More than $500 million in consultancy costs in Canberra will be cut across the NDIS, Defense and the Australian Taxation Office.

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 cut more than $500 million of work in the embattled consultancy sector this financial year.

The findings are contained in a new report detailing for the first time the value of work considered core to the public service to be outsourced and returned to government departments and agencies. Core work includes activities such as policy development and the development of laws and regulations.

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