kokiri.

The Treasury data was provided to blogger Keith Ng under the Official Information Act.