Services Australia will finish the year with up to 1000 fewer ICT contractors, which the agency attributes to the end of several large programs and associated labour hire agreements.
The agreements are understood to include - but may not be limited to - the likes of SAP Australia, Modis and Accenture, whose deal was twice extended and tripled in value.
Until recently, Services Australia was second only to Defence in terms of the size of its outsourced ICT workforce.
It has had a roughly 50-50 ratio of APS employees to contractors for several years, though has set a goal to work towards a 70-30 split by 2025.
iTnews understands that Services Australia started informing contractors mid last month that they would no longer be required.
Various figures for the total reduction in contractor numbers were sighted by iTnews; the agency’s official number falls somewhere in the middle of the range.
Services Australia general manager Hank Jongen told iTnews that the expired - and expiring - contracts “were for the provision of specialist ICT expertise to support Services Australia’s response to the Covid pandemic and the delivery of major projects such as the Welfare Payment Infrastructure Transformation (WPIT) and the Residential Aged Care Funding Reform."
“These projects have now come to an end,” Jongen said.
“This means up to 1000 ICT contractors are ceasing over the next few weeks.
“All impacted contracts will end in line with the relevant terms and notice periods.”
Jongen said that the impacted contractors “have provided specialised expertise and advice through a challenging few years.
“They’ve supported us to significantly bolster our ICT systems to meet unprecedented demand on our systems and services during emergencies such as the pandemic, and we thank them for their work,” he said.
While noting that the contractors were landing back in a hot job market - “these contractors are highly skilled professionals, working in a high demand field in the current tight employment market”, Jongen said additional support was being offered, “both directly and through their employment provider”.
“We’ve also reached out to other APS agencies who may be in a position to offer new opportunities,” he said.
Broader reductions
The changes at Services Australia come amid a broader push by the government to reduce reliance on consultants across the Australian Public Service (APS).
A Labor-led Senate inquiry last year recommended that the government end its unhealthy reliance on IT contractors and instead properly resource the APS to become a digital leader in its own right.
An audit was commissioned last month to understand the extent of outsourcing across the APS.
However, regardless of the outcome, the government intends to reduce its use of contractors and consultants and keep interesting work in the hands of APS employees.
There are indications that multiple large agencies - including, but not limited to, Services Australia - have been asked to trim ICT contractor numbers under the broader government objective.
Defence, which has a particularly large number of ICT contractors compared to APS staff, would not be drawn on whether it has an immediate reduction target.
“Defence operates under the workforce policies set by government,” a spokesperson told iTnews.
“Defence is assessing options to respond to [the] government’s commitment to review the utilisation of the contracted workforce across the Commonwealth.
“However, an integrated workforce, including the Australian Public Service, Australian Defence Force and contractors, continues to be a critical enabler of delivering Defence outcomes.”
Comment was being sought from other agencies at the time of publication.
