Gershon review cuts to fund 200 tech hires

A recommendation by Sir Peter Gershon to cut Federal Government expenditure on IT contractors has saved $7 million to date, which the office of the Finance Minister Lindsay Tanner expects to result in the hire of 200 full-time IT positions within the public service.

The completed first phase of the ICT Business as Usual (BAU) review saw agencies identify "savings of $7 million through conversion of contractor positions to Australian Public Service staff positions," according to a spokesman for Tanner's office.

"This equates to the conversion of around 200 contract positions."

The Government spokesman was unable to confirm how many actual hires Federal agencies had made based on these savings.

Finance Minister Lindsay Tanner, in an extensive interview with iTnews discussing the Gershon reforms, conceded it was "probably too early" to rely on the data.

Tanner said the financial crisis may be as responsible for the cutbacks to contractors as the targets set in the Gershon report.

"Certainly there is shift underway," he said.

"But it's occurring at a time of dramatic events in the wider economy, which makes it difficult to form a view about. Two years ago, the money was flowing freely. Every time the Government turned around there was a few billion dollars of extra revenue.

"We have now moved to a much more financially constrained world. What that means is - although the evidence is there of belt-tightening in terms of the cutting back on contractors, some of that is inevitably just the result of agencies with tighter financial circumstances."

The interview, part one of which can be read here, sees Tanner take a softer line on spending cutbacks, admitting targets have been changed along the journey to date.

The $140 million of first phase 'Business As Usual' savings identified in the Gershon report, for example, were adjusted to $109 million by the Department of Finance.

Tanner told iTnews that the Department of Finance "discovered in retrospect" that there was inaccurate information submitted by agencies to the Gershon survey - "especially around the definition of what is 'Business As Usual' spend."

iTnews has since gone back to the Minister to ask for a more concrete example of where cutbacks originally counted as 'Business as Usual' have since been stripped from the calculations.

"A generic example of incorrect counting of ICT 'Business As Usual' [spend] during the Gershon Review is the treatment of staff and contractors involved in applications development and applications maintenance," a spokesman for the Minister said.

"In a number of agencies, the same group of staff are involved in both activities with applications development (generally being non-BAU) and applications maintenance (being BAU).

"During the initial review these staff may have been counted against applications maintenance rather than an amount apportioned to applications development, creating the situation where ICT BAU expenditure has been inflated by that amount."

Tanner insisted, however, that the Gershon targets will be met.

"Inevitably there are hiccups and difficulties, these things are never completely smooth, but it broadly remains on track and agencies have been working very well with the department," Tanner said.