The role of consultancy firms in health policy – especially the Big Four, of KPMG, PwC, EY, and Deloitte – is coming under increasing scrutiny.
Key federal politicians have added their voices to concerns about the appointment of KPMG to run a consultation for the National Health and Climate Strategy.
Writing recently for Croakey, researchers from The Stretton Institute at the University of Adelaide, Professor Fran Baum and Dr Julia Anaf, highlighted KPMG’s conflicts of interest, and argued that “independent frank and fearless public servants in whom the public can have trust” should be charged with running the consultation.
Asked to comment on the issue, Dr Monique Ryan, the influential Independent Member for Kooyong, urged the Government to stop outsourcing important policy work and “start using the public service like it was intended to be used”.
“We should be getting frank and fearless advice from our own public service rather than using KPMG, especially when the consulting firm has the same sorts of conflicts of interests that PwC has had difficulty containing,” she said in a statement provided to Croakey.
“The Morrison Government gutted the public service. The Federal Government should rebuild it so it can do its job again.”
Invest in a robust public sector
Dr Sophie Scamps, the Independent Member for Mackellar and another strong advocate for public health, also flagged conflict of interest concerns.
“There is a clear conflict of interest here whereby a corporate consultant which profits from advising the fossil fuel industry is leading consultation on a strategy to minimise fossil fuel related harms,” she said.
“The potential for the process to be biased, leading to poor policy outcomes, is far too great. This issue highlights the problematic nature of a government that relies too heavily on corporate consultants. We need to invest and build back the expertise of our public service so we can trust public policy is based on independent, expert, and frank advice.”
Senator Barbara Pocock, Greens spokesperson for Finance and the Public Service, who has been leading scrutiny of PwC, highlighted the broader issues at stake, and called for the capacity of the public service to be restored “as a matter of urgency”.
“Honestly, the mountain of examples that are coming to our attention that demonstrate real and disturbing conflicts of interest among all of the Big Four consultants in relation to their work with government is astounding,” she said in a statement to Croakey.
“KPMG’s work on the National 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.
“The Department of Health and Aged Care may be comfortable with the assurances they’ve received from KPMG but there is no shortage of evidence that shows the Big Four consultants can’t be taken at their word when it comes declaring conflicts of interest.
“We don’t know the detail of how KPMG are advising the Government on this issue, but the public can’t have confidence in this process while there is a perception of conflicts of interest. Remember this is a firm that encourages new investment in fossil fuel production and openly disparages advice from the International Energy Agency to stop new oil, coal and gas projects from going ahead.
“The onus is on the Health Minister to explain clearly how these conflicts are being managed.”
Surprised
Professor Peter Sainsbury, a senior figure in public health, past president of the Public Health Association of Australia and a columnist on environmental health concerns, attended a consultation run in Sydney last week by KPMG.
He was surprised to find one of the large firms doing this work. “I could point you to people who would do the job a lot cheaper and a lot better than KPMG,” he told Croakey.
He said there was no discussion of KPMG’s conflicts of interest at the consultation, so far as he was aware. Nor was it made clear what the firm’s role would be in developing the national health and climate strategy – whether they were just running the consultations or whether they would be drafting the strategy.
Sainsbury added that it was important a draft of the strategy be released for public comment, to ensure an opportunity for feedback on the detail.
Sainsbury, a former senior public health official, said that when government departments employed the large consultancy firms, “you know they are going to give you the answer you want”.
Reforms needed
Meanwhile, pressure is building for political parties to stop accepting donations from significant contractors such as KPMG and PwC.
A briefing paper released by the Centre for Public Integrity in May said that over the last ten years, the Big Four had donated $4,289,253 to the ALP and Coalition.
Over the same period, total contract volume for the firms jointly had increased by over 400 percent, from $282 million in 2012-13 to over $1.4 billion in 2021-22.
While business had boomed for the Big Four, the Australian Public Service – one of the pillars upon which our Westminster democracy depends – had been left with static staff numbers and a diminished policy capability, the paper said.
“The increased outsourcing of crucial public interest policy work to private contractors who are not directly accountable and financially back both parties raises both questions of integrity and public value-for-money,” said the briefing.
The Centre recommends:
- Recentring the APS as the main policy advisory body in government, with resort to external advisors only where there is a demonstrated and acute need for such services
- Imposing a cap on each department’s use of consultants (with exceptions available for circumstances of national emergency)
- Requiring rigorous reporting by departments to Parliament in respect of the use of consultants
- Removal of the APS Average Staffing Level Cap introduced in 2015-16
- Implementation of a donation cap and spending caps to reduce undue influence of well-resourced corporations.
The table below, sourced from the Centre for Public Integrity shows donations by firm and by year, 2012-2022.
Responses
The Department of Health and Aged Care responded to concerns last week as outlined here.
Today, the Department addressed further questions from Croakey:
What COIs did KPMG declare to the Department in relation to this consultancy?
KPMG was required to disclose any relevant conflicts of interest as part of the procurement process. The nature of any declaration is considered commercial in confidence.
Was the Department aware of the COIs and related issue outlined in our recent article?
The Department considered all relevant conflicts of interest as part of the procurement process.
Have any further actions being taken since last week, by either the Department or KPMG in relation to these concerns?
The Department monitors conflicts of interest for contractors on a continuous basis and contractors are required to declare any new conflicts of interest as they arise.
Croakey again asked KPMG for comment (after they did not respond to a request for comment last week), but was advised “we don’t comment on client work”.
Call out
Meanwhile, Professor Fran Baum and colleagues are hoping to interview current or former public servants and employees of consultancy firms for research investigating the impact of the increased use of consultancy firms by the public sector.
Further reading: PwC paid $30m to build and spruik a mental health turkey, published by Health Services Daily.
Previously at Croakey:
On climate change and health, we have more than one elephant in the room
Unveiling next steps for the National Health and Climate Strategy
Concerns raised about KPMG conducting National Health and Climate Strategy consultation
