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Consultants’ bill nearing $2m for cost-cutting work at the Department of Conservation

Kate MacNamara,
Publish Date
Tue, 28 Nov 2023, 5:00am
(Photo / File)
(Photo / File)

Consultants’ bill nearing $2m for cost-cutting work at the Department of Conservation

Kate MacNamara,
Publish Date
Tue, 28 Nov 2023, 5:00am

The cash-strapped Department of Conservation (DoC) has moved to “phase two” of a cost-cutting review and restructure that now entails an anticipated $1.76m bill for consultants.

In September, DoC hired Nimbl Consulting for an estimated cost of $1.3m, to review its systems and processes and to seek efficiencies. The work will take place within the current fiscal year and any implementation of recommendations is expected by July 1, 2024.

The consultants are expected to identify areas where current work programmes and operating expenses can be curtailed.

DoC deputy director general of organisational support, Mike Tully, said the review will look at what programmes the department might need to “stop, pause, or slow down”.

“This could have an impact on FTE numbers. Nothing is pre-empted, there’s a lot of work to do before any decisions are made.”

He said the department hired consultants because “this type of change needs capability that is not present in the department, with our current capacity and workloads”.

He also said many of DOC’s administrative processes are manual and time consuming, and Nimbl’s work will help simplify and modernise these.

The last Labour government and the new National-led coalition have indicated they want a significant reduction in public sector spending on outside consultants.

Paradoxically, however, hiring consultants is often the first thing public agencies do when faced with the need to cut spending.

The current review follows “phase one”, which began in April with a $103,500 piece of work by Nimbl to review DOC’s asset management practices and to identify improvements. This first phase also included PwC work worth $360,000 to analyse the agency's costs and forecast funding needs.

In late May, Tully warned the department’s managers and directors of a looming operating shortfall that ZB Plus understands is the tens of millions of dollars.

“To be transparent, the initial view shows that we do not have sufficient funding to cover our basic running costs. There is now urgent work under way to seek clarity on our position,” Tully wrote in an email that was leaked to the media.

In August, then Finance Minister, Grant Robertson, asked public service agencies to trim baseline spending by up to 2 per cent.

And DoC’s efforts at cost-cutting are now expected to take on more urgency because of the new National-led coalition government.

National’s fiscal plan, on which it campaigned, promised cuts to government spending, including reduced spending on “back-office bureaucracy”. It excluded the frontline agencies, health, education and Corrections, from this promise, but did not exclude DoC.

Incoming Finance Minister Nicola Willis has promised to ask public service agencies to look for budget cuts as deep as 6.5 per cent.

The Act Party, also part of the new Government coalition, hopes to cut 15,000 public sector jobs and shrink the sector’s head count to 2017 levels.

Tully said the main change arising from the restructure to date is the disestablishment of DoC’s national operations and regulatory services group (Nors).

Six roles were disestablished this month (two were vacant), and the group’s functions have been transferred to other areas of the agency.

The disestablished roles are deputy director-general (Nors), executive assistant (Nors), chief adviser (Nors), principal adviser (Nors), kaihautū (Nors), and director of planning and services.

Tully confirmed that severance payments were made to three departing staff “in accordance with their employment agreements”.

The department’s total budget sits at a record high. Appropriations this year top $880m, but budget projections fall heavily to $712m and $701m in subsequent years, largely because ring-fenced funding for time-limited work, such as Jobs for Nature, tapers and ends.

It’s worth noting that DoC’s baseline funding – its core funding available to run the business, which excludes time-limited funding, capital expenditure and the non-departmental money that DoC spends on behalf of the Crown – is hundreds of millions of dollars less than the headline figures.

Among those calling for reduced bloat in the department’s head and central offices is Eugenie Sage, former Conservation Minister (2017-2020) and Green Party member.

The agency’s most recent annual review figures show that staff positions (FTEs) rose from 2193 in 2017/18 to 2854 in 2021/22, an increase of 30 per cent. The proportion of “front line” staff declined in that time from 60 per cent of staff to 52 per cent.

DOC’s purview includes a third of the country’s land as well as protected marine areas, the backbone of the tourism industry including thousands of assets such as visitor centres, huts, trails, roads and bridges, and responsibility for threatened biodiversity.

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