Consultants will be banned from doing core government work under new guidelines issued by the Australian Public Service Commission which aim to wind back the use of contractors in the public service.

It comes after disturbing revelations about the behaviour of some consultants, including PwC’s misuse of confidential government information, as well as concerns expressed in the landmark Thodey review of the APS that consultants are increasingly being used to perform what used to be core in-house capabilities.

The APS Strategic Commissioning Framework released by public service Katy Gallagher on Tuesday says work including developing cabinet submissions, drafting legislation and regulations, and policy formulation must be done by APS employees.

Procurement and contracts, standard cost benefit analysis, program delivery and grant management must also be brought back inhouse.

The framework limits outsourcing to specific circumstances, including when agencies are genuinely unable to fill a capability gap, where there’s a legislative need for independent advice, where unique specialist skills are required, or in the case of an urgent or unforeseen situation.

Contractors can also be used for non-core services such as property management, cleaning, construction, security and defence base health services.

Where consultants are required because of an APS gap, it will be the responsibility of the agency to build capability within its ranks, and transition the function back to public servants.

Agency heads to set targets, report on progress

Agency heads will be tasked with determining what constitutes core work and setting targets to reduce reliance on outsourcing by June 2024, including how many roles will be affected and the anticipated cost savings.

They will also have to report on their progress in annual reports from the next financial year.

“All agencies must move away from outsourcing work that is the core role of the APS or the agency,” the guidelines state.

“Agency heads are accountable for rebalancing their workforce to prioritise direct employment, strengthen capability, and ensure any use of external expertise enhances the work and knowledge of the APS.”

Senator Gallagher said the guidelines would help rebuild capability and expertise in the public service.

“We have an ambitious plan to reform the APS and this framework will ensure that from now on core work will only be done by APS employees,” she said.