The drive to privatise everything has led to consultants taking on the work of public servants. But at what cost? The controversy surrounding PricewaterhouseCoopers (PwC) has many asking whether the hundreds of millions of dollars government departments spend on consultants each year is the best use of public money. PwC is under intense scrutiny after it was alleged the firm misused confidential government tax information for commercial gain. It is alleged that, after the firm advised the government on tougher tax laws, it then leaked the design of those laws to its clients — many of whom would be targeted by the proposed laws. This is not the first time these kinds of questions have been raised. Three recent examples of this issue being explored include the Thodey review of the Australian Public Service, a 2017 Australian National Audit Office audit of Commonwealth departments’ use of consultants and contractors, and a 2014 audit by the Victorian Auditor-General’s Office. You could be forgiven for dismissing this matter as an insider issue of public administration best left to the boffins to thrash out. However, as the PwC scandal illustrates, the excessive use of consultants has very real implications for democratic decision-making. Indeed, many experts argue the influx of consultants represents a shadow government that is plundering the public sector. Some go so far as to say that it represents private control over public policy. It is therefore timely to consider why governments use consultants so much, why that might be a problem, and what we can do about it. The consulting industry can be traced to the father of so-called ‘scientific management’, Frederick Winslow Taylor, and his cohort of ‘efficiency engineers, which included such business luminaries as Henry Gantt, Lillian and Frank Gilbreth, and Harrington Emerson. This group could be considered the first management consultants. They were involved in advising the United States’ government on matters of efficiency, administration, or organisational design. In the US, for example, the Hoover Commission in 1947 hired two consulting firms to provide advice on reforms to public administration. Likewise, political scientist Denis Saint-Martin has described the 1960 Canadian Glassco Commission on Government Reorganisation as ‘by far the most impressive demonstration of the influence of consultants in government’ Consultants received a massive ‘shot in the arm’ through the introduction of a bundle of reforms collectively known as the new public management. This introduced into government: After its introduction, spending on consultants increased dramatically. In the UK, spending on consultants by the Department of Defence from 1993 to 2006 increased from £55 million to £256 million. Over the same period, spending by the Home Office increased from £3.81 million to £125 million — a change of 3,190 percent. New public management was introduced in the 1980s when the economic ideas of UK Prime Minister Margaret Thatcher and US President Ronald Reagan held sway. It represented a victory of private sector ideology over the public. The underlying logic was that the private sector knows best. Private sector management techniques were hypothetically introduced to produce better public sector outcomes. Whether new public management has done this or not remains a heated point of debate. At the very least, it has created an environment in which consultants can thrive. It’s also been a major contributor to the loss of expertise in government. As Professor Rod Rhodes described it many years ago, the state has been ‘hollowed out’. As a result, governments have turned to consultants more. However, this meant that public servants were not doing the necessary work to upgrade their skills and increase their expertise. The consultants were gaining that expertise and — for a fee — providing their advice to bureaucrats. Reliance on consultants became more and more entrenched, so now we are in a situation where consultants are seen as a ‘shadow’ public service. The presence of consultants on its own is not a problem. Decision makers throughout the ages have turned to advisors to assist with pressing challenges. Besides, the nature of governing today is far more complex than it was even a few decades ago. It is prudent, therefore, to turn to a range of different sources for advice — including consultants. And there are situations where very highly specialised or technical knowledge is required to support public decision-making. While the principle of consultants being part of governing today is sound, it is the practice that is a problem. There are four parts to this problem: definition, quantity, management and procurement.