Which departments failed to cut their consultancy spends

Last year, the Albanese government directed agency heads to identify areas to reduce taxpayer expenditure on contractors and consultants as part of Labor's crackdown on "inappropriate outsourcing."

Departments set savings targets worth a combined $527 million despite a handful opting not to include an outsourcing target in their corporate plans.

Agencies with relatively lower levels of outsourcing set far less ambitious targets and met their savings goals, while larger organisations struggled to rein in spending back into the public service.

Services Australia fell $6.7 million short of its own savings target of $9.3 million, resulting in a meagre reduction of $2.6 million in spending on outsourced services related to core work.

The agency stressed that this was in the context of "significant reductions" in the use of external labour hire.

"At the end of the 2023-24 financial year, the APS workforce constituted 85 per cent of total workforce expenditure, this was an increase from 69 per cent in 2019-20," an annual report said.

Services Australia entered into $2 million worth of new consultancy contracts in the last financial year.

The Department of Agriculture, Forestry and Fisheries said it achieved $4.2 million in savings against a $7.5 million target, due to "several challenges" including not having enough time to build up APS capability.

The Department of Veterans' Affairs fell $2 million shy of a $10.6 million savings target, reducing spending on outsourced services by $8.6 million.

The agency responsible for handling veterans' injury claims paid out $1.7 million to consultancies in the 2024-25.

Home Affairs aimed to bring $4.8 million of core work back in-house during the 2024-25 financial year, but only managed to trim $1.2 million.

Meanwhile, the Department of Defence, which spent over $132 million on consultants last year, chose not to disclose a savings figure in its annual report.

Defence instead declared that it "took steps to bring core work in-house" against a target of nearly half a billion dollars.

The ATO exceeded an eye-watering savings target of $31.9 million, reporting a reduction of $80.4 million in supplier expenditure.

"The reduction in supplier expenditure was partially offset by increased average staffing level costs related to bringing the work in-house," the tax agency said.

The Department of Industry, Science and Resources converted 11 contracts with a total $1.8 million of core work in-house.

The Attorney-General's Department met a target of $1.8 million by cutting outsourced contracts related to ICT and technical work.

A spokesperson from the Australian Public Service Commission (APSC) said overall the APS made "good progress."

"There is more to do and individual agency results are mixed," a statement said.

The APSC will publish an update by the end of the year to show collective progress across the APS.

It will include details of each agency's targets and progress.

Labor has pledged to save $6.4 billion in four years by reducing spending on consultants, contractors, labour hire and non-wage expenses like travel, hospitality and property.

While spending on the big four has decreased, the government has yet to indicate a significant overall reduction in spending, with a large number of consultancy contracts being awarded to smaller and mid-tier firms instead.

At the same time, the total number of public servants has increased, with the government estimating the average staffing levels for 2024-25 at 209,150.