Consultancy firms working for the Department of Defence, the National Disability Insurance Scheme and the Australian Taxation Office will be hit hardest by a new plan to take more than $500 million of work away from the struggling consultancy sector over of this exercise.

The revelation is contained in a new report which details, for the first time, the value of work considered essential to the public service that is carried out by external parties and which will be brought back internally to government departments and agencies. Core work includes activities such as developing policies and drafting laws and regulations.

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