What is the Problem Represented to Be in Expenditure Review of Department of Education and Traini...

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What is the Problem Represented to Be in Expenditure Review of Department of Education and Training (DET)? by Mind Map: What is the Problem Represented to Be in Expenditure Review of Department of Education and Training (DET)?

1. Goals: Ensure Government Spending is Targeted, Effective and Fiscally Sustainable (p3)

2. Goals: Further Business Improvement within DET (p3)

3. Context: The NSW State Government is facing significant budget pressure with costs increasing at a faster rate than revenues. (p4)

3.1. While efficiency must always be measured against quality of outcomes, high level benchmarking of both school-related and TAFE-related expenditure suggests that there are opportunities to drive further savings at the same broad outcome levels

3.2. DET accounts for almost one quarter of the state budget (4)

3.2.1. Nominal unit (per enrolment) costs have continued to grow at an average of 5.0% per annum over the last 5 years. (4)

3.2.2. Nominal unit cost have risen faster in "government schools" than in "TAFE" - DET's two main services (4)

3.3. Over four years the Department may be required to deliver over $1b through wave offsets and efficiency dividend

4. Solution: We have identified a range of POTENTIAL OPPORTUNITIES within the State and Regional Office (including Corporate services), Government and Non - Government Schools and TAFE (p9)

4.1. State and Regional Offices

4.1.1. Problem: STAFF RELATED: NSW appears to have approximately 1000 more central and regional staff than Victoria, equivalent to a potential efficiency improvement opportunity in the order of $25-$75 million (p9)

4.1.1.1. Devolve responsibilities to schools (23)

4.1.1.1.1. Solution: DEVOLUTION of some responsibilities to schools + SIMPLIFIED SCHOOL FUNDING MODEL could drive efficiency by reducing the number of central support staff required (potentially worth $15-25m) p9

4.1.1.1.2. REQUIREMENTS FOR IMPLEMENTATION (34)

4.1.1.1.3. Under a devolved model what is likely to change: (36)

4.1.1.1.4. May present an EFFICIENCY OPPORTUNITY (37)

4.1.1.2. Restructuring retained State and Regional Office

4.1.1.2.1. Delayering

4.1.1.2.2. Address Award Structures (pay people less)

4.1.1.3. Reduce duplication and overlap

4.1.1.3.1. Solution: Reduce areas of duplication, reorganise shared corporate services, leverage LM ($15-$20m) BR and restructure retained SRO ($25-$40m) to drive staff savings (p9)

4.1.1.4. Strategic Planning & Regulation (SP&R

4.1.1.5. Reorganisation of shared corporate services, including leveraging LMBR

4.1.1.5.1. Change model from existing where Shared corporate staff serve institutes and school regions, to corporate staff within TAFE, and Corporate staff for school regions

4.1.1.5.2. Labor saving achieved by LMBR and SAP

4.1.2. NON STAFF RELATED

4.1.2.1. Driving procurement efficiency

4.1.2.1.1. Solution: Non FTE savings are also possible by improving procurement efficiency $15-$40m and optimising the payment cycle ($10m-15m+) (p9)

4.1.2.2. Adjusting Staff Payment Cycle , Accounts receivable and accounts payable

4.1.2.3. Achieving ICT savings

4.2. Government Schools

4.2.1. Largest area is workforce productivity for school based employees which is addressed in a separate review (9) Out of Scope (p58)

4.2.1.1. High level comparisons suggest NSW has approximately 9,000 or 12% more school-based (teaching and non-teaching) staff than Victoria, which may be largely the result of policy decisions such as class size. The equivalent dollar cost size of this gap is in excess of $750m (p58)

4.2.1.1.1. $750m spend on teaching staff (not examined elsewhere in this scan) (p58)

4.2.1.1.2. $150m spend on non-teaching staff at schools (examined in part, e.g under Special Education (p58)

4.2.2. Restructure fast growing Special Education and equity area (9)

4.2.2.1. Spend on special education is by far the largest component equity and welfare expenditure and has grown by 11% per annum over nine years to 2009/10, driven by both an increase in student numbers and cost per student (p58)

4.2.2.2. Victoria introduced reform initiatives in 2005 which stemmed growth of special education and suggests a broad opportunity exists to streamline NSW special education/equity programs (58)

