The quiet rise of private consultancy in Australia’s public universities has now reached a point where it is reshaping the sector’s priorities, governance, and capacity to act in the public interest.

What began as occasional specialist advice has evolved into structural dependence – accompanied by weak oversight, opaque contracts and significant conflicts of interest.

State and federal parliamentary inquiries into the role of consultants in the public sector have revealed the scale of the phenomenon. Universities are now deeply embedded in the networks of the “Big Four” accounting firms (PwC, EY, Deloitte, KPMG) and the “Big Three” strategy houses (McKinsey, Bain, BCG). Research by the National Tertiary Education Union revealed that in 2023, public universities collectively spent more than $734 million on consultants. We have suggested in earlier research that the actual figure is probably closer to $1 billion when unreported engagements are considered.

Universities now routinely outsource work that could be done by academic and professional staff. The University of Melbourne spent $290 million on consultants and contractors in 2018-19; UNSW $192 million; the University of Sydney $167 million; and the University of Wollongong $30 million. These sums reflect a profound shift in institutional culture, away from internal capacity-building and towards an outsourced management model.

Governance links reinforce this shift. Of 545 members of Australian university councils, 143 come from private for-profit industries, including the major consultancy firms. Many of these companies also serve as auditors to the same institutions – blurring the line between independent oversight and vested interest. Some council members are former public officials who have moved into consultancy roles and now profit from inside knowledge of public sector processes.

Minimal oversight, poor transparency

Only Victoria and Queensland require public reporting of consultancy spending and, even then, disclosures are minimal. In most jurisdictions, the public has no way of knowing which firms were engaged, for what purpose, and at what cost. State auditors-general remain the only formal oversight bodies, yet their audits rarely probe deeply into the value or outcomes of consultancy work. This opacity is particularly troubling in high-risk areas such as building projects, property development and service contracting, where millions of dollars can change hands with little scrutiny.

Disruption disguised as reform

Consultants often arrive with limited understanding of higher education, yet their recommendations can drive major restructuring decisions. These proposals — frequently framed as “efficiency measures” — are often simplistic and counterproductive, eroding teaching and research capacity.

A typical pattern is “loss leader” bidding: under-pricing initial work to gain entry, then embedding the firm in future planning cycles. This creates dependency and keeps the consultancy pipeline flowing. At times, job cuts follow consultant reviews, only for positions to be refilled later, compounding costs and instability.

The University of Wollongong’s experience is illustrative: consultancy expenditure jumped from $9.3 million in 2022 to more than $14 million in 2023 while significant redundancies were imposed. Elsewhere, consultants have promoted capital projects and building programs while advising on cuts to academic offerings – aligning with construction sector interests, but undermining core educational missions.

Adding to the concern, some of the same firms have failed to detect hundreds of millions of dollars in wage underpayments to university staff over more than a decade, calling into question their competence and professional ethics.

Conflicts of interest: ‘Working both sides of the street’

Large consultancy firms routinely advise both public institutions and private sector clients with potentially competing interests. In the university context, they may simultaneously work for competing universities and vendors supplying goods and services to those institutions.

The risks are obvious: insider knowledge gained in one role can be leveraged in another, shaping procurement, strategy and policy in ways that may benefit private clients over the public good.

The corporatisation of governance has accelerated this trend, reframing universities as profit centres for external actors and reducing their reliance on in-house expertise. This is not only costly – it is a strategic failure.

Reform priorities

Addressing the over reliance on consultants requires structural changes to restore transparency, rebuild internal capacity and manage conflicts of interest. Based on the evidence, we propose:

• Public register: Require all universities to report consultancy engagements above a set threshold to a central public database, detailing cost, scope, deliverables and outcome evaluations.
• Governance safeguards: Prohibit individuals from firms actively contracted by a university from serving on its governing body or subcommittees.
• Conflict disclosure: Mandate that consultancy firms declare all relevant client relationships, including those in higher education supply chains.
• Procurement integrity: Introduce independent oversight of tenders and ban “loss leader” bidding designed to secure ongoing work.
• Capacity building: Set measurable targets for reducing consultancy reliance in non-specialist areas, redirecting savings into staff development and internal planning expertise.
• Cooling-off rules: Impose a stand-down period before former university executives can accept consultancy roles with their previous institution.
• Sector-wide audit: Task the Australian National Audit Office with a review of consultancy use across all public universities over the past five years.
• Funding conditions: Integrate a national code of ethical consultancy use into the Universities Accord framework, making federal funding contingent on compliance.

Reclaiming strategic autonomy

The unchecked expansion of consultancy work in higher education has hollowed out internal expertise, eroded transparency and deepened structural dependency. This has happened not by accident, but because of policy settings and governance cultures that prioritise corporate norms over public mission.

Reversing this trajectory will require more than incremental policy tweaks. Universities must reassert their capacity to think, plan and act independently, drawing first on the knowledge of their academic and professional communities rather than outsourcing strategic functions to private actors whose priorities may diverge from the public interest.

If unaddressed, the consultancy habit will further weaken governance, distort institutional priorities and squander public resources. Reform is both possible and urgent. The expertise universities need to lead themselves already exists within their walls; it is time to value, strengthen and trust it.

The views expressed in this article may or may not reflect those of Pearls and Irritations.