Evidence from a senior public servant to a Parliamentary Committee had confirmed there was now a major black hole in the Rann Government’s claimed $130 million in savings from its shared services centre proposal.
Chief Executive of the Department for Further Education, Employment and Science Technology (DFEEST), Brian Cunningham, told the Legislative Council’s Budget and Finance Committee this week that his Department had already implemented its own shared services proposal as part of its required budget cuts.
Liberal Member of the Legislative Council, Rob Lucas, said today that in the 2006/07 budget, Treasurer Kevin Foley outlined $130 million in savings over four years from shared services but in addition to that each Department was required to implement multimillion dollar budget cuts to achieve ‘efficiency dividends’ or ‘operational efficiencies.’
For example, DFEEST was required to save $37 million over four years.
Mr Cunningham outlined this week that DFEEST had displaced 36 staff by combining the accounts payable, accounts receivable and ICT service desk into one centre in Adelaide.
Mr Cunningham revealed to the Committee he had discussed the issue with the Under-Treasurer:
Mr Lucas: “…you are going to save $12 million (per year) through head office efficiencies, part of which is this shared service which will be a number of millions of dollars from the sound of what you have indicated. So, the essential question for this Government is: where will it count? Will it count as the whole of Government $60 million saving or will it count as your savings within DFEEST? I would assume as an agency if you are like every other agency you would be arguing that it will count as your savings.”
Mr Cunningham: “The answer is yes.”
Mr Cunningham: “In my discussions with the Under-Treasurer, we have not nailed that point, but our very strong feeling is that this will be DFEEST’s savings.”
Mr Lucas said that similar evidence had previously been given to the Committee by the Chief Executives of the Departments for Health and Families and Communities, Dr Sherbon and Ms Vardon.
“The simple fact is that this confirms there is ‘double counting’ of savings included in the budget papers. Departments like FEEST are already making the budget savings that have also been counted by Mr Foley in his claimed future $130 million in savings to be achieved from the shared services centre,” Mr Lucas said.
“The Rann Government is now facing another ‘black hole’ in its budget as this beleaguered shared services project is obviously struggling to achieve its claimed $130 million in savings.”