20/02/2018 - 15:15

Langoulant review says former govt didn’t have a plan

20/02/2018 - 15:15

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A review of Barnett government programs and projects has identified a raft of shortcomings in governance, project management and financial management, and listed Royalties for Regions as the single biggest problem.

Langoulant review says former govt didn’t have a plan

A review of Barnett government programs and projects has identified a raft of shortcomings in governance, project management and financial management, and listed Royalties for Regions as the single biggest problem.

Former under-treasurer and Chamber of Commerce and Industry of WA boss John Langoulant, known as the special inquirer, was appointed by the McGowan government to lead the review.

It inquired into 32 matters across Royalties for Regions, Health, Synergy, Western Power and the Burswood stadium.

The review was particularly critical of Royalties for Regions projects, which it said were characterised by poor business cases and cost overruns.

More broadly, it found that management of the Royalties for Regions program destabilised the former government’s financial management processes.

It also found the absence of a whole-of-state plan detailing the government’s priorities added to spending pressure.

Another broad theme was that the public sector lacked a sense of common purpose and understanding of due process, with the authority and capability of central agencies such as treasury and finance eroded.

Cabinet submissions proposing new projects were often accompanies by no business case or more often a poor business case.

The most extreme example of this was the awarding of a 20-year contract to UK company Serco to provide non-clinical services at Fiona Stanley Hospital.

“The absence of a standalone business case to underpin the $4.3 billion Serco contract was the worst case of financial risk taking for the state to be reviewed by the special inquirer,” today’s report stated.

The refurbishment of Muja power station, which ended up costing $308 million – double the original estimate – was highlighted as another example of poor project management.

Further examples were the Swan River pedestrian bridge and Perth Children’s Hospital.

The review was also highly critical of governance, transparency and accountability at Synergy and Western Power.

The review found several examples of good practice, including the St John of God Midland Hospital, Elizabeth Quay, Perth Stadium and Karratha Health Campus.

It concluded the jury was still out on several other projects, including the GovNext ICT project, the privately funded and operated car park at the QEII medical centre, and The Quarter commercial development in Karratha.

Mr Langoulant emphasised that his review focused on the business case and planning for these projects, rather than final outcomes.

In regard to Serco, for instance, the review said it was impossible to assess whether the contract represented value for money because of a lack of meaningful comparisons.

It noted an auditor-general's report that found the standard of non-clinical service delivery under the contract was acceptable and that it was adequately managed.

The inquiry made 107 recommendations, including that cabinet submissions must be prepared in consultation with all agencies with a ‘right to know’.

It recommended that ministers must be required to fund new expenditure by reprioritising existing budget allocations.

The review also called for improved transparency, accountability and openness.

Premier Mark McGowan said his government broadly endorsed the recommendations of the special inquiry.

“The damning report provides a clear guide to my government and future governments,” Mr McGowan said in a statement.

“My government will continue to strengthen governance, accountability, transparency and focus on the key economic and social benefits of government decisions when dealing with taxpayers’ money.”

Colin Barnett declined to meet the review team, instead sending a written response describing it as a political exercise.

Mr Langoulant said today he sought to provide a very balance analysis.

“I looked at this pretty objectively,” he told a media briefing.

“All the findings are based on fact.”

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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