NSW budget 2016: commissioning, savings and service delivery

By Stephen Easton

Wednesday June 22, 2016

Yesterday’s New South Wales budget allocates $2.9 million to create a new commissioning team inside Treasury, $17 million to help the government’s data analytics centre break down silos, and $415 million to support the continued expansion of Service NSW.

Efficiency dividends of 1.5% and the 2.5% cap on public service pay rises continue, stretching all the way to the four-year spending horizon in the latest economic plan.

The demand for agencies to squeeze 1.5% budget cuts out of back office savings across the board will give the government an extra $1.4 billion to play with, over a three-year period from July 2017.

The new budget papers state that money will be used to “invest more on the frontline” as well as contribute to the generic goal of maintaining a strong fiscal position. At the same time as confirming the continuation of the arbitrary savings measure, the government maintains its approach to reducing expenses comes “without compromising the quality of government services”.

The opposition, on the other hand, argues the efficiency dividend does cut into frontline service delivery agencies and has criticised the government for spending $150 million on consultants over the past two years.

“It’s very clear that this government has gutted public service agencies and now we are reliant on spending very large amounts on private consultants,” said shadow treasurer Ryan Park.

“I would certainly like to see the government … get back to a situation where we have very good, strong, well trained public sector agencies and public sector advisors.”

The Department of Finance told Fairfax Media an effort to “reduce the public sector’s reliance on external advice and build its own skills” was underway with new procedures for hiring consultants already in place.

Treasury estimates the cap on wage growth has saved it $2.5 billion from July 2011 to March this year.

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“We also know modern governments need to break down the traditional silos created by red tape and bureaucracy and share information between agencies,” said Treasurer Gladys Berejiklian, explaining the value of the data analytics centre, which would be used to inform decisions about where to allocate resources.

The new Commissioning and Contestability unit in the Department of Treasury, reporting to Berejiklian and Finance Minister Dominic Perrottet, will help the government decide which areas of service delivery to outsource — or to obtain from external service providers through the more thoughtful skill of commissioning, if its title proves accurate.

The two ministers explained the CCU would explore new “delivery models that include a mix of government, NGO and private sector providers” in a pre-budget press release:

“Drawing on world’s best practice, the CCU will work with government agencies to test the efficiency and effectiveness of current and proposed government programs, exploring delivery models that include a mix of government, private and not-for-profit service providers to improve competition and value for money, while delivering better services.”

The small unit will offer other agencies “expertise … to draw on at each stage of a project, from scoping to execution” inspired by the approach of the United Kingdom’s government towards commissioning public services.

“A great example of the government re-imagining services around what customers want is Service NSW, and that is the kind of transformative innovation the CCU will deliver,” Perrottet said in the June 10 statement.

Berejiklian said the united front for service delivery would use its $415m in funding to expand access through its regional and metropolitan network and deliver on ” major digital initiatives” like the shift to digital driver’s licenses.

The 2016-17 NSW budget also comes with a new intergenerational report that looks ahead 50 years into the future and warns of the danger of revenue shortfalls.

Various technological improvements and efficiency measures in government owned enterprises are detailed in the budget paper that looks at the wider NSW public sector, while machinery of government changes since the last budget are all detailed in the budget estimates paper.

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