Unions fear government spending on consultants could skyrocket after it was revealed that the bill hit $375 million last financial year – and John Key warned of “significant” restructuring to come.

The Government spent more than $375 million on consultants and contractors in 2010-11 as a series of government restructurings made thousands of public sector workers redundant, figures show.

Consultants were paid as much as $275 an hour or $2500 a day, according to figures released by 31 government departments and agencies under the Official Information Act.

Some departments are increasing spending on consultants while getting rid of workers who, across all the departments involved, make an average of $33 an hour based on a 40-hour week.

The $375 million is lower than the $400 million the same departments spent in 2008-09, Labour’s last year in power.

Cabinet minister Tony Ryall said consultants were used only when it did not make sense to have permanent staff – for example on short-term projects or schemes needing particular technical skills.

This “expertise” had helped government departments respond to change, he said. “[But] over time I would expect that the costs associated with buying in this expertise would go down.”

However, Richard Wagstaff, national secretary of the Public Services Association, said the $375 million was “significantly” higher than the $335 million the same departments had spent in 2009-10, National’s first year.

That showed departments had lost “a lot of institutional knowledge” when 2000 public sector workers were made redundant under National, and faced “desperate capability and capacity problems”.

The Prime Minister’s promise of “significant” restructurings next year would mean further public sector job cuts and even more consultants employed, Mr Wagstaff said.

It was “extraordinary” that some departments were spending more on consultants despite shedding in-house staff, he added.

Since 2008, the Ministry of Economic Development has increased spending on consultants by $12 million – enough to pay for 161 in-house workers – and made 29 staff redundant.

In a statement, the ministry said the increased spending was due to several major IT upgrades and work on new projects including the Rugby World Cup, the national cycleway and the emissions trading scheme.

Similarly, the Ministry of Foreign Affairs and Trade more than doubled its spending on consultants, from $4.5 million to $9.8 million, while shedding 14 staff. Its biggest increases came in HR, information and public affairs, and property management.

Other departments to increase consultancy spending but shed staff included the Ministry of Transport, Te Puni Kokiri and the Ministry of Health.

Mr Ryall said consultants were not used to replace staff made redundant. But Mr Wagstaff said many consultants were former public sector workers “doing the same thing they used to do, but for a lot more money”.

Some spending on consultants was appropriate, he said, “but they shouldn’t be doing things that departments could do for themselves and which would be cheaper in the long run for departments to do”.

The figures released by departments under the Official Information Act show government consulting can be a lucrative business. Department of Internal Affairs figures reveal it paid consultants Citrix $275 an hour for advice on “identity services”.

It also paid IT firm Silverstripe $2,500 a day for work on data.govt.nz, a project to give the public easier access to government statistics.

Meanwhile, Housing New Zealand paid accounting firm Deloitte $4.2 million in one year to work on projects including an “affordable housing owners’ forum”.

In the election campaign, then Labour leader Phil Goff attacked National’s plan to pay Australian investment bankers Lazard $100 million for advice on its plan to part-sell state assets.

And the Herald reported in September that the Department of Corrections has hired 18 different firms of advisers for a planned privately run prison in Auckland, at a likely cost of $11 million.

A State Services Commission report from July this year backed some of the concerns expressed about consultancy spending.

The commission’s reviews of government departments found that they needed to adopt “an approach of recruiting skilled personnel … to build internal capability and progressively lessen the reliance on contractors”.

Otherwise, they risked losing vital knowledge about how to carry out their work, which they would then have to buy in.

First published in The New Zealand Herald

Ngatikaura Ngati died after horrific abuse by his parents. Children’s advocates are appalled that pictures of a young Auckland boy killed by his parents were posted on a pornographic site featuring beheadings, impalement and necrophilia.

Ngatikaura Ngati died in 2006 after horrific abuse by his parents, who were convicted of his manslaughter.

Pictures of his dead body were controversially released by the trial judge in 2007 to publicise the harm caused by child abuse.

In February this year, the pictures were posted on a website that contains pornography and graphic images of violent deaths.

Victims’ rights campaigner Rachael Ford, who came across the images this week while researching the case of Ngatikaura Ngati, said the site was disturbing.

The website, which the Weekend Herald has decided not to name, claims to be educational and to “wake people up to the reality” of violence.

However, it contains pictures of necrophilia and naked women being impaled, and comments by readers make it clear they find the material sexually arousing.

The pictures of Ngatikaura were published next to explicit images of hardcore pornography.

The website, which is based overseas, also runs caption competitions encouraging readers to make fun of people who have died violent deaths.

At the time the pictures were released, the then Children’s Commissioner, Cindy Kiro, attacked the move, saying that once the images were placed on the internet, there was no way of controlling who saw them or how they were used.

Dr Kiro also said it was abhorrent that the pictures were then circulated in an email petition calling for tougher action on child abuse.

“Circulating them allows for further abuse in the death of a child who was abused in life. It is abhorrent to have them circulated in this way.”

The present Children’s Commissioner, Dr Russell Wills, was not available for interview. But in a statement, he said he was “appalled to learn that images of Ngatikaura Ngati have been used on this website”.

He had referred the matter to the Department of Internal Affairs and the police, and said he would continue to monitor the issue.

At the time the pictures were released, Inspector Richard Middleton, who led the police case against Ngatikaura’s parents, said publishing the photos could have a positive effect and help to prevent further abuse.

