The New South Wales government’s key back-office support provider, ServiceFirst, has become the latest state organisation to potentially have its management hived off to the private sector.

The Department of Finance and Services (DFS) now expects a scoping process for privatised  delivery to be finished by late 2014, with private sector experts in shared services being invited to provide a “new delivery model” to reduce the operating costs of ServiceFirst.

Created by the previous Labor government in 2008, ServiceFirst has been the state government’s frontline provider to public sector agencies in end-to-end transactional services, human resources, ICT, analysis, financial reporting and compliance.

However its existence and mandate has always constantly under challenge from powerful departments and agency heads unhappy with the limited flexibility of a centralised model.

The shared services model has had chequered history in Australian governments with Western Australia, Queensland and Victoria all experiencing cost and governance issues.

Now Minister for Finance and Services Andrew Constance has called for the “shared services community” to register their interest to “present options and respective cost benefits for alternative service delivery models”.

Part of a plan by the NSW government is to recruit the expertise of the private sector to create ways for the government to “deliver efficient outcomes and better value for NSW taxpayers”.

Although ServiceFirst provides a “valuable service” to the NSW government, Mr Constance said if there’s a better way to support agencies and deliver services, “we’re keen to pursue it”.

ServiceFirst employs 350 staff that service 46 clients and approximately 7,500 public servants, but the outsourcing of its management puts a big question over the future of its core personnel once the “new delivery model” is created.

“We want to achieve value for money from shared service providers and we are open to different delivery models if it leads to better outcomes, reduced costs and increased productivity.”

The latest shake-up is not the first time the NSW Coalition government has pursued outsourcing to help the government create cost savings in the name of “efficiency”.

In September 2013, Mr Constance invited private sector organisations to manage NSW government office accommodation, which is normally operated by Government Property NSW at $7 million annually.

At the time, Mr Constance said the government was giving industry an opportunity to “work with us to deliver a better deal for taxpayers”.

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