Service NSW, the NSW Government’s ‘one stop shop’ program, is proving popular with the public. But it has been expensive, and will take more than three years longer to recoup its investment than what the Government said.

Both the NSW Opposition and Fairfax Media have obtained copies of an unreleased KPMG report into Service NSW’s costs. The report was commissioned by the Government after the state’s Auditor General found last February that there were shortcomings in accountability and in monitoring the benefits of the program.

“Agencies involved in the initiative have not adopted an effective benefits realisation approach for the initiative. This means that no one is currently monitoring whole-of-government benefits and savings, and there is insufficient data available to fully value or identify individual agency and whole-of-government savings and benefits,” said the Auditor General.

Service NSW is part of a total revamp of the way NSW government agencies deliver their services. The strategy was initiated by Premier Barry O’Farrell after his massive victory at the 2011 state election, and has continued under his successors Mike Baird and Gladys Berejiklian.

A centrepiece to the strategy has been a consolidation of all data processing by the state’s agencies into just two data centres, from the hundred plus that had previously operated. A GovDC marketplace serves as a central clearing house for all IT services.

From the citizen’s viewpoint, the main effects of the Service NSW initiative have been the disappearance of motor registries and other stand-alone service centres and their replacement with multipurpose shopfronts. Many transactions that previously required a visit to an agency can now be done online.

More than 40 motor registries and 15 Fair Trading offices were closed, and replaced with multi-agency shopfronts and pop-up kiosks in shopping centres and libraries.

Even the critics of Service NSW’s costs admit that these initiatives are popular, but they are worried about the cost and the lack of oversight. The Auditor-General said the Government was overstating the benefits and understating the complexity of the Service NSW rollout.

”Service NSW has blown out by more than $100 million in its first two years of operation,” said the ALP’s Shadow Minister for Finance, Services and Property Clayton Barr.

“The Berejiklian Government was told in February that Service NSW had blown its budget,” he said, referring to the Auditor-General’s findings. Now he has obtained a copy of the subsequent KPMG report.

That report shows that the business case for the rollout of Service NSW, also known as the Accelerated Distribution Strategy (ADS), outlined a total budget in 2015-16 of $346 million – $278 million for operational expenditure and $68 million for capital expenditure.

The report reveals that $450 million was actually spent  – $329 million for operational expenditure and $121 million for capital expenditure – a blowout of $104 million.

It also shows that, while the business case predicted a payback period of seven years, KPMG now says it will now be ‘over ten years’.

“The KPMG report shows taxpayers will now be waiting more than a decade to reap the full benefits of the Service NSW initiative,” said Mr Barr. “The report blames bungled planning processes, delays and mispricing for the cost explosion.

“The Government’s secret report says the Service NSW rollout is off rails. Taxpayers will be footing the bill for more than a decade.

“This blowout explains why Service NSW hiked over 300 fees and charges for customers across NSW. My worry is if the fee hikes are not enough to plug the budget blackhole, they’ll take money from NSW schools and hospitals.

“With all parties committed to better customer service, it is sad to see customers having to dip into their pockets to pay for the Government’s mistakes.”