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Concerns about the of private consultancy firms advising government – such as PwC, KPMG, Deloitte and EY – has led to a .

Until now, much has centred on PwC’s advisory role to the Australian Tax Office while also advising private clients on tax matters.

But government . And there’s about the potential for conflicts of interest and undue influence on health policy.

How do these firms consult on health?

Private consultants offer a and to government. These contracts about electronic health systems, policy, taxation, program design and evaluation, improving hospital performance, and health sector restructuring. Firms also major public and private health-care initiatives.

There might be an argument for engaging external consultants when that expertise does not already exist in the public service. However, when consultants are engaged more widely, we have potential problems.

For example, we’ve raised concerns about in the , which aims to prepare the health system for the impacts of climate change. The firm also advises the .

Senator Barbara Pocock, Greens spokesperson for finance and the public service, :

KPMG’s work on the ³Ô¹ÏÍøÕ¾ Health and Climate Strategy is the latest worrying example. This is core public service work that should be conducted by a robust public sector where there is no risk of a conflict of interest between a consultant with a fossil fuel client list and the public interest.

Pocock about KPMG auditing aged care facilities for government at the same time as charging others for advice on audits and accreditation. The firm says it has launched an internal inquiry.

The use of consultants to government has been noted at the state level too. New South Wales is running its own , looking into how consultants are used .

What are the concerns?

1. No scrutiny

Contracts between consultancies and government, and advice that arises, are not easily publicly available. So we cannot say if we’re getting good advice. There’s consultants give answers government wants to hear, instead of the “” advice from public servants.

Then there’s the issue of whether that advice, or contracted service, provides value for money.

University College London economist refers to the extensive use of commercial consultants to government in her book . She says neither theory nor evidence show private sector consultancy is more than what the public sector can provide.

2. Conflicts of interests

There’s the risk of conflicts of interest, as we’ve highlighted above. This arises, for instance, when firms have both government clients, and private sector ones, and information is shared.

There are also conflicts of interest in the phenomenon. This is the term used for staff movements between consultancy firms, government departments, revenue authorities or corporate regulators.

This has been well-documented for the , among others.

3. Impact on health policy

Consultants have over health policy due to recurring government contracts. Such influence includes supporting a neoliberal policy agenda. This promotes small government, and puts profits above the public’s wellbeing and public interest. This risks influencing health outcomes.

For instance, our in South Australia points to policymakers outsourcing government functions to private firms being a factor in increasing health inequities.

Changes to the public sector since the 1980s have resulted from the adoption of “managerialism” or the growing reliance on professional managers and business models. This leads to a decline in evidence-based health policies and helpful collaboration between different sectors, and a shift away from addressing health inequities.

One example is the to private consultancies during the COVID pandemic. This did not prevent numerous failures in the rollout. Delays increased the risk of critical health impacts including outbreaks and community lockdowns. The secrecy around these contracts is unacceptable.

4. Impact on the public service and governance

A government audit showed outsourcing to consultants in 2021-2022 was equal to the cost of paying 954 full-time public sector staff. This, and other forms of outsourcing, forms a so-called “shadow public service”.

When governments rely on private firms, knowledge and expertise are lost from the public service. This makes it hard for governments to plan ahead to reduce long-term health policy problems. Consultants shaped by the neoliberal environment tend to that are likely to stress more privatisation and use of consultants, as .

How can we fix this?

These firms hold power due to their expert knowledge and insufficient regulation. So we need strong commitment by the major political parties to:

• reinvest in the public sector to foster the skills for planning long-term health policies in the public interest

• ensure full transparency over contractual arrangements and remove “commercial in confidence” legal clauses when consultants are used

• manage conflicts of interests transparently, especially when private firms advise both industry sectors and governments

• ban political donations with extensive government contracts to avoid principles of accountability.

In a nutshell

While commercial firms can make a positive contribution to society, they can potentially ill health, inequity, and harm to the planet via the advice or services they provide.

For as long as consulting firms act a “shadow public service” in Australia, health and equity will continue to be undermined. This must change.

Fran Baum receives funding from the ³Ô¹ÏÍøÕ¾ Health and Medical Research Council and the Australian Research Council

I am the immediate past co-chair of the People’s Health Network’s Global Steering Council and current member of their Advisory Council
I am a member of the Board of the Cancer Council SA and Australia 21

Julia Anaf does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.