$1bn spend on consultants each year
Labour’s spending on contractors and consultants has climbed to nearly $1bn a year, despite Labour coming to power suggesting that they would rein in this use of the private sector.
Much of this is spent on the “Big Four” contractor firms – Deloitte, PwC, KPMG and Ernst and Young. These firms have had a bonanza in recent years, making good use of various government reforms to offer their consulting services.
At the end of last year, the Public Service Commission released information showing that $939m had been spent in the last year on consultants by government agencies. Of the 34 government departments, 20 had increased their expenditure on consultants. IRD had reduced theirs significantly.
According to the Public Service Commission, this near-$1bn figure compared to a spend of $550m when Labour took office in 2017. But even this figure that Labour inherited from National was this was also a big increase from $278m in 2009.
The Ministry of Health is responsible for one of the biggest increases in consultants, from $19m in 2019 to $53m in 2021. The Covid pandemic might well explain much of that. But there has also been something of a mania for spending on comms and consultants in the health area. Health commentator and former health unionist, Ian Powell, has commented: “In the over 30 years I’ve been involved in the health system I’ve not seen a government more dependent on and influenced by business consultants since the earlier 1990s when the National government attempted to run the system on competitive business principles.”
Comms expenditure and the case of Waka Kotahi
There has been a huge increase in public relations staff hired under the Labour Government. According to a Newshub report a few weeks ago, when Labour came to power there were 339 communications staff working in public sector agencies. By 2021 this has climbed nearly 50% to 497. Similarly, the budget for government “spin”, had gone up from $33.8m in 2017 to $55.3m in 2021.
Transport New Zealand has rebranded as Waka Kotahi under Labour, and the government department has also been singled out by critics as epitomising the trend for prioritising communications over delivery.
The numbers of comms staff have massively increased in the agency. In 2017 there were 32 staff in the PR team, but by 2021 this had increased to 88. According to news reports, 65 of these comms staff earn over $100,000.
Critics believe the focus on advertising and public campaigns has come at the expense of improving roads. According to Newshub, “Since 2019, the transport agency’s spent $145 million on consultants, covering things like the environment and planning, versus just $200 million on actual construction.”
The agency has also launched its controversial “Road to Zero” campaign with the aim of reducing fatalities and serious injuries to zero by 2050. It has a $15m advertising campaign for this, including some highly-expensive illuminated “zero signs” to be used at media events.
Critics point out that in contrast, the agency isn’t actually delivering safe roads. According to writer Danyl Mclauchlan, “Waka Kotahi have only installed a fifth of the median barriers they were supposed to, and fewer than a fifth of the side barriers. There are numerous media reports about worsening road conditions around the country.”
State capacity being taken up by a “Professional Managerial Class”
The quote by Mclauchlan is from an essay he published on Sunday, titled An administrative revolution. In this important analysis of the rise of comms and PR focus of government, he argues that those who make up the political class and associated Wellington industries have a financial interest in focusing resources on bureaucracy instead of delivering results to the wider public.
Here’s one of the key paragraphs: “It’s almost as if the primary role of the administrative state is shifting from serving the people to the redistribution of wealth to the staffers, lawyers, PR companies, managers and consultancy firms that work in them, or for them. A billion dollars a year in public sector consultancy is an awful lot of money when you’re running out of teachers and nurses because you don’t pay them enough, and the fire trucks are breaking down.”
And commenting on Mclauchlan’s thesis, political commentator Liam Hehir has added that Waka Kotahi “has also spent millions of dollars on advertisements, like this one, which contain no express public safety message but which celebrates the work of… Waka Kotahi. It spends lavishly on functions for road openings while existing roads around the country continue to deteriorate.”
The suspicion is that such agencies need to spend more on consultants and PR so they can explain why they aren’t delivering what the public expects. Waka Kotahi now has enough staff to explain to the public why roads aren’t being built, or at least to why more isn’t being done to make them safer.
Then of course there is the increased government spend on advertising. The most controversial has been the Three Waters ads, which unsuccessfully tried to convince the public of the proposed reforms using emotion and fear. Well over $3m was spent on the campaign, including large amounts on consultants to come up with the concepts.
The expansion of consultants and comms staff is something that needs much more scrutiny and debate. We are creating an extensive and dominating “PR industrial complex” as part of our governing arrangements. As journalist Dileepa Fonseka recently put it in terms of Wellington consultants, “There are three branches of government: the legislature, the judiciary and MartinJenkins.”
According to Fonseka, some critics regard the use of consultants as “a rort on the taxpayer, running up eye-watering bills to come up with ideas that several years down the track often end up binned or mired in delays”, while others see them as “a symbol of a hollowed-out public service: consulting firms promise quality, independent advice – but isn’t that what the public service is supposed to provide?”
The more immediate problem in 2022 is simply that the PR and consultant bonanza represents a failure of delivery. We have been promised major action on poverty, inequality, climate change, housing unaffordability, and so much more. The “Year of Delivery” promised by Ardern in 2019 seems to have evolved into “Many Years of Consultation and Spin”.