This week he stood by that view.

First published in The New Zealand Herald

Government agencies twice failed to act on calls for more research that could have helped Christchurch prepare better for February’s fatal earthquake, victims’ families have claimed.

The families say the agencies “didn’t do the right things” and missed several chances to identify high-risk areas and strengthen key buildings.

They say the first opportunity was missed in 2005, when consultants Opus urged Environment Canterbury to model a magnitude 7 earthquake “on a hidden earthquake source close – say 10km to 20km – to Christchurch”.

February’s earthquake was a magnitude 6.3 tremor on a buried fault around 9km from the city centre.

Environment Canterbury’s director of investigations and monitoring, Ken Taylor, said most of the Opus recommendations were taken up by Crown research institutes GNS and Niwa in a project called Riskscape.

Riskscape models the danger posed by earthquakes, tsunamis and other hazards across the country, but is not yet complete.

Jim Cousins, a GNS scientist who has worked on Christchurch earthquake modelling, said he did not think the Opus recommendation had been carried out. “If it had been done, I would have probably known about it.”

In response to an Official Information Act request, Environment Canterbury indicated it had commissioned further research on hidden faults in 2008, but was unable to explain what use it had made of it.

The agency said it “has tested the prototype Riskscape model, but has not used it to run risk assessments”.

Rachael Ford, whose uncle died in the February 22 quake, said the agencies’ response was inadequate.

“This research should have been done,” she said. “And if it had been, I think there would have been a far better mindset around preparation.”

However, Mr Cousins said even if the modelling had been carried out, a major earthquake might still have been regarded as unlikely and not planned for.

“It would have suffered the same difficulty as other modelling – it would have been given a very low probability.”

Ms Ford also claimed authorities missed a second chance to prepare for February’s earthquake, which killed 181 people.

After the September 2010 earthquake, GNS applied to the Canterbury Earthquake Recovery Commission (Cerc) for funding to carry out a study of hidden faults under Christchurch.

At the time a leading geologist, Geotech Consulting’s Dr Mark Yetton, told a Christchurch newspaper that money spent on “good quality, modern seismic surveys” had been needed “for quite a while”.

However, Cerc was wound up and replaced by the Canterbury Earthquake Recovery Authority before it had a chance to process funding applications. GNS’ resubmitted application was approved only after February’s earthquake.

Ms Ford said it showed agencies “just haven’t done the right things”.

“What they should have done, and what’s been done in other cities that have suffered earthquakes, is have the blind faults studied.”

GNS scientist Kelvin Berryman said the application had suffered “a bit of bureaucratic hurdles and go-slow”, though it had been “expedited quite quickly” after February’s earthquake.

However, even if approved immediately, the research might not have been completed before February, and would only have been indicative, he added. “We weren’t going to stop an earthquake happening even by finding out there were faults there.”

Ms Ford also claimed authorities had failed to create a detailed earthquake risk map of Christchurch, as was done in parts of California following a major earthquake in 1971. Such a map might have revealed that buildings in certain areas needed further strengthening or other action, she said.

Mr Berryman said that despite February’s earthquake, Christchurch was an area of low seismic activity. Limited resources meant detailed mapping had inevitably been concentrated on areas of greater risk, such as Wellington, he said.

First published in The New Zealand Herald

The Government will spend $11 million on consultants and $10 million on internal costs before they start building a new prison in Auckland.

Department of Corrections documents released under the Official Information Act show it is already employing 18 companies, including accounting firm PricewaterhouseCoopers and British lawyers Allen & Overy, to help oversee the deal.

The 960-bed prison will be a public private partnership (PPP), in which a private company pays for, builds and runs the facility.

The Corrections Department’s own analysis say this may cost more than a publicly owned prison.

Corrections deputy chief executive Christine Stevenson said costs were high because it was New Zealand’s first PPP prison.

The consultants would provide “specialist technical advice” and outside scrutiny.

But the Corrections Association, which represents prison officers, said the consultants were “hired guns” who offered little value.

“They quickly work out what the payer wants them to say and they research to that,” said the union’s president, Beven Hanlon.

Ms Stevenson refused to say how much a public prison would have cost to set up, or put a figure on the prison’s total construction cost. Internal Corrections documents suggest it could be about $300 million.

PPP schemes overseas have been criticised for employing large numbers of lawyers, accountants and consultants.

The Haringey local council in London spent £24 million ($46 million) on consultants before it started its school-building programme.

Conservative MP Richard Bacon told the Financial Times this year: “It is clear that [PPP] has spawned an entire industry of advisers who have done extremely well out of it.”

Corrections’ business case says the costs of a PPP “will be higher” than those of a public prison, because private companies pay more to borrow money and need to make “commercial returns”.

The deal will be cheaper only if the company can run the prison 10 to 15 per cent cheaper than the department.

The Corrections Association said a private firm would “most definitely” make savings by cutting staff and wages, putting prison safety at risk.

Three consortiums, all headed by Australian security firms, have been shortlisted for the contract, expected to be signed by July.

The numbers:

• $11 million sum the Government will spend on consultants for the new men’s prison at Wiri
• $10 million sum spent on internal costs before the prison is built
• 18 companies employed by Department of Corrections on the project
• 960 number of beds proposed new prison will have

First published in The New Zealand Herald