I refer to Premier's Department Circular No. 2001-67 Strategies to Support the Achievement of MOU Savings issued 21 December 2001. That Circular reported the Cabinet Decision of 10 December 2001, confirming the Government's commitment to achieve a 6% productivity improvement from all agencies, over the period January 2000 to June 2004.
In order that Ministers and Cabinet are kept fully informed of progress being made by agencies to achieve the required productivity savings, the following revised reporting arrangements are to be put in place immediately.
Ministers are to submit a full set of portfolio agency progress reports to the Cabinet Standing Committee on the Budget. This will be in lieu of the agency reports being provided to Premier's Department, as has been required to date. The first progress report under this revised arrangement is due on 1 May 2002. Further reports on progress towards the productivity savings may be required every two months thereafter.
The new reporting arrangements are designed to give Ministers and Cabinet a more comprehensive picture of measures to improve productivity across the Government sector.
The Progress Reports are to identify all projects to improve productivity. This will mean that the Progress Reports should place projects in one of the following categories:
A. Projects Contributing to the 6% Savings Requirement
B. Projects Contributing to Other Budget Requirements
C. Projects Resulting in Increased Output or Service Improvement
Further, within each of the above three categories, projects under way or committed should be clearly separated from projects under development or consideration.
Savings initiatives and estimates of savings are to be reported in Table 1 Savings and Productivity Initiatives. Agencies should ensure that they also address all the items listed in Table 2 Areas of Potential Savings.
Where the estimated ongoing savings available from Category A projects in 2004/05 do not meet the full 6% savings requirement for 2004/05, Ministers will need to outline their plans and/or options to meet the shortfall in savings. These strategies should be outlined in a covering letter attached to each Progress Report, along with the agency savings target agreed to by Treasury. This will allow the Cabinet Committee to have before it a full range of options for consideration.
The progress reports will be considered along with progress reports on the shared corporate services strategy being prepared in accordance with Premier's Department Circular No. 2002-01 Implementing The Shared Corporate Services Strategy.
It should be noted that the Departmental Savings Task Force will continue to regularly report to Cabinet on agencies' progress in achieving the required savings. An assessment by the Task Force that an agency has comprehensively reviewed options and developed effective plans will be taken into consideration in 2002/03 Budget preparations and Forward Estimates.
The Government wishes to ensure that agencies have undertaken a thorough review of areas that will deliver savings. It is important that agencies drive the implementation of savings strategies.
Issued (Branch): Public Sector Management Office
Contact: Cathy Hellams
Telephone no: (02) 9228 3564
File no: PSMO/03639
Date: 10 April 2002
This memorandum does not superseded any other Memorandum/Circular
AREAS OF POTENTIAL SAVINGS
Whole of Government
1. Processing activities - list each area e.g. finance, HR
- simplification, process reengineering
- location (is this an activity that could be located in a
Information and Communication Technology Strategies
2. Telecommunications - contracts and service agreements
3. Computing hardware - purchase versus leasing and existing arrangements
4. Joint Agency initiatives - e.g. with the Department of Information Technology
5. Electronic Service Delivery
6. Call Centre technology consolidation
7. Video Conferencing
8. Emerging technologies - e.g. hand held computers
9. Aggregation - use of government-wide contracts
- levels of decision making on procuring outside
- within agency
- within Ministerial portfolio
- within geographical region
- across public sector
10. E-procurement - implementation of key strategies identified in
NSW Government Electronic Procurement
Implementation Strategy 2001
11. Practices - procurement capability relevant to current needs
- compliance with NSW Government Procurement
12. Energy management - Meeting energy management targets
13. Motor vehicle allocation
14. Motor vehicle fleet management
15. Printing and publications - use of technology (e.g. computer templates,
17. Facilities management - e.g. building maintenance
18. Contracting and external service providers
Other Operating Costs
19. Accommodation - rental costs
- space utilisation ratio
- departmental housing
- conformance with Government Accommodation
20. Debt management
21. Training costs
22. Advertising / Public Relations
23. Travel costs
24. Risk management
25. Insurance premiums
26. Occupational Health and Safety and Rehabilitation performance
27. Contract employment - use of contractors
28. Organisation structures and management layers
29. Overtime management - trends, targets
- levels with delegated authority
- how decisions are made
30. Leave management - trends and targets
31. Rostering practices
Agency Specific Initiatives
33. Working with other agencies to achieve operational efficiencies and potential savings
34. Duplication of functions across agencies
35. Benchmarking - against other similar organisations e.g. intra and inter state, government, non-government
36. Other specific initiatives that are relevant to the business of the agency