Ombudsman's bizarre decision on KiwiRail consultant spend needs to be reversed

An AI-generated image of a steam train with money billowing out of its funnel.

Despite years of government agencies releasing the amounts they’ve spent on consultants with no demonstrable negative impact on their ability to procure more services from consultants, the Ombudsman has now bizarrely decided that KiwiRail doesn’t need to release under the Official Information Act (OIA) how much it spent on consultants from McKinsey and Company.

The Ombudsman’s fundamentally flawed rationale for this decision is that if KiwiRail was to release such information it would disadvantage the company in future attempts to procure the services of consultants and that the public interest didn’t outweigh this risk.

I’m sorry, but that’s just nonsensical reasoning and it flies in the face of years of precedent set by other parts of government.

It takes just a quick google search to discover that government agencies have been releasing under the OIA their spends on consultants for years, often breaking down the spend by specific pieces of work provided by a given consultancy company, totals for given years spent with individual consultancy companies, and itemising it by consultancy company.

For example, the Department of Prime Minister and Cabinet (DPMC) released six years of itemised spends on consultants, much of it linked to the specific work they undertook for DPMC.

Similarly, the Department of Internal Affairs (DIA) released a complete list of all the consultancy spends, including the amounts paid to specific companies, that they incurred in relation to the previous Labour-led Government’s Three Waters reforms.

Likewise, the Inland Revenue Department (IRD) released six years worth of consultancy spend where they itemised how much was spent with each consultancy provider over that time.

I promise you that despite publicly releasing this information, none of those organisations, or any other parts of government, have had any issues procuring more consultancy services as a result of basic transparency around the expenditure of public money.

Frankly, the Ombudsman’s decision here is rubbish, and Chief Ombudsman Peter Boshier needs to reverse it.

It is abundantly clear that the precedent is consultant spends on specific pieces of work can and should be released under the OIA and that doing so has no negative impact on the ability of organisations to procure consultancy services in the future.

Not only that, but given KiwiRail is at the centre of a growing scandal around a botched multi-billion dollar ferry project that has raised serious questions about its management and governance capabilities, as well as the decision-making of two consecutive Governments, I’d say the public interest test overwhelming outweighs any imagined impact that KiwiRail is pretending will happen if it is forced to release this specific figure.

All of this is also before we get into the broader public interest into just how much money is being spent on consultants, which consultancies are getting the work, and what they’re actually delivering for that public money across all arms of the government.

KiwiRail’s status as a state-owned enterprise (SOE) is irrelevant. It’s a public entity, spending public money, and it’s required to be transparent and accountable to the New Zealand public.

Sadly, this latest misstep from one of our top public watchdogs comes on the heels of other backwards moves for transparency, including the greenlighting of ministers keeping inaccurate records of meetings, and a failure to chase up councils who are refusing to open up their secret workshops and briefings despite a clear expectation from the Ombudsman that they should do so.

We only need to look across the Pacific to see what happens when we fail to uphold high standards of transparency and accountability. As public trust gets eroded in civic institutions, politicians realise they can act with increasing disregard for any basic principles of decent society, which leads to poor governance, decreasing social cohesions, and ultimately higher economic, social, and political costs for society more broadly.

As to why I’m writing about what appears on the surface to be a central government issue, what’s playing out here will have implications for the way transparency and accountability works in local government too. Having witnessed first hand poor transparency, accountability probity, and governance practices in local government, we should be aiming to do better, rather than the lowering of the bar that the current Ombudsman seems to be pursuing.