Public Service Achieves Record Savings on Contractors and Consultants

Government Sets a New Standard in Efficiency with $800 Million Projected Savings by 2025.

New data reveals that the public service is poised to exceed its initial savings target for contractors and consultants by more than double, with savings expected to reach over $800 million by 2025, significantly surpassing the Government’s $400 million goal.

Minister for the Public Service, Nicola Willis, hailed the impressive savings as a sign of the Government’s commitment to efficiency and fiscal responsibility, stating, “The consultant gravy train is well and truly over.”

The Public Service Workforce Data – September Quarterly Update, released today by the Public Service Commission, shows that operational expenditure on contractors and consultants has fallen dramatically. In the 2023/24 year alone, the public service saved $274 million, and projections indicate further savings of around $500 million in the 2024/25 year.

“The public service has heard the message loud and clear. We’re prioritising internal expertise and focusing on delivering value to taxpayers,” Willis said.

Cultural Shift and Improved Public Service Efficiency

The data highlights a 46% reduction in contractor and consultant spending in the September quarter, following a 31% decline in the previous financial year. This marks a significant cultural shift within the public service towards greater reliance on internal talent and capacity.

“The public service is adjusting to a more sustainable model, reducing its dependency on external contractors and ensuring the skills and capabilities of our public servants are fully utilised,” Willis explained.

Public Service Workforce and Frontline Focus

The September Quarterly Workforce Data Update also reveals a 2.2% reduction in the size of the public service from September 2023 to September 2024, equivalent to 1,402 full-time equivalent (FTE) positions. Despite these reductions, the emphasis has shifted toward enhancing service delivery roles.

“We are moving the emphasis of the public service from the back office to the frontline, where it matters most,” Willis said.

Increased demand for frontline services is evident in the rise of specific job categories:

• Contact centre workers up 17%
• Inspectors and regulatory officers up 6%
• Social, health, and education workers up 1.5%

Meanwhile, there was an 11% reduction in clerical and administrative roles and an 8% decrease in policy roles.

Long-term Commitment to Public Service Reform

Nicola Willis stressed that while job reductions are difficult, they are necessary to ensure the Government can fund vital services such as health, education, and welfare.

“No government can live beyond its means indefinitely. We’re focused on ensuring public service growth is sustainable while maintaining the quality of services that New Zealanders rely on,” she said.

The Government’s ongoing push for greater efficiency is a reflection of its broader agenda to streamline operations and reinforce frontline services. Willis concluded, “We are making strong progress in building a more sustainable and effective public service that works for New Zealanders.”