4.2.2.3. A different approach is needed to manage growth in particular special education programs (Integration, support classes in regular schools, support classes in special schools and learning Assistance Program) due to different growth drivers (58)

4.2.2.3.1. Tackle growth in enrolments in integration programs (9)

4.2.2.3.2. Tackle growth in support classes (9)

4.2.2.4. Program of work required to develop alternate resourcing model including

4.2.3. The challenge is to ensure federal anti-discrimination legislation is satisfied as is the sensitivity relating to perception that students with disabilities will be further disadvantaged by any Government policy changes. (58)

4.2.4. Reduce asset footprint (9)

4.2.4.1. Join small and nearby schools - will save $18-$25m money from school based staff, remainder of savings from non staff costs such as cleaning and maintenance and SRO staff (9)

4.2.4.2. Revenue from asset sales (9) - One off

4.2.5. Cleaning

4.2.5.1. Increase productivity (9)

4.2.6. Maintenance (9)

4.2.7. Sale of land (9)

4.2.8. Other opportunities yet to be explored including Student Transport Scheme (9)

4.3. Non Government Schools

4.3.1. shift funding approach to align with students needs could drive accountability and save $60m (10)

4.4. TAFE

4.4.1. Hold Institute DIrectorse accountable for end to end business

4.4.1.1. Provide I.D.s incentives to deliver savings

4.4.2. Continued focus on workforce productivity $100m + in matching other states

4.5. HOW TO MAKE IT HAPPEN

4.5.1. Treat the efficiency program as a major business case that needs to deliver real bottom line benefits (18)

4.5.1.1. Invest to realise many of the changes

4.5.1.2. resource program with high quality people (18)

5. Government Schools constitute the largest category of spend. Several large opportunities are apparent (p9)

5.1. By far the largest opportunity within Government schools is improved workforce productivity on a school-based employee cost base of $6.6b (out of scope) p58

5.1.1. Workforce productivity for school-based employees, which is being addressed in a separate review.(p9)

5.1.2. High level comparisons suggest NSW has approximately 9,000 or 12% more school-based (teaching and non-teaching) staff than Victoria, which may be largely the result of policy decisions such as class size. The equivalent dollar cost size of this gap is in excess of $750m (58)

5.1.2.1. $750m spend on teaching staff (not examined elsewhere in this scan) (58)

5.1.2.2. -$150m spend on on-teaching staff at schools (examined in part, e.g. under Special Education'

5.1.2.2.1. Foot note - Note that overall NSW spends $750m+ more than a comparable jurisdiction on school-based staff - costs that are not examined elsewhere in this scan. (58)

5.1.2.3. As part of the benchmarking exercise with Victoria, a number of significant differences were observed (63)

5.1.2.3.1. At the high level, the total difference in "in school" staff between NSW and Victoria appearws to be approximately 9,000 FTES or 12% 63

5.1.3. Footnote P9 states for this: "subject of a separate review on school-based staff, however we estimate opportunity based on Victorian benchmarking to be int eh order of $750m+ (p9)

5.2. Restructure the fast growing special education and equity area (potentially worth $100m) through tackling (p9) There may be an opportunity to restructure the fast growing equity and welfare area, which is currently worth about $1.6b or 19% of recurrent school expenditure. (58)

5.2.1. Spend on special education is by far the largest component equity and welfare expenditure and has grown rapidly at 11% per annum over nine years to 2009/10, driven by both an increase in student numbers and cost per student (58)

5.2.2. Victoria introduced reform initiatives in 2005 which stemmed growth of special education and suggests a broad opportunity exists to streamline NSW special education/equity programs (58)

5.2.3. A different approach is needed to manage growth in particular special education programs (integration, support classes in regular schools, support classes in special schools and Learning Assistance Program) due to different growth drivers (58)

5.2.3.1. Growth in cost of support classes. More work is required to explore alternatives in more detail. (p9)

5.2.3.1.1. Growth in support classes (54%) of special education spend) is driven by cost per student. Further work required to explore alternatives in more detail. (58)

5.2.3.2. Growth in enrolments in the integration program (building on planned trial of School Learning Support program) (p9)

