Prime Minister Chris Hipkins has cast doubt on National’s ability to cut the Government’s consultant spending to pay for its childcare policy by saying that much of this money has already been spent.

Hipkins also hinted that he might ditch or loosen the Government’s public sector “wage restraint”, better known as a pay freeze, which had been blamed for public servants quitting only to be hired back as consultants at a higher rate (although Hipkins denied this was happening).

National leader Christopher Luxon took aim at the consultant spend on Labour’s working groups, but would not rule-out setting up working groups of his own if he won the election.

He said that these would be staffed in-house, however.

“A lot of the Covid response relied on temporary workforce is the Government’s position that we have invested in rebuilding the capability of the public sector and we would expect and we would expect to see less spending on consultants and contractors in the future as a result of this,” Hipkins said.

When asked how the Cyclone Gabrielle cleanup could be achieved without using transport contractors, Hipkins said this was a challenge.

“One of the challenges is if you look at the areas where consultants and contractors tend to dominate the workforce, it is in areas where we’re going to need to be doing more - that includes things like rebuilding roads, rebuilding schools, rebuilding hospitals,” Hipkins said.

Hipkins said the rule he would apply to consultant spending was “should there be the capability in-house to do this without having to bring in a consultant or contractor?, if the answer to that is ‘yes’ then I would expect them to do it in-house”.

Hipkins cited the example of business cases on new projects and gateway reviews. These have become common following the Novopay disaster in which a payroll system that was not ready was rolled out across schools, causing widespread disruption including teachers not being paid.

Public service departments now “gateway review” systems before rolling them out, testing them to make sure they are ready.

Hipkins said that this was often done by contractors and consultants, but he believed the public sector should be able to do some in-house.

“If you look at some of the areas where we’ve seen growth [in contractors and consultants]: the business case processes and the gateway review processes which are designed to avoid things like Novopay. They’re good processes but they are at the moment, they rely on external consultants to do that work when I think they could probably be done in house,” Hipkins said.

The Government’s contractor and consultant spend is now at $1.7 billion a year, National has promised to cut $400 million from that to pay for its $249m childcare policy.

Contractors and consultants have been employed on the Government working groups.

National Party leader Chris Luxon. Photo / Alex Burton

Luxon would not commit not to appointing any working groups of his own were he to win the election, but he said he wanted to “build that capability into the public service - not having it outsourced to consultants”.

“We are going to be in a turnaround job when we get to Government on October 14 and I want each of my ministers to be ready to go on day one and I want each of my ministers to be ready to go,” Luxon said, although he would not rule out using working groups and taskforces himself.

Both Hipkins and Luxon mused on ending the public sector pay freeze, which has been blamed for forcing people out of the public service in search of higher pay.

“There has been a period of wage restraint within the public sector where we have asked for the pay increases to be directed to those who are on the lower incomes and we have seen the gap between the lowest income earners in the public sector and the higher income earners in the in the public sector closing.

“That has been a good thing.

“But I also acknowledge that public sector wage growth has been lagging behind private sector wage growth and there is some anxiety about that,” he said.

Luxon said he could talk about ending the wage restraint.

“I’m very comfortable at making sure that people are fairly remunerated in the public sector,” Luxon said.

“I personally think there is an opportunity for us to think about whether it should end,” he said.