Reseller News

Users of all-of-government common ICT capabilities not paying their way

Agency spending on the programme was $520 million in 2019, delivering savings of $500 million since 2010, DIA said
  • Rob O'Neill (New Zealand Reseller News)
  • 28 June, 2020 20:10

An array of shared ICT "common capabilities" developed by the Department of Internal Affairs (DIA) is still costing money to deliver, a report released last week revealed.

DIA developed and administers a number of common capabilities ICT services that can be used by any central or local government agency. 

Examples include the common web platform, enterprise content management as a service and desktop as a service. 

So far over 300 agencies, including 84 local authorities, are using one or more of these, spending a total of $520 million on them in 2019.

While that looks like a big number, DIA calculated the programme saved around $500 million since the first services were rolled out in in 2010.  

However, the common capabilities were brought together under one account in July 2015 and forecast to break even from 2020/21 financial year.

DIA reported its full year revenue 2018 from government information and technology services, for instance, was $7.5 million. That was nearly $1 million below budget due, the department said, to lower than anticipated demand for all-of-government common capabilities.

"The all-of-government common capabilities memorandum account is not sustainable, as savings remain with other agencies and do not return to the common capabilities memorandum account," DIA reported. 

"The department will be working with the Treasury on options to progress a sustainable solution while continuing to realise the direct (approximately $100 million per annum across agencies) and broader benefits from the common capabilities approach."

Projections indicate a break-even position will not occur due to revised projected costs of operation and service fees.

Work is therefore underway to identify options for reducing and/or eliminating that deficit in the medium term, DIA told Parliament.

Total subscriptions to individual common capability services total over 875.