Millions Squandered In Merger
Sydney Morning Herald
Friday April 7, 2006
A MEGA-department to oversee planning in NSW fell $37 million short of projected savings and was disbanded after two years, leaving a trail of wasted spending on consultancies, recruitment bonuses and training seminars.
The squandered funds included $619,038 paid to three consulting firms for advice on setting up the short-lived Department of Infrastructure, Planning and Natural Resources. The government claimed the creation of the department in 2003 would cut staff, reduce costs and centralise decisions on land use. But it failed to achieve projected staff cuts in any of its five branches, running $48 million over budget on employee costs in its first year and $50 million in the second. Last year, within days of the resignation of the minister responsible for the department, Craig Knowles, Morris Iemma used his first speech as premier to announce he was disbanding it.Mr Knowles had failed to disclose the cost of creating the department despite repeated questions by Parliament's budget estimates committee. But some of the wasted programs and expenditure included: A series of team building workshops , costing $110,000. Two-day training programs for executives three months before the department was scrapped, costing $300,000. Recruitment bonuses for senior executives who resigned within weeks or months of the department being scrapped, costing at least $47,000.A spokesman for the department, Mark Skelsey, said there was "no easy-accessible, overall figure" for the cost of establishing the department. "It should be noted that the creation of [the department] led to a major saving for taxpayers," he said. The two programs cost about $410,000, including fees for venues, accommodation and catering, but had provided skills "which will be helpful for former managers, supervisors and team leaders, wherever they now work".The director-general of the Department of Planning, Sam Haddad, revealed to a parliamentary committee that the department had paid $496,102 to Nous Group, $82,111 to PricewaterhouseCoopers Security and $40,825 to the Ryder Self Group for consultancy services. An executive, Jennifer Westacott, was brought in from Victoria to head the department on a salary of $358,050, plus a $20,000 recruitment allowance. But she resigned within weeks of Mr Iemma's decision to disband the department. Another senior executive, John Scanlon, was paid a recruitment allowance of $27,000 and was on a salary of $257,000, but resigned after seven months in the job. The Opposition spokesman for infrastructure, Greg Pearce, said the creation of the department was "another example of the government's incompetence and mismanagement". "They wasted hundreds of thousands of dollars on restructuring departments and training resources without achieving the savings they were supposed to achieve," Mr Pearce said. Mr Iemma announced in February a plan to merge 14 agencies into two departments. An audit concluded that amalgamated departments be retained for "the longer term" to ensure establishment costs exceeded any savings. The department lasted two years and three months. A spokesman for Mr Iemma, Ben Wilson, said the two departments, now separate, had achieved their targeted savings for this year.
© 2006 Sydney Morning Herald