State Services defends $25 million surge in ICT spend

The lion's share of the increases come from funding for the Identity Verification Service and the Government Shared Network, says SSC

New Zealand’s move to e-government is the main reason behind a surge in spending over the past five years by the lead public sector agency, the State Services Commission.

Spending on e-government contributed $25 million out of a total $32 million increase in costs, according to the Commission’s Budget Vote.

E-government initiatives now accounts for 40% of all SSC expenses. The initiatives contributed to an overall increase in spending of 125% over the last five years. In the 2003 financial year, SSC spent around $25 million, while in the 2008 year it is budgeted to spend $57.6 million.

The director of the Commission’s e-government programme, Laurence Millar, says the business case behind the investments being made is based on the delivery of future benefits.

The business case is “comprehensive”, he says, and has undergone economic analysis, as well as being reviewed by Treasury. The payback is in taking costs out of government as a whole, not out of the SSC.

The lion’s share of the increases come from funding for the Identity Verification Service and the Government Shared Network, Millar says.

Millar says each investment contributes towards the SSC’s strategic e-government goals of providing accessible state services and “joined-up” service delivery.

The e-government strategy means users will eventually have integrated access to services across many agencies. Millar says this is the overarching goal and the projects funded are a result of analysing what steps need to be taken to get there.

He says projects in areas such as secure email, the all-of-government portal and delivering collaboration tools have all contributed towards the strategy in the past. For instance, secure collaboration tools and document-sharing have contributed to projects as diverse as developing HR policy, to the creation of the London war memorial.

Similarly, the public sector intranet is a resource that, in its scope, sits between each agency’s individual intranet and the broader internet.

“It’s an intranet for all of government,” he says.

Other projects have also been developing over a number of years and require incremental investment, says Millar. An example here is the all-of-government authentication programme, which began around 2001 and has delivered the Government Log-on Service, delivering two-factor authentication for government users. The next stage of this development is the Identity Verification Service, which won $9 million in funding over two year in last month’s Budget and will allow for authentication of external users.

Millar says, with the basic building blocks in place, the SSC went looking for further opportunities for sharing and collaboration. Networking and the network infrastructure was one area identified as likely to deliver financial benefits and contribute to strategy.

The Government Shared Network is one result of this, and accounts for part of the increase in baseline funding of the SSC, but it is also replacing point-to-point solutions previously in place and, therefore, saving money in other agencies. It is being run as a stand-alone revenue/cost centre.

“The GSN initiative is expected to start generating a positive return from the middle of 2008,” Millar says.

“In addition, agencies are expected to realise financial and service-level benefits from their use of the GSN that will be reflected in their individual operating statements. These paybacks are in addition to the strategic benefits of removing barriers to increases in accessible service delivery and enhanced security.”

The GSN also helps answer persistent IT security challenges.

“Agencies have to up their security to comply with government policy,” Millar says. “The GSN delivers that.”

It also relieves agencies having trouble sourcing security expertise, to protect their perimeters, of this burden, he says. With the GSN, such scarce resources can be shared between user agencies. The GSN also delivers higher capacity for the same cost.

Millar says the creation of infrastructure competition through the GSN was not part of the business case for the project. “It is an effect, not the rationale.”

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Tags government shared networkidentity verification systemstate services commision

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