BY JIM McILROY
The federal government's program to outsource public sector information technology (IT) services to private industry has taken a big hit with the release of the Humphry Review on January 12. The review criticised the outsourcing initiative as seriously flawed and financially unsound. Late last year, auditor-general's office slammed the IT outsourcing program.
Finance minister John Fahey sold the plan to the public as a means of saving $1 billion over five years. The auditor-general found the claimed savings were grossly overestimated — the true figure was only $70 million — and that the plan disrupted the public sector.
Media reports have revealed that the US multinational company Shaw Pittman, which was the sole adviser to the government's outsourcing program, received $17 million in consultancy fees for the bungled project. The chief government bureaucrats in charge of the program received hefty performance bonuses on top of six-figure salaries for their part in the fiasco.
The Community and Public Sector Union on January 16 welcomed the release of the Humphry Review. "The findings of the review are great news for public sector workers and come after three years of direct action and lobbying by [the] CPSU in support of public sector jobs and services", according to a CPSU bulletin.
The CPSU bulletin noted that the key recommendations of the review call for the devolution of decision-making about IT outsourcing to individual agency heads; the removal of the centralised management role of the Office of Asset Sales and Information Technology Outsourcing, located in Fahey's department; and "an immediate stop to outsourcing ... until concerns over implementation risks are addressed".
The CPSU statement pointed to problems with the status of outsourcing in agencies where it has already happened or is under way. The union also noted that "the government's discredited approach to IT outsourcing is also being used to market test, and eventually outsource, other government functions like corporate services". It also emphasised the problem caused by funding cuts to agencies in anticipation of savings which have not occurred, and called for the "return of money taken out of agency budgets by the Department of Finance ahead of anticipated savings".
"While the outsourcing war is far from over, the battles of the last few months have delivered a significant victory for public sector workers. In particular, IT staff and members in CSIRO and other science agencies deserve special mention for the way they took this important fight up to the government", the CPSU bulletin stated.
Workers at CSIRO took industrial action in opposition to the outsourcing of IT in their agency, showing leadership for the rest of the CPSU in this critical battle. The abandoning of a centralised approach merely ends stage one of the fight.
As Fahey stated on January 15, "All that has changed is that the implementation will be done by individual agencies and not controlled centrally as it has been since 1997 when it began". The government's ideologically driven approach to outsourcing and "market testing" must be challenged head-on.
In light of the setback to government plans, the time is ripe for an escalated industrial and political campaign against further attempts to market test or outsource public sector functions in any area, whether initiated directly by the government or by individual agency management, under government direction.