TAFE NSW spends millions on McKinsey, BCG and Deloitte

05 January 2020 Consultancy.com.au

TAFE NSW, a vocational education and training provider for professionals in New South Wales, has in the space of 14 months spent over $6 million on external consultants, sparking criticism at a time when TAFE NSW is being forced by the government to downsize its organisation.

Established in 1990 under the TAFE Commission Act, TAFE NSW is an independent statutory body responsible for (technical) skills training across Sydney and the wider NSW region. Annually, the network trains over 500,000 students in campus, workplace, online, or distance education methods of education.

Reporting by The Sydney Morning Herald reveals that between June 2018 and September 2019, the institution has spent millions on consultants for a range of strategic studies, organisational improvements and human capital services.

Deloitte

Deloitte Access Economics, a subsidiary of Deloitte (formed when Deloitte acquired Access Economics in 2011), billed nearly $1.1 million for work on defining training requirements for TAFE NSW, amid a changing skills landscape and candidate profile.

TAFE spent over $6 million on external consultants

The government network has worked with Deloitte previously. In March 2017 for instance, TAFE NSW handed the Big Four firm a $9.14 million, three-year contract for the provision of technology consulting services. Under the terms of the deal, Deloitte helped TAFE NSW implement several Oracle solutions, including Oracle Integration Cloud Services (ICS), Oracle Java Cloud Services (JCS) and Oracle Enterprise Identity Services Suite (EISS).

The deal also tasked Deloitte with improving the identity management processes and systems of the education and training provider. With revenues of $2.3 billion, up 13% on the year previous, Deloitte is one of Australia’s largest professional services firms.

McKinsey & Company

Global strategy consulting firm McKinsey & Company was handed a $1.4 million contract by TAFE NSW, to “conduct a review into TAFE NSW to assess the One TAFE reforms and enable the public education provider to prioritise resources for teachers and students,” said Geoff Lee, Minister for Skills and Tertiary Education in the second Berejiklian ministry.

“We need to continually ensure we’re making best use of our resources across our more than 130 campuses, 11,000 staff and over 400,000 students,” he added.

The OneTAFE initiative is described by TAFE NSW as a modernisation program that enables the organisation to “provide the high quality, industry-relevant training that employers need, where, when and how students want. To do this, we need to collaborate throughout our business, and adopt a more streamlined ‘One TAFE NSW’ operating model and mentality.”

Boston Consulting Group

McKinsey arch-rival Boston Consulting Group (NCG) has also been hired, although its role in the period under scrutiny was relatively small. The consulting firm was paid $165,000 to “to refine the executive leadership team’s roles and responsibilities to meet the TAFE NSW strategic plan.”

Notable is that the contracting of fast growing Boston Consulting Group came four years after the US-headquartered management consulting firm was slammed by NSW Teachers Federation for delivering a “flawed and inaccurate report” report to TAFE NSW for which it charged over $90,000.

In January 2015, TAFE NSW engaged the firm to analyse the vocational education and training market in NSW, but in its final report BCG’s authors promoted a private college network (Australian Careers Network) that later on was raided by the Australian Federal Police for alleged fraud.

Maurie Mulheron, President of the NSW Teachers Federation, said the BCG report was “an appalling waste of money at a time the state government was cutting funding for TAFE and charging students.”

In total, the government awarded eight contracts in the period, with other beneficiaries including Insync Surveys ($343,000 for a culture survey), Hudson RPO ($2.5 million for talent sourcing) and Year 13 ($180,000 contract to increase brand awareness of TAFE NSW among students).

In the spotlights

The revelation of the million dollar consulting spend has sparked a political and public debate, especially in light of the current reorganisation being implemented within TAFE NSW’s ranks. Last month, the institution announced that it is set to axe 200 roles, with 91 full-time employees made redundant and services of 105 contractors “no longer required”.

Jihad Dib, Labor's TAFE spokesman, accused the government of “squandering millions on top-end-of-town consultants at a time when it is cutting TAFE jobs”, adding “you don't pay consultants $74,000 a week [as they are paying McKinsey] to tell you that it is business as usual.”


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