The NSW Government is committed to ensure that efforts are made to improve the efficiency and effectiveness with which services are delivered to the community. Accordingly I have approved the issue of Service Competition Guidelines which set out the Government's policy on encouraging competitiveness in the delivery of services, and provide advice on implementation of that policy. A copy is attached. Additional copies are being sent to Chief Executive Officers under separate cover.

While the policy and guidelines are applicable primarily to Budget Sector agencies, Government Trading Enterprises and other non-Budget Sector agencies are strongly encouraged to refer to them when developing performance improvement strategies.

Under the policy, managers are required to:

• know the costs of activities and the levels of performance being achieved;
• benchmark performance and processes against the best performing comparable organisations and alternative providers, where practicable;
• drive internal performance improvement to improve efficiency and realise potential gains;
• collaborate with other agencies in common service delivery arrangements; and
• consider inviting competitive bids for the provision of suitable activities where internal efforts have not realised substantial improvements in efficiency or quality of service.

Under previous service competition policies, there was a tendency to focus on lower value activities where the benefits were marginal. Whilst all activities are subject to the new guidelines, managers should give priority to pursuing best value for money in higher cost activities where the benefits are likely to be substantial.

The guidelines remind agencies to submit performance improvement strategies for the approval of their Minister, as appropriate to the case. Implementation of the policy should have regard to the Government's commitment to preserve employment in rural areas.

Progress by agencies in implementing the policy will be monitored by the Council on the Cost of Government.

Bob Carr
Premier 

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Updated May 2004: This memorada supersedes Memoranda 95-36; Circular 95-20; Circular 92-14; Circular 92-7; Circular 91-25; and Memoranda 91-24