Federal departments are increasingly spending more on overhead costs, from technology to communications, while reducing all other costs that are being targeted by the Conservative government's sweeping spending review.
The trend of rising overhead costs comes at a time when the government is counting on big savings by revamping its internal services to "transform" how government operates, manages its people and serves Canadians. The government already has several internal services projects under way, including Shared Services Canada, but overhead costs continue to climb.
The increase was flagged in a report by the Office of the Parliamentary Budget Officer, which examined departments' predicted spending in the Main Estimates for 201213. The Estimates don't include the cuts in the Conservatives' deficit-reduction plan, which will be announced in the budget.
Overall, departments are already planning to spend less on direct program spending except for internal services, which are rising at an accelerated rate. They are seeking an additional $800 million to cover overhead, which includes communications, human resources, information technology and financial management. That's an eight-per-cent increase over last year, which jumped three per cent from the year before that.
This is a worrisome trend because the promised efficiency savings generated by modernizing internal services are aimed at freeing up money for front-line services and programs for Canadians.
The Conservatives launched a sweeping spending review into $80 billion in direct program spending. Departments were asked to deliver plans for five-per-cent and 10-per-cent reductions to save up to $8 billion annually.
It's unclear why the government's overhead costs are increasing when departments are under the gun to save money.
The government is counting on savings from the muchtouted creation of Shared Services Canada a year ago to centralize and manage the government's information technology services. The Conservatives also created two new centres in New Brunswick to modernize the handling of pay and pensions for federal workers.
The government spends about $5 billion a year on IT. Shared Services Canada is the first step toward managing the government as a single enterprise rather than 120 independent departments running their own networks, data centres and email systems. Similar government-wide approaches are expected for human resources and finance.
Shared Services plans to invest $375 million - out of savings - over eight years to roll 100 email systems into one, 300 data centres into 20 and consolidate 3,000 networks across departments. The PBO has asked for its projected savings, but they have not been provided.
The administrative services review the Conservatives announced in the 2010 budget to find ways to save money and improve service focused on services to Canadians and reducing the costs of internal services. Its work is also feeding into the upcoming budget.
The signs are that the government is pinning high expectations on using technol-ogy to "transform" the public service while reducing operating costs. Privy Council Clerk Wayne Wouters has made public service "renewal" by modernizing the workplace a top priority.
Last week, the prime minister's advisory report on the public service called Shared Services the kind of "transformative" project the government must pursue.
David Emerson, who cochairs the influential advisory committee, said internal services such as networks, email and data centres should be run centrally like "utilities" to reduce operating costs, which can then be invested in new technology to improve services and efficiency.
With those expectations, the increase in overhead costs highlights the major challenge the government faces in recouping savings from technology.
The big question is how much of the government's savings in the budget will come from "efficiency" savings and "transformation."
AUDITOR GENERAL TO PROBE ALLEGATIONS OF SHODDY WORK AT DEFENCE CONSTRUCTION
The auditor general has been asked to investigate allegations of shoddy construction work and contracting practices at Defence Construction Canada.
François Guimont, deputy minister of Public Works and Government Services Canada, told MPs at the Commons government operations committee Monday that he referred the allegations to the auditor general, which is currently conducting an audit into Defence Construction. That audit is supposed to be completed in the fall.
Guimont said the auditor general has indicated the audit may be too far along to expand the scope to include the allegations. If so, he said the department will conduct its own audit with the help of National Defence, which uses the crown agency for construction and to handle its major real estate projects.
The allegations surfaced in a report by the Union of National Defence Employees, alleging that taxpayers are paying for shoddy work at Defence Department buildings and are being overcharged by private contractors for services in military installations across the country. Defence Construction has defended its staff and argues taxpayers are getting value for money.
Original Article
Source: ottawa citizen
Author: Kathryn May
The trend of rising overhead costs comes at a time when the government is counting on big savings by revamping its internal services to "transform" how government operates, manages its people and serves Canadians. The government already has several internal services projects under way, including Shared Services Canada, but overhead costs continue to climb.
The increase was flagged in a report by the Office of the Parliamentary Budget Officer, which examined departments' predicted spending in the Main Estimates for 201213. The Estimates don't include the cuts in the Conservatives' deficit-reduction plan, which will be announced in the budget.
Overall, departments are already planning to spend less on direct program spending except for internal services, which are rising at an accelerated rate. They are seeking an additional $800 million to cover overhead, which includes communications, human resources, information technology and financial management. That's an eight-per-cent increase over last year, which jumped three per cent from the year before that.
This is a worrisome trend because the promised efficiency savings generated by modernizing internal services are aimed at freeing up money for front-line services and programs for Canadians.
The Conservatives launched a sweeping spending review into $80 billion in direct program spending. Departments were asked to deliver plans for five-per-cent and 10-per-cent reductions to save up to $8 billion annually.
It's unclear why the government's overhead costs are increasing when departments are under the gun to save money.
The government is counting on savings from the muchtouted creation of Shared Services Canada a year ago to centralize and manage the government's information technology services. The Conservatives also created two new centres in New Brunswick to modernize the handling of pay and pensions for federal workers.
The government spends about $5 billion a year on IT. Shared Services Canada is the first step toward managing the government as a single enterprise rather than 120 independent departments running their own networks, data centres and email systems. Similar government-wide approaches are expected for human resources and finance.
Shared Services plans to invest $375 million - out of savings - over eight years to roll 100 email systems into one, 300 data centres into 20 and consolidate 3,000 networks across departments. The PBO has asked for its projected savings, but they have not been provided.
The administrative services review the Conservatives announced in the 2010 budget to find ways to save money and improve service focused on services to Canadians and reducing the costs of internal services. Its work is also feeding into the upcoming budget.
The signs are that the government is pinning high expectations on using technol-ogy to "transform" the public service while reducing operating costs. Privy Council Clerk Wayne Wouters has made public service "renewal" by modernizing the workplace a top priority.
Last week, the prime minister's advisory report on the public service called Shared Services the kind of "transformative" project the government must pursue.
David Emerson, who cochairs the influential advisory committee, said internal services such as networks, email and data centres should be run centrally like "utilities" to reduce operating costs, which can then be invested in new technology to improve services and efficiency.
With those expectations, the increase in overhead costs highlights the major challenge the government faces in recouping savings from technology.
The big question is how much of the government's savings in the budget will come from "efficiency" savings and "transformation."
AUDITOR GENERAL TO PROBE ALLEGATIONS OF SHODDY WORK AT DEFENCE CONSTRUCTION
The auditor general has been asked to investigate allegations of shoddy construction work and contracting practices at Defence Construction Canada.
François Guimont, deputy minister of Public Works and Government Services Canada, told MPs at the Commons government operations committee Monday that he referred the allegations to the auditor general, which is currently conducting an audit into Defence Construction. That audit is supposed to be completed in the fall.
Guimont said the auditor general has indicated the audit may be too far along to expand the scope to include the allegations. If so, he said the department will conduct its own audit with the help of National Defence, which uses the crown agency for construction and to handle its major real estate projects.
The allegations surfaced in a report by the Union of National Defence Employees, alleging that taxpayers are paying for shoddy work at Defence Department buildings and are being overcharged by private contractors for services in military installations across the country. Defence Construction has defended its staff and argues taxpayers are getting value for money.
Original Article
Source: ottawa citizen
Author: Kathryn May
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