Contractors and consultants: management

Why this is important

There is significant public interest in how much the public service spends on contractors and consultants. Our 2023 report Contractors and Consultants in the Victorian Public Service: Spending raised concerns about how resourcing and expenditure decisions are managed and reported.

The Victorian Government’s spending on contractors and consultants increased by 47 per cent between 2018–19 and 2021–22. In 2021–22 alone, the total spend on contractors and consultants cost the state $4.2 billion.

Consistently outsourcing work that has traditionally been done by the public sector can deskill the Victorian Public Service. This can create significant long-term risks and lead to fewer opportunities for skills and capabilities to be developed internally. 

Additionally, these external services can cost significantly more than using public service employees. Effective management of contractors and consultants is necessary to ensure the government is receiving value for money for these outsourced services.

The Department of Premier and Cabinet's Administrative Guidelines on Engaging Professional Services in the Victorian Public Service, released in 2019, requires government agencies to consider the validity of their use of contractors and consultants. These guidelines are crucial in ensuring that agencies are taking necessary steps to minimise spending in this area.

What we plan to examine

We plan to examine how contracts and consultancies are being managed by the Victorian Public Service and the extent to which those management practices are consistent with the relevant guidelines.

Who we plan to examine

All departments.