Sir Peter Gershon’s recommendations on ICT contractors appear to have become one of the most controversial in his Report.
In the Report, Gershon recommends the total number of ICT contractors be reduced by 50% across the APS over the next two years, and the number of APS ICT staff be increased. He says this will save the Government an estimated $100million.
The logic supporting the recommendation refers to:
- Weak controls and scrutiny of the use of contractors
- The lack of a whole-of-government professional career structure for ICT staff
- The lack of any coordinated workforce planning to enable smoothing of demand between agencies, and
- Savings that can be achieved where tight controls over contractor use are applied, together with better recruitment, development and training of employees
Curiously, while the same factors were identified over 13 years ago, in the Clients First report, the resulting recommendations pointed in exactly the opposite direction.
Gershon also calls for the creation of a whole-of-government ICT career structure, together with a whole-of-government strategic ICT workforce plan. Let’s just think about those for a moment. They must happen, of course -- indeed, they should already exist -- as both Gershon and before him, the Clients First report concludes. But these are massive tasks with multiple stakeholders. Delivery within the timeframe envisaged by Sir Peter will be ‘challenging’.
Perhaps a better approach may be to break the problem down into more manageable tasks.
Neither ICT contracting capability nor public sector ICT staffing requirements are homogeneous. As Gershon points out, first there are the BAU requirements and staffing needs to meet what are essentially legacy systems, and secondly, the requirements associated with building capability. There are quite significant differences associated with (a) the skill sets and (b) the timeframe for each of these requirements, with the former having relatively static, run/administer/manage requirement, and the latter a requirements-gathering, business analysis, design, project manage, build focus.
There is a good case to be made to ensure BAU activities are supported by permanent staff based on cost, continuity, corporate knowledge and the ability to build a familiar APS career structure. Moreover, Intermedium’s labour hire contracts data indicates there are a substantial number of contractors who appear to be engaged in this type of work, for whom long-term, time-and-materials contracts are seasonally renewed every July and January. There is some sense in encouraging permanent employment to replace the cost and ensure valuable BAU continuity in this area. However, it is difficult to make the same case for the changing, phased requirements for skills associated with building capability.
There are alternative approaches to resolving the underlying problem and improving efficiency and effectiveness that do not appear in the Gershon Report. These include progressively shifting the basis for contracting associated with capability building away from time-and-materials body hire towards output or outcome based contracting, where effort and achievement are closely linked. This is also consistent with the programme/project management approach stressed elsewhere in the Report, together with the prominence given to benefits realisation measurement and earned-value approaches. Equally important, adopting this approach will enhance the agility and flexibility of the Government ICT workforce relative to a wholesale shift back to permanent employment.
Perhaps the Cabinet might be encouraged to request more information on alternatives, as it considers its response to the Report.