19 Nov 2023

MBIE spending on consultants on the rise again

5:03 pm on 19 November 2023
Ministry of Business, Innovation and Employment

Photo: RNZ / Alexander Robertson

A major ministry's spending on the Big Four consultancies is back to where it was two years ago, after a jump higher in the intervening year.

Overall since 2016-17, the Ministry of Business, Innovation and Employment has spent $40 million on services from PwC, KPMG, Deloitte and Ernst and Young (EY) - known worldwide as the 'Big Four'.

PwC leads the pack with $14.6m and KPMP about a million dollars behind. The other two earned around $6m each in that period.

The exposure six years ago of super spending by MBIE on contractors and consultants, far ahead of what was easily decipherable in its public reports, sparked government intervention aimed at more transparency.

Since then, the ministry's total spend on this has risen from about $80m, to hover for some time around $100m a year.

For the Big Four, what began at just $3m in total outlay in 2016-17, had by 2020-21 about doubled (allowing for inflation), then risen still further to $10m last year - a Covid hangover, officials have said - before settling back to $7.7m in 2022-23.

"As part of MBIE's financial sustainability, we have a focus on reducing reliance on contractor and consultant resource," the ministry said in its Official Information Act response to RNZ.

"Some contractor and consultant spend continues to be required to deliver on government priorities, invest in ICT programmes for work and respond to national and international emergencies.

"We also use contractors and consultants to meet demand to implement short-term projects and initiatives, where we do not have the inhouse capability available or where needed to temporarily backfill to release specific capability to deliver on key government priorities."

National campaigned on cutting contractor and consultant spending across the wider public sector of more than 100 agencies by $400m.

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