Council cutting consultant costs, but won’t review relationship with PwC

The City of Melbourne is cutting costs on consultants but won’t reassess future contracts with PwC Australia in the wake of the tax leak scandal.

From January to May this year the council paid PricewaterhouseCoopers Australia $369,000 for its expertise on a number of separate projects, which included an internal audit and risk review.

The global consulting firm has been a key external resource for the City of Melbourne in recent years, and in 2020, conducted modelling on the economic impacts of COVID-19 on the city.

However, recent revelations showed the firm’s Australia senior partners misused confidential government information to help big multinational companies avoid paying more tax, and is now subject to a police investigation.

While the scandal has made international headlines, it has also raised questions on how heavy a reliance governments — from federal to local — should have on private consultants to formulate policy.

And while the Reserve Bank of Australia and some of the country’s biggest superannuation funds have either frozen or are reviewing future work contracts with the accounting giant, the council did not say it would do the same when contacted by Docklands News.

The council did, however, say it was committed to a continued effort to cut consultant expenditure.

Twelve months ago, in the 2022-23 budget, the council said its post-COVID recovery would see less reliance on consultants as part of a “concerted effort to source in-house expertise”.

“We are also using council resources in a more cost-effective manner, relying less on agency staff and reducing consultant costs expenditure,” it said, adding it would shave $1.4 million off its annual expenditure.

And now, as part of the 2023-24 draft budget, the council has said it will reduce costs by $1.8 million in the next 12 months.

A City of Melbourne spokesperson told Docklands News that agency costs would also drop by $2.6 million over the next year.

This comes after the draft budget, expected to be adopted at the June 20 special Future Melbourne Committee meeting, revealed the council’s deficit was set to increase from $11 million to $17 million and a predicted return to surplus pushed back by two years. •