APS tech recruitment failure casts $21 billion-long shadow workforce

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The vast majority of a huge $21 billion ‘secret’ and ‘shadow’ workforce of 54,000 used to understate Australian Public Service headcount numbers are simply IT contractors unwilling to take public service salaries at least $100,000 per year below current market rates.

That’s the raw and politically unfiltered story inside Audit of Employment within the Australian Public Service released over the weekend by the Department of Finance that found a whopping 27% of actual APS headcount — people drawing a wage — are from the so-called ‘coalition of the billing’.

While the audit results have been used by minister for finance and the public service Katy Gallagher to characterise the previous regime’s treatment of APS talent as a cash cow to give succour to union-busting outsourcers and permanency-eroding labour-hire firms, the real picture is far bleaker.

The Australian Public Service has now become so comprehensively beholden to outsourcers and contractors to run not just major tech renewal projects, but business-as-usual frontline IT services, there is now little realistic prospect of it attracting substantive permanent talent on its current graded salaries and classifications.

“The Morrison Government maintained its artificial cap on public servant numbers, promoting a mirage of efficiency, but were at the same time spending almost $21 billion of public money on a shadow workforce that was deliberately kept secret,” Gallagher roared in statements provided on Friday to favoured media outlets.

“While the Coalition pretended to cap the size of the public service, they were signing contracts by the billions to outsource work that still had to be done.”

“Scott Morrison and Peter Dutton went to great lengths to trick people into thinking this work could be done with a reduced workforce which [we] now know wasn’t possible,” Gallagher continued.

“Labor is committed to rebuilding the APS, its capability and ensuring that jobs that need to be done are delivered, where appropriate, by public servants.”

Note the “where appropriate” carve-out, because it’s a whopper.

Lost skills never returned

The Finance Audit of APS Employment numbers reveal there’s been plenty of pretending going on, on both sides of politics (aka politics as usual) with the Ossie the Ostrich ‘dang, never saw that coming’ award possibly best awarded to the APS Secretaries’ Board.

Politicised or otherwise, how you do not call out the massive loss of internal tech skills resulting in between a quarter to a third of APS headcount becoming some variation of a tech contractor? If this trend was genuinely missed, that’s even worse.

And before drilling down into the numbers, it’s worth pointing out there’s a history of serial denial about the relationship between employing technologists and effective service delivery the APS has assiduously ignored.

It started with the Keating-era Department of Administrative Services, went on through Howard with Max (the Axe) Moore-Wilton and whole-of-government outsourcing, and became truly entrenched following the Rudd government’s Gershon review (which somehow missed cloud, mobility and online transactions as game changers).

The Abbott government renewed the goal of outsourcing APS technical competency, briefly challenged by Turnbull, and was then promptly followed by Morrison’s pursuit of market-driven punitive solutionism.

Mind the gap

Centrelink’s greatest user-centricity project to date, robodebt, perhaps exemplified the utter lack of technical aptitude coupled with institutionalised compassion fatigue — even contempt — for clients that personified expedient innovation theatre.

Tax has valiantly pursued a more genuinely user-centric experience, but it is financially incentivised to do so, and people aren’t really asked if they want to pay tax as part of the social contract.

At least Tax has a statutory duty to collect public monies, as opposed to Centerlink that illegally tried to reinvent itself as a revenue recovery agency, rather than a distributor.

Yet it was only under questioning from ACT senator David Pocock at senate estimates in February that Services Australia chief information and digital officer Charles McHardie revealed his agency had been paying around $1,300 per day for IT contractors at APS level 5/6 level, roughly the equivalent of $280,000 to $300,000 per year.

This is the $100k tech salary gap. This is why so few people become full-time public service technologists. This is why 27% of real APS headcount are contingent. This is the nettle the secretaries board does not want to grasp, and is paying for at competitive commercial rates.

But the kicker is the Australian Public Service Hierarchy and Classification Review has firmly slapped down bid to create a specialist classification for technologists and digital practitioners essentially hobbling the APS from ever attracting a permanent cadre tech talent.

Outnumbered

So here’s the basic story in numbers, based on Finance’s audit. There’s a couple of (engineered) classification deviances, like the fact external labour is counted as Full Time Equivalent (FTE) versus APS permanent headcount as opposed to Average Staffing Levels designated by the APS for its staff.

The baseline looks like this:

• Total staff in the APS workforce within Audit scope(External labour (FTE) and ASL): 198,182
• External labour: 53,911
• Actual ASL: 144,271

Then there’s who the contractor hoarders boil down to. And Defence takes away the gong, big time, accounting for — wait for it — 34,296 of the total 53,911 outsourced jobs. Or 64 % of outsourced APS jobs.

Next comes Social Services, incorporating Services Australia, aka Centrelink, on 5,429, or 10% of outsourced APS jobs. It’s still a lot, but a massive drop. We are now at three-quarters of outsourcing, so hold that thought.

Agriculture is next on 2,643, potentially pointing to that agency’s major trade system re-platforming.

Then comes Home Affairs, at 1,694; Veterans Affairs, at 1,552; then Education, Skills and Employment, at 1,272; Industry, Science, Energy and Resources, at 1,272; and Health — that’s Medicare et al — at 1,065.

In terms of “External labour disaggregated by job family”, the biggest contributor by far is “ICT and Digital Solutions”, at 43% followed by “Service Delivery” (read: call centres and level-one support), followed by “Portfolio, Program and Project Management”, at 9%.

The latter two are not specifically tech bucketed by definition, but clearly contain tech-related outcomes.

Whichever way you look at it, this is the technical debt the APS has incurred over the last 20 years.

Gallagher has quantified the depth of the chasm. But not the way out, and this in itself should be a first-order, first-term priority given the APS’s rejection of allowing technologists into the fold of generalist clerks and administrators allowed to ascend the APS hierarchy into the Senior Executive Service.

Perhaps the most telling number is in Treasury, which includes Tax and which sits at just 943 external headcount and zero outsourcer jobs as opposed to 868 direct contractors. That’s less than 5% of Tax’s spruiked headcount of +20,000, suggesting that the agency has somehow managed to retain and grow its internal skills base.

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