Changes implemented in Federal Government agencies as a result of the Gershon review will create $109 million of savings in the 2009/10 financial year.
Half of that figure ($54.5 million) is immediately available for reinvestment by the same agencies according to a spokesperson for Minister for Finance and Deregulation, Lindsay Tanner.
In a statement, Tanner said the ICT reform program started after Sir Peter Gershon’s review of procurement and use of ICT in Federal Government had already achieved “substantial savings”.
"Savings of $569 million over the four years to 2012-13 were identified in the first phase of the reform program, including $109 million in the 2009-10 financial year,” Tanner said in the statement.
"With a second phase of reforms due to begin in 2010-11, progress towards our target of $1 billion in savings over the four years is on track.”
The Rudd government has committed half of all savings for reinvestment in ICT with the first installment available now with the $54.5 million.
According the statement several agencies have already put forward proposals for potential projects but Tanner’s spokesperson was unwilling to elaborate on which agencies.
Government analyst group, Intermedium head of consulting, Kevin Noonan, said the availability of the funds – which he claimed AGIMO put at $54.6 million – was pleasing.
“What they have done is have a number of review teams go around prior to the end of the financial year and worked out areas of savings,” he said. “They have come up with formulas for savings out of each government agency which they haven’t published.”
There are eight areas where the savings have been made: Re-negotiation of contracts with vendors; rationalisation of applications maintenance; overall reduction in contractor numbers; consolidation of servers and server virtualisation; better ICT management; rationalisation of desktops and laptops; mainframe capacity review and tuning; and conversion of contractors into public servants.
However, the percentage each area contributed to the reinvestment fund was not detailed and further information was not available such as what is meant by “better ICT management”, Noonan said.
“They haven’t identified the agencies and they haven’t identified where these savings will most lkely be applied,” he added.
The Gershon review was highly critical of the Government's inefficiencies with ICT management, recommending budget cuts of up to 15 per cent and other changes such as cutting the use of contractors by 50 per cent.
Tanner has also said the government will create a panel of datacentre providers to supply space and services to agencies during the development of the whole-of-government datacentre strategy instigated as part of the Gershon review. With the absence of a whole-of-government strategic plan for datacentres, the Gershon review claimed it could cost taxpayers up to $1 billion over 15 years if a more coordinated approach wasn’t implemented.