SA Coalition dubs shared services a disaster
South Australia's Shadow Finance Minister Rob Lucas has labelled the State Government's implementation of a series of shared services centres as an "unmitigated disaster" blown out by $68 million.
The state's shared services initiative was announced in late 2006 as a project that would streamline and simplify corporate and business support services — such as finance, payroll and ICT functions — from individual agencies into one organisation, Shared Services SA. It's an approach that has been followed by other state governments in Western Australia and Queensland, with very mixed results.
Lucas has been a long-time critic of the program, and this week handed the State Government another serve over its efforts.
"When the Shared Services project was originally approved in 2007/08, implementation costs were approved at $60 million, and there were going to be annual savings of $60 million a year from last year and continuing into the future," Lucas said in a statement issued this week.
He said that several treasury officials had stated in evidence to the state's Legislative Council Budget and Finance Committee that implementation costs were actually $128 million — $68 million above the original $60 million planned.
"Shared Services initiatives in other states like Queensland have already been shelved due to serious cost-saving problems," said Lucas, referring to the state's controversial decision in mid-2010 to walk away from a one-size-fits-all ICT shared services strategy, following a series of damning reports into its delivery and the disastrous payroll systems implementation at Queensland Health.
"It is now time for Labor to admit this is a disaster, and review whether or not it should be proceeded with under the current guidelines," said Lucas.
"At the very least, there needs to be significant change to the proposal, including tighter controls to prevent these massive blowouts. This is yet another example of the slack financial management of this Labor Government, which means tens of millions of taxpayers' dollars are wasted whilst schools and hospitals struggle for funding."
Lucas has also recently renewed his attack on the state's Future ICT program, its long-running project to replace its overarching technology outsourcing contract with IT services giant EDS, which is now part of HP's Enterprise Services division. The State Government had planned to save $30 million per year after breaking up the EDS contract into smaller deals with a range of suppliers.
"Various departments have told the Budget and Finance Committee [that] Future ICT actually increased their ICT costs, even though Treasury claimed savings and reduced their budgets," he said in a separate statement. "It is now time for Labor to explain the reasons why the costs have blown out so much, and the savings are virtually non-existent."
The office of Labor's Patrick Conlon, the Minister for Transport and Infrastructure in the state, has been invited to respond to Lucas' statements.