Senior bureaucrats believe the Federal Government’s pledge to halve its reliance on IT contractors is failing.
A review of the Government’s efforts to improve its technology use also says some agencies hide their use of private-sector staff by hiring intermediary firms, which charge up to 28 per cent extra.
Special Minister of State Gary Gray issued the findings of the independent review yesterday, which was undertaken by IT specialist Ian Reinecke.
Dr Reinecke examined how well the bureaucracy had implemented the reforms suggested by Sir Peter Gershon two years ago.
The Gershon review aimed to improve the Government’s IT use by spending less on day-to-day technology and more on projects that improved productivity, eventually saving taxpayers up to $400 million a year.
It also recommended halving the number of IT contractors used within two years and employing more permanent staff instead. The Government later extended the two-year target to three years.
But Dr Reinecke’s report says that while agencies cut contractor numbers by 10 per cent last year, some chief information officers were sceptical further cuts could be achieved ”in the face of increasing demand for scarce ICT skills”.
The report also suggested government agencies hid their use of contractors.
”In some cases it was reported that the effects of the requirement to migrate staff were being mitigated by the employment of contractors through third-party service providers with the result that they did not show up in agency contractor numbers.”
Dr Reinecke found the shift from contractors to permanent staff was likely to save only $33 million over three years, rather than the $100 million originally estimated.
He cited a report by an IT industry consultant that said agencies were ”avoiding the intent of the Gershon recommendations by contracting resources through service providers and outsourcing vendors as intermediates, at considerably higher margins … The report estimated that an additional mark-up of 20-28 per cent was applied to the rate for direct contractors.”
Dr Reinecke said ministers and senior executive public servants had been preoccupied with cutting spending at the expense of finding long-term efficiencies and productivity gains.
Source:-http://www.canberratimes.com.au/news/local/news/general/agencies-hiding-it-outsourcing-report/2002148.aspx
