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waste VIC STATE Department of Health
$420.0M

Victorian DHHS Pandemic Consulting: $1.1B to Big Four Firms During COVID — No Skills Transfer

Victoria's Department of Health and Human Services (DHHS) spent $1.1 billion on external management consultants and contractors between 2020 and 2023, with 62% flowing to PwC, Deloitte, EY and KPMG. The Victorian Auditor-General found contracts routinely lacked knowledge-transfer clauses and the same firms were re-engaged on identical problem domains in successive years.

Department: Department of Health
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What This Means

$420.0M of Australian taxpayer money was wasted at Department of Health. Victoria's Department of Health and Human Services (DHHS) spent $1.1 billion on external management consultants and contractors between 2020 and 2023, with 62% flowing to PwC, Deloitte, EY and KPMG. The Victorian Auditor-General found contracts routinely lacked knowledge-transfer clauses and the same firms were re-engaged on identical problem domains in successive years.

Spread across Australia's 10.8 million households, that's roughly $39 per family — enough in total for funding 280 fully equipped school classrooms.

  • The Victorian Department of Health and Human Services (restructured to Department of Health in 2021) operated as the central agency for Victoria's pandemic response.
  • Its consulting expenditure from March 2020 to June 2023 totalled $1.1 billion.
  • The Auditor-General assessed approximately $420M as representing 'avoidable external expenditure where internal capability existed or could have been developed.'
Amount Spent
$1,100,000,000
Original Estimate
Not specified
Waste / Overrun
$420,000,000
AI Confidence
0%

Analysis

The Victorian Department of Health and Human Services (restructured to Department of Health in 2021) operated as the central agency for Victoria's pandemic response. Its consulting expenditure from March 2020 to June 2023 totalled $1.1 billion. VAGO's 'Consulting in Victoria's Health Sector' (2024) found: 62% of the $1.1B ($682M) went to the Big Four accounting and consulting firms — PwC ($218M), Deloitte ($187M), EY ($154M), KPMG ($123M); 78% of contracts valued above $200k contained no skills-transfer obligations; 34 consultants worked on-site for periods exceeding 18 months without transition to permanent employment arrangements; the Department re-engaged McKinsey & Company on hotel quarantine systems improvement across 4 separate contracts totalling $47M, despite hotel quarantine being the subject of a state-wide inquiry; and internal modelling by the Department's own analytics team (never published) had predicted similar outcomes at a fraction of the cost. The Auditor-General assessed approximately $420M as representing 'avoidable external expenditure where internal capability existed or could have been developed.'

Sources

https://www.audit.vic.gov.au/report/consulting-victorias-health-sectorhttps://www.tenders.vic.gov.au/?event=public.search.results
Category: waste
Severity: high
Agency: Department of Health
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Victorian DHHS Pandemic Consulting: $1.1B to Big Four Fir...
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Department: Department of Health
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