At the end of last year, the Public Service Commission released information showing that $939m had been spent in the last year on consultants by government agencies. Of the 34 government departments, 20 had increased their expenditure on consultants. IRD had reduced theirs significantly.
According to the Public Service Commission, this near-$1bn figure compared to a spend of $550m when Labour took office in 2017. But even this figure that Labour inherited from National was this was also a big increase from $278m in 2009.
The Ministry of Health is responsible for one of the biggest increases in consultants, from $19m in 2019 to $53m in 2021. The Covid pandemic might well explain much of that. But there has also been something of a mania for spending on comms and consultants in the health area. Health commentator and former health unionist, Ian Powell, has commented: “In the over 30 years I’ve been involved in the health system I’ve not seen a government more dependent on and influenced by business consultants since the earlier 1990s when the National government attempted to run the system on competitive business principles.”
Comms expenditure and the case of Waka Kotahi
There has been a huge increase in public relations staff hired under the Labour Government. According to a Newshub report a few weeks ago, when Labour came to power there were 339 communications staff working in public sector agencies. By 2021 this has climbed nearly 50% to 497. Similarly, the budget for government “spin”, had gone up from $33.8m in 2017 to $55.3m in 2021.
Transport New Zealand has rebranded as Waka Kotahi under Labour, and the government department has also been singled out by critics as epitomising the trend for prioritising communications over delivery.
The numbers of comms staff have massively increased in the agency. In 2017 there were 32 staff in the PR team, but by 2021 this had increased to 88. According to news reports, 65 of these comms staff earn over $100,000.
Critics believe the focus on advertising and public campaigns has come at the expense of improving roads. According to Newshub, “Since 2019, the transport agency’s spent $145 million on consultants, covering things like the environment and planning, versus just $200 million on actual construction.”
The agency has also launched its controversial “Road to Zero” campaign with the aim of reducing fatalities and serious injuries to zero by 2050. It has a $15m advertising campaign for this, including some highly-expensive illuminated “zero signs” to be used at media events.
Critics point out that in contrast, the agency isn’t actually delivering safe roads. According to writer Danyl Mclauchlan, “Waka Kotahi have only installed a fifth of the median barriers they were supposed to, and fewer than a fifth of the side barriers. There are numerous media reports about worsening road conditions around the country.”
State capacity being taken up by a “Professional Managerial Class”
The quote by Mclauchlan is from an essay he published on Sunday, titled An administrative revolution. In this important analysis of the rise of comms and PR focus of government, he argues that those who make up the political class and associated Wellington industries have a financial interest in focusing resources on bureaucracy instead of delivering results to the wider public.
Here’s one of the key paragraphs: “It’s almost as if the primary role of the administrative state is shifting from serving the people to the redistribution of wealth to the staffers, lawyers, PR companies, managers and consultancy firms that work in them, or for them. A billion dollars a year in public sector consultancy is an awful lot of money when you’re running out of teachers and nurses because you don’t pay them enough, and the fire trucks are breaking down.”
And commenting on Mclauchlan’s thesis, political commentator Liam Hehir has added that Waka Kotahi “has also spent millions of dollars on advertisements, like this one, which contain no express public safety message but which celebrates the work of… Waka Kotahi. It spends lavishly on functions for road openings while existing roads around the country continue to deteriorate.”
The suspicion is that such agencies need to spend more on consultants and PR so they can explain why they aren’t delivering what the public expects. Waka Kotahi now has enough staff to explain to the public why roads aren’t being built, or at least to why more isn’t being done to make them safer.
Then of course there is the increased government spend on advertising. The most controversial has been the Three Waters ads, which unsuccessfully tried to convince the public of the proposed reforms using emotion and fear. Well over $3m was spent on the campaign, including large amounts on consultants to come up with the concepts.
The expansion of consultants and comms staff is something that needs much more scrutiny and debate. We are creating an extensive and dominating “PR industrial complex” as part of our governing arrangements. As journalist Dileepa Fonseka recently put it in terms of Wellington consultants, “There are three branches of government: the legislature, the judiciary and MartinJenkins.”
According to Fonseka, some critics regard the use of consultants as “a rort on the taxpayer, running up eye-watering bills to come up with ideas that several years down the track often end up binned or mired in delays”, while others see them as “a symbol of a hollowed-out public service: consulting firms promise quality, independent advice – but isn’t that what the public service is supposed to provide?”
The more immediate problem in 2022 is simply that the PR and consultant bonanza represents a failure of delivery. We have been promised major action on poverty, inequality, climate change, housing unaffordability, and so much more. The “Year of Delivery” promised by Ardern in 2019 seems to have evolved into “Many Years of Consultation and Spin”.
Dr Bryce Edwards is a politics lecturer at Victoria University and director of Critical Politics, a project focused on researching New Zealand politics and society. This article was first published HERE
2 comments:
Those who can DO, those who can't talk about it endlessly, make hollow promises and smile a lot...while spending almost as much but achieving nothing.
Ardern and Co to a T!
Reminds me of the song:
And now we're Spinning, spinning, spinning
Through this magic land
Heading back to the beginning of the end!
What a disgrace, and just like 'Lets Get Wellington Moving' tens of millions spent on consultancy and well under a million of actual work in place.
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