New South Wales government aims to save $1 billion with procurement reform

17 August 2012
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17 August 2012 | Kamalpreet Badasha

The government of New South Wales (NSW) in Australia expects to save AUS$1 billion (£665 million) over the next four years by reforming procurement.

The state government has published its response to a recent study by the NSW Commission of Audit, in which it agreed with six suggested points for reform, which will allow it to save AUS$199 million (£132 million) through improved purchasing by 2013.

As part of the first recommendation that said spending decisions should be made at a local level, a framework has been developed to allow efficient sourcing of goods with decisions made by agencies with specialist knowledge. The government response stated 15 local health districts are now managing all hospital and health service delivery.

The second is that public sector projects should include outsourcing and private sector partnerships. A public-private partnership has been implemented for the development of a precinct at Darling Harbour in Sydney. Another recommendation was to increase the transparency of decisions and to provide evidence to support this. An example cited is the Shared Services Reform Program, which aims to use a framework to streamline decisions.

Services providers have been restructured into clusters of similar areas to increase collaboration. Transport for NSW is a cluster that consolidates all transport planning and policy functions into a single authority, meaning all road and public transport services now work together. Another example is the NSW Government ICT Strategy 2012, which resulted in the construction of two data centres replacing numerous ones cutting costs and preventing duplication of work.

Future procurement reforms include the establishment of a NSW government procurement board, along with a review of the procurement policy and related documents. It also wants to raise procurement knowledge and skills, and improve spend data.

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