The closing down of the federal outsourcing honey pot has hit consultants, recruiters and tech vendors hard, with contracts down by a third as part of the Albanese governments battle to reign in external spending.
, PwC’s order book has taken a beating, down 42 per cent from $331 million in FY22 to $193 million in the year to date.PwC won orders in May of $8.4 million, including a $5.5 million classification contract with the Independent Health and Aged Care Pricing Authority. Its monthly run rate of federal public sector contracts in the four months since the confidentiality scandal erupted in late January has averaged around $9.6 million. This compares to $22.4 million for the same period last year.
Big four firm Ernst and Young has had a smaller fall than its peers, with contracts won in 2023 down by 36 per cent from $225 million in FY22 to $143 million in the first 11 months of this fiscal year. Labor has announced $10 million is to be used for a new inhouse consulting unit as part of an election to make external labor savings of $3 billion. Amid ministerial claims the previous government had created a 54,000 strong shadow work force, an audit of 2021-22 engagements identified that about 25,000 were contractors and labour hire.
Only 954 workers, or 1.7 per cent, of the shadow workforce was attributable to consultants and most of these were concentrated in four agencies and many working on technology modernisation.The dramatic pullback in consulting and contractors has also resulted in the major technology integrators and developers losing work.
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