How Australia Built an In-House Government Consultancy: Lessons for Public Sector Innovation

Rethinking consultancy: the Australian Government’s in-house experiment

A challenge of cost and capability

In recent years, the rising cost of external consultants has become a growing concern for governments around the world. In Australia, billions have been spent outsourcing strategic thinking and organisational reform—work that arguably belongs at the heart of the public service. Alongside the financial strain, there’s also been the quieter loss of something equally valuable: institutional knowledge.

Each time a consultancy finishes a project, much of that learning leaves with them. The result is a public service less able to respond independently to future challenges. Recognising this, the Australian Government has launched a new initiative—Australian Government Consulting (AGC)—an internal consultancy designed to reduce reliance on external firms and rebuild capability within the Australian Public Service (APS).

Why build in-house consulting?

From late 2023, AGC began offering high-quality management consulting services to APS departments. This new body aims to meet government priorities more swiftly and affordably than private consultancies, while at the same time boosting the skills of public servants. By returning key work to the public sector, the government hopes to restore the APS’s ability to develop policy, manage reform, and drive organisational change on its own terms.

AGC is also about embedding a more strategic approach to problem-solving across departments. With a mix of structured consulting methods and deep public sector insight, the team is set up to tackle complex challenges while transferring skills to agency staff along the way.

What AGC does

AGC focuses on three main areas:

• Delivering strategic consulting projects for policy, strategy, and performance improvement

• Building capability by sharing consulting techniques with APS staff and using a Specialist Network to tap into existing public sector expertise

• Supporting better use of external consultants, helping agencies define needs, negotiate smarter, and measure performance

Their services include:

• Designing operating models and organisational structures

• Driving transformation, cultural change and leadership development

• Conducting policy reviews, reform programs and cost-benefit analysis

• Supporting strategic procurement and improving the value of external spend

Importantly, AGC projects are delivered in collaboration with agencies. This hands-on model allows teams to learn consulting skills by doing, which helps embed practices long after a project ends.

Leadership and launch

AGC is led by Chief Consulting Officer Andrew Nipe, who brings experience from McKinsey, Bain & Company, the UK Treasury, and the Victorian public sector. His deputy, Joanne Rossiter, joined from the Department of Employment and Workplace Relations, with previous experience at consulting firm Nous Group. Both leaders bring a mix of consulting skill and deep public policy knowledge to the role.

Under their direction, AGC has formed a team of around 20 consultants, with expertise split across business development, capability building, and project delivery. Interest in the initiative has been strong, with almost 1,000 applications received from across the APS and private sector.

Early projects and future direction

Though still in its early stages, AGC has already been engaged in important work. This includes strategic support for the Centre for Australia-India Relations and assistance to the Net Zero Economy Agency, both newly established bodies focused on international partnerships and emissions reduction respectively.

AGC has also developed a Specialist Network—a pool of APS experts who can be seconded to projects as needed. This enables the organisation to assemble project teams with the right blend of experience and insight, while building a culture of shared problem-solving across government.

A model to watch

With an initial investment of $10.9 million over two years, the AGC is a modest but significant step toward rebalancing the relationship between public services and external advisors. The aim isn’t to eliminate private consulting altogether, but to ensure that when it is used, it’s done so with clear intent and strong internal capability.

In-house consulting won’t suit every task—but for strategy, policy, and organisational performance work that is common across government, AGC offers a compelling alternative. By focusing on internal skill-building and long-term capability, the initiative supports the APS in becoming more self-reliant, adaptive, and effective.

Summary - a quiet transformation

The AGC is more than a cost-saving measure. It represents a shift in how the Australian Government sees the role of its public service—valuing deep expertise, long-term capacity, and shared learning over short-term fixes. As this quiet transformation continues in Canberra, other governments should pay close attention. The early lessons from AGC may help inform similar in-house approaches elsewhere, especially in times when public institutions are expected to do more with less.

For countries grappling with the same questions of cost, capability and control, this is one experiment worth watching.