NSW govt IT spending soars $800m in a single year

The NSW government has experienced its largest year-on-year increase in technology spending in recent years, with overall agency costs now estimated at more than $3.8 billion a year.

Answers to questions on notice from a recent parliamentary inquiry reveal IT spending across the NSW public sector ballooned to $3.80 billion during the 2017-18 financial year.

NSW government chief information and digital officer Greg Wells said this included “all ICT and digital (including personnel and services)”.

It represents an increase of around 19 percent on 2016-17, when IT costs sat at $3.08 billion – or 4.3 percent of total agency expenditure.

But when taking into account data from the last two available financial years (2015-16 to 2017-18), this figure jumps to 30 percent.

By comparison, overall state government IT spending climbed by 41 percent between 2012-13 and 2016-17.

The government has previously put its jump in IT spending down to its aggressive digital transformation efforts, which have only accelerated since 2016-17.

Since returning to power in March 2019, the government has created a $100 million digital investment fund aimed at accelerating IT projects that adopt an agile delivery mythologies.

The fund will help the government transition from a traditional CapEx and OpEx investment model – designed for owning IT assets – to a contemporary funding model for technology projects.

It is aimed at developing common platforms – or “state digital assets” – that can be reused across agencies, but also legacy modernisations and building capability among staff.

Earlier this month, however, the government revealed that $38.6 million had already been spent, leaving just 60 percent of funding to last until June 2021.

Reduced transparency over IT spending

The new data is the first to be released by the NSW government in over a year.

Spending was previously reported on an annual basis by the now Department of Customer Service as part of its technology benchmarking work.

The data was broken down by cluster and service tower, including cloud-based services, allowing the government to pinpoint spending trends.

The report also contained data on a range of other metrics such as the number of government websites, which will now be radically reduced under a new consolidation project.

But the department has not released any data on current IT spending since the fifth annual round of IT benchmarking was quietly released in August 2018.

A spokesperson told iTnews the department was “working on re-establishing aspects of the ICT benchmark reports in 2020 based on the beyond digital strategy”.

The inaugural digital and customer strategy, which was released last November, is intended to be a living, breathing document that responds to changes in technology and customer feedback.

“Responding to these challenges means initial 10-year investment plans for government clusters are in the process of being finalised are part of the FY 20/21 budget cycle,” the spokesperson said.

The department is also yet to release a number of complementary strategies that were promised for delivery last month.

This includes the NSW IoT policy, NSW AI ethics framework, NSW AI ethics strategy and a NSW Telco Authority operational communications strategy, as well as a series of ten-year plans for clusters.