Consultancy: NSW Health has ‘nothing to hide’

3 minute read

The secretary says the department prides itself on sticking to the rules, despite placing the responsibility for managing COIs on the consultants themselves.

NSW Health relies on consulting firms to raise and handle conflicts of interest rather than managing them itself, according to department secretary Susan Pearce AM.

Ms Pearce said the onus was on individuals to handle their conflicts of interest when engaged in work for NSW Health, during an inquiry into the state government’s use and management of consulting services today.

Ms Pearce also admitted to members of the Public Accountability and Works Committee that she could not make any firm promises that a problem regarding conflicts of interest, such as board members of Local Health Districts being involved with consulting firms like PwC, would not happen again.

“There are conflicts all over the place [and] there are requirements upon professional individuals to manage their conflicts,” she told the inquiry.

“I don’t know that I can sit here as Secretary of Health and guarantee to you that that there will never be a conflict of interest issue again. If there is a conflict, it doesn’t necessarily automatically knock someone out.

“The very robust process that we now have in place from 1 July will be taking those issues [into account] and hardening our stance, if you like, in regard to potential conflicts.”

Regarding the department’s management of consultants advising executives on LHD boards – specifically PwC’s interim CEO Kristin Stubbins’ previous statement that she acted as an advisor to South Eastern Sydney LHD’s chief financial officer – Ms Pearce said that it wasn’t a common occurrence across the department.

“I can’t make a comment about being concerned about people working in consulting firms being advisors to people in districts. I don’t think it’s a particularly widespread practice,” she said.

“Clearly, I’m not in a position as Secretary to provide detailed information about what happened at a local health district eight years ago.

“But I think in general terms, people in the health system seek advice from large numbers of people, whether they be in consulting firms or not. It may be a mentoring arrangement, it may be unpaid, it could be any number of things.

“So I’m not really in a position to talk about being concerned without more particulars as to what, if any, the influences [were], or some sort of suggested behaviour.”

Ms Pearce and NSW Health’s Chief Financial Officer Alfa D’Amato also told committee members that they did not regard the department as having an over-reliance on contracting services to select consultancy firms, despite figures from previous hearings showing that 25% of all consulting spend for some LHDs was going to PwC.

“In terms of the improvements we’ve put in place from 1 July, the chief procurement officer is required to review any consultant request over $30,000,” said Ms Pearce.

“I’ve asked [Mr D’Amato] to keep his eye on that very issue because our policy is quite clear that there shouldn’t be a large amount of work that goes into one or the other [firm], it should be evenly spread.

“I’m not entirely familiar with the internal workings of all of these consultancy groups, to be honest with you. But I do understand that some of them have project management functions that others don’t have.

“So, I don’t think they’re all equal in their offerings. And I think that’s one reason why you see some of that [concentration]. In the ministry.

“When we’ve looked at our own information with regard to this issue, we can see that it’s fairly evenly spread across the consulting groups [at] the ministry level.”

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