British efficiency expert Sir Peter Gershon has suggested agency budget cuts totalling $540 million, castigating the federal public sector for poor governance mechanisms on technology projects and an ICT spending model which gave individual departments and agencies too much autonomy.
In a landmark report closely examining the Federal Government's use of technology, delivered late yesterday, Gershon wrote the current model came close to treating many agencies "as though they were independent private sector entities".
The efficiency specialist, who was appointed by finance and deregulation minister Lindsay Tanner to review the sector in April this year, said this led to "sub-optimal outcomes in the context of prevailing external trends, financial returns, and the objectives of the current government".
Sir Peter Gershon and Lindsay Tanner.
(Credit: Brian Hartigan)
Despite the existence of the Australian Government Information Management Office led by federal CIO Ann Steward, which aims to coordinate agencies' use of IT, Gershon concluded there was weak governance of pan-government issues relating to IT.
Agencies, he wrote, not only had weak governance mechanisms in terms of their ability to manage ICT-enabled projects, but also did not subject their business-as-usual IT support funding to sufficient scrutiny.
One urgent issue was the lack of a whole-of-government strategic plan for the use of datacentres; Gershon wrote that the absence of such a plan meant the government as a whole would be forced into a series of ad-hoc investments over the next 15 years that could cost taxpayers more than $1 billion more than it should.
Other issues included the fact that the government marketplace for buying goods and services was "neither efficient nor effective", and that there was a "significant disconnect between the government's overall sustainability agenda and its ability to understand and manage energy costs and the carbon footprint of its ICT estate".
In the report, Gershon recommended what he described as "a major program of both administrative reform and cultural change" to fix the problems.
For starters, the expert said agencies covered by the Financial Management and Accountability Act 1997 should reduce their use of contractors by 50 per cent over a two-year period and increase in-house staff numbers, saving $100 million; create a ICT career structure; develop a whole of government ICT workforce plan, and develop a 10-15-year datacentre plan.
Such agencies that had business-as-usual ICT budgets north of $20 million should also have those budgets cut by 15 per cent over two years, along with a shift to spend more money on projects. Those with budgets between $2 million and $20 million could have their budgets sliced by 7.5 per cent over the same period. This could save a total of $540 million, with the money to be transferred to a central fund for reinvestment in projects to improve business-as-usual activities.
At the strategic level, Gershon recommended a ministerial committee on ICT be established to support whole of government initiatives, as well as a secretaries' ICT governance board, and a common methodology created to assess agency capability to manage ICT-enabled projects. A sustainability plan would also be created.
All of this, according to Gershon, would not come easy. "Based on my experience of creating sustainable change in the UK public sector there are two critical requirements which will determine the success of proposed program," he wrote, citing drive from ministers and top public servants, as well as the availability of proper funding and skills resources as the critical factors.
Tanner said in a statement that without pre-empting the report's impact in Cabinet, it formed "an excellent basis" for implementing a series of changes for improving the effectiveness and efficiency of government technology use.
The full report can be downloaded here.