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Efficiency drive on fast track

THE State Government has endorsed a plan for the delivery through just five agencies of all high-volume corporate services for government departments.

It has also endorsed sweeping changes to government purchasing arrangements, including the establishment of a ‘centre of expertise’ to coordinate buying decisions related to buildings, roads, rail and other capital works.

These initiatives are part of the Government’s plan to lift the efficiency of its departments and agencies.

Early this year Premier Geoff Gallop said the Government could save $230 million over four years from improved purchasing.

This comprised savings of $30 million in 2004-05 and about $100 million in subsequent years.

Recent analysis has confirmed that total benefits, both financial and non-financial, would be in the order of $100 million a year.

The Government also expects to generate substantial savings from improved delivery of corporate services, such as finance and human resources.

It has projected that “aggregated, standardised and simplified” systems could reduce corporate services costs by about 20 per cent.

A recent review found that 21 different finance systems and 12 different payroll systems are currently used in the largest 49 government agencies.

Many of these systems do not support high levels of automation, and many agencies were found to be too small to achieve scale economies or retain specialist staff.

The five proposed “shared service centres” would be designed to address these issues.

They would be established as discrete organisational units with their own governance board and would provide finance (eg accounts payable) and human resource (eg payroll) services to a range of “customer agencies”, charging commercial fees for their services.

The centres would also provide some specialist services such as internal audit. Two of the centres would service the health and education/training sectors, which are two of the largest components of government.

The focus of the other shared service centres has not yet been finalised.

The planned changes to government purchasing arrangements will be phased in over the next two to three years.

It is proposed that all staff involved in buying goods and services would be employed by the Department of Treasury and Finance, but would continue to be located within individual agencies.

The aim of this change is to achieve consistent policies and processes across the entire government.

New capital works was considered a specialist area, distinct from the buying of goods and services, and therefore warranted separate consideration.

The planned “centre of expertise” for new capital works is designed to more closely align agencies that specialise in such work.

Facilities management, such as cleaning, grounds maintenance and security, was also considered a special category.

The Government is still developing its plan for this area.

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