19 Feb 2020

Govt department spends almost $100m on contractors and consultants in one year

7:20 pm on 19 February 2020

A major government department has failed to rein in its spending on contractors and consultants.

Stack of New Zealand Dollar

Photo: 123RF

New figures show the Ministry of Business, Innovation and Employment (MBIE) spent almost $100 million this way in the last financial year, 2018-19.

That's up $4m from the previous year's $95m despite a government edict in 2018 to the core public service to cut down on using contractors and employ more staff.

It also spent $95m in 2016-17, ann Official Information Act response shows.

MBIE said it used contractors when it was cost effective or its own staff lacked the expertise needed.

Its previous way of reporting such spending - which made it appear it was about half what it really was - triggered new rules last year to make reports from the core public service more transparent.

Many other government departments have reported increased spending on consultants and contractors, while at a few it has dropped.

Out of MBIE's seven business groups, the three with the largest C+C spend were Immigration NZ at $22m, Corporate Governance and information at $20.8m and Market Services at $19.5m.

These three were "responsible for many major projects", MBIE said.

Strengthened rules in 2018 mean now, all new contractors and contract extensions must be approved by a deputy chief executive in a business group, it said.

It aimed to used fixed-term employees instead of contractors "to ensure contractor use is targeted and to reduce MBIE's overall reliance" on outsourcing "in favour of building the internal workforce capability".

Annual reviews of other departments indicate that fixed-term contracts are being increasingly used.