A former leader of the public service has blamed the former Coalition government for Australia’s “hollowed out” public sector. 

According to former top public servant Martin Parkinson, the stripping of the public service was a perverse consequence of the former Coalition government's emphasis on cutting its size. 

Mr Parkinson, who served as the head of the Department of Prime Minister and Cabinet under both Malcolm Turnbull and Scott Morrison, claimed that the constraints on staffing levels resulted in public servants leaving only to return as highly paid consultants working for one of the major advisory groups.

The Albanese government is now reviewing the use of consultants, contractors, and labour hire by the federal government in order to rebuild skills in the public service and cut the Commonwealth's multibillion-dollar bill for external labour. 

Mr Parkinson made his comments at The Australian Financial Review Workforce Summit last week. Peter Woolcott, the Australian Public Service Commissioner, also spoke at the event and provided further details about the government's long-term effort to rebuild the bureaucracy's skills.

The Department of Finance is conducting an audit of how consultants have been used, where they're being used, their cost, and the ways consultants are hired. 

Mr Woolcott added that consultants were particularly prominent in providing information technology services to the Commonwealth. He also mentioned that the government is seeking to establish an in-house consulting outfit that will operate out of PM&C, which will have a narrow focus.

The feasibility of an in-house consulting model has been called into question after the United Kingdom closed its in-house government consulting service in early February. 

The Australian government's in-house program was modelled on Crown Consulting, but Accenture Australia managing director Rob Coffey, who previously worked at Crown Consulting in the UK, explained that the Australian model is being created as part of a suite of changes to build the capability of the public service to deliver.

The plan for the in-house consulting operation is to provide a core consulting service, help agencies and public servants be better consumers of consultancy services, and increase the skills of public servants, as well as help connect public servants with specialist skills to other parts of the bureaucracy. 

The government has already identified more than 250 areas of specialist knowledge across different portfolios that could be shared with others in the public service, according to Deputy Secretary Dr Rachel Bacon.