NSW Government agencies have been given the go-ahead to submit applications to acquire portions of the state’s ICT Reinvestment Pool.
The Reinvestment Pool consists of half of the $79 million generated through the initial phase of the Better Services and Value PlanICT Review Taskforce.
Launched in 2009 in an attempt to improve value-for-money across government expenditure, the ICT component of the plan requires that agencies find savings in their baseline ICT expenditure equivalent to 5 per cent for the first half of the 4 year program, and 10 per cent for the remainder. 50 per cent of these savings are to be channelled back into efficiency-improving ICT capital projects through the Reinvestment Pool.
A NSW Treasury spokesperson has confirmed to Intermedium that the second phase of the review is due for completion by September 2010, and is projected to achieve further savings of $158 million per annum from 2011-12 onwards.
NSW agencies that fall within the scope of the Reinvestment Pool will have the next 2 months to prepare and submit preliminary business cases in an attempt to secure project funding.
All agencies that have contributed to the savings pool are eligible to apply, and will claim equal standing in the judging process.
“All Agencies that apply for funding from the ICT Reinvestment Pool will go through the same evaluation process, regardless of their contribution amount to the pool”.
“Each project will be assessed against their merit and evaluation criteria as set out in the Treasury Policy Paper,” the Treasury spokesperson said.
Theprojects are most likely to be successful under the scheme are those with objectives to improve the efficiency of an existing function at the agency, and thus have the potential to generate further savings in the long-term. Examples outlined in the Policy and Guidelines Paper include:
- Replacing legacy software or hardware that generate high maintenance costs;
- Server virtualisation;
- Projects that will generate a return on investment; or
- Amalgamation of services at a cluster level.
The committees in charge of evaluating the submissions will also look kindly upon projects which aid in the implementation of the NSW Blueprint for Shared and Corporate Services, the plan to consolidate all corporate services procurement into 6 clusters, each serviced by a single provider.
The State’s biggest ICT purchaser, NSW Health, will be absent from the scheme, as it falls under unique funding conditions.
According to the Treasury spokesman, “NSW Health are required to meet all agreed savings targets as part of the ICT Review. Due to the funding arrangements, they are not required to contribute to the ICT Reinvestment Pool”.
Funding allocations will only be given out in lots greater than $250,000, and the policy documents make clear that the Pool will not be used to fund any maintenance or minor enhancements, current projects that are performing poorly, IT replacements that do not enhance capability or any operational costs of current ICT environments.
The process of assessing submissions will parallel the NSW Budget timeline, which culminates in the release of the state budget papers in June 2011. Consideration is due to be completed in March with the initial reinvestment to be delivered to agencies as part of their 2011-12 budget allocation. However, it should be noted that the NSW election falls on 26 March 2011.