5.2.3.2.1. Growth in integration program (11% of special education spend) driven by increase in student numbers, particularly students with autism and mental health. The proposed School Learning Support Program does appear to be addressing this growth in student numbers and could avoid $20-$25m in cost increases pa. However, there is a risk students may shift from integration to support classes or SSPs (58)

5.2.4. The challenge is to ensure federal anti-discrimination legislation is satisfied as is the sensitivity relating to perception than students with disabilities will be further disadvantaged by any Government policy changes. (58)

5.2.5. Program of work required to develop alternate resourcing model including review of eligibility criteria, improved targeting of funds to need level and possible streamlining gof program administration (p59)

5.2.6. Equivalent examination of equity programs should be done.

5.2.7. Graph: Equity and welfare programs account for -20% of all Government school spend. Sorts spend into categories : core services/equity programs/strategic programs/other school expenditure, and vertical access into $b eachstep being $2b. (66)

5.2.7.1. Graph: Of the equity and welfare programs, special education has grown rapidly at 11%pa over nine years to FY09/10 (670

5.2.7.1.1. GRaph: some special education, indigenous and social economic growth due to increase in cost per child. Graph shows special ed significantly increased per child as compared to other equity groups (68)

5.2.7.1.2. Viuctoria introduced a number of education reform initiatives in 2005 which stemmed growth of special education (70) 2 grapsh showing budget and student numbers for disabilities 2000 - 2009 First graph is capping student numbers for growing language disorders egment - previously used to fund teachers aide for individual students, now funds used to devleopa specific language support program for all schools. Restricted individual fundint to students with severe language disorders. Second shows range of initiatives : outsourced assessments for some disability types, revised Eligibliyt critereia, REvised Educational Needs Questionnaire, Resourcing Agreements with Special Schools (70)

5.3. Reducing the asset footprint through joining small and nearby schools could be worth $40-$50m in recurrent costs (p)

5.3.1. ($18-25m from school-based staff, remainder from non-staff costs such as cleaning and maintenance, and State and Regional Office staff) (p9)

5.3.1.1. Reducitn the number of schools will reduce recurrent costs such as school staff, maintenance and cleaning, and some central costs. In addition, sale of underutilised assets will provide a one-off benefit, though some funds will need to be reinvested in nearby schools to accommodate additional students (59)

5.3.2. with an additional $375-$450m available through assets sales, though some funds would have to be re-invested. (p9)

5.3.3. Largest opportunity lies in amalgamation of small and nearby primary and secondary schools (59)

5.3.3.1. Opportunity to close 80 primary schools (-25 metropolitain within 1.6km and -55provincial schools within 5km of another primary or central school) worth about $15-$20m pa ($3-5m in school-based staff costs, remainder from global funding. (59)

5.3.3.2. Opportunity to close 20 secondary schools (-15 metropolitain within 2km and -5 provincial within 10km of another secondary or central school) $25m - 30m pa ($15-20m in school-based staff cost, remainder from global funding, cleaning, maintenance and State and Regional office staff costs) and $200-250m asset sales. (59)

5.3.4. Very small additional opportunities lie in combining small primary schools with nearby secondary schools in provincial and remote areas. (59)

5.3.5. Performance as measured by NAPLAN for primary schools and Y10 school certificate English fo rsecondary schools varies widely for small schools. (59)

5.3.6. Possible to position these initiatives as part of a broader school regeneration or building schools for the future program (59)

5.4. Opportunities exist within cleaning (p9)

5.4.1. $20-75m particularly through increasing cleaning productivity (p9)

5.4.2. High-level benchmarking suggests shifting to Victorian $/sq m might save up to $75m pa (60)

5.4.2.1. Of this $75m pa, DET have estimated $17-35 pa can be realised by increasing cleaning productivity as measured per square m/hour (60)

5.4.3. A further $1.5m may be realised by reducing contract management fees charged by Department of Commerce for cleaning and maintenance contracts (60)

5.4.4. Further work required to realise other opportunities: achieving better value through bundling of cleaning and maintenance contracts, cost difference in cleaning per hour.

5.5. Opportunities also exist within maintenance (p9)

5.5.1. $5-7m but detailed work is required to realise them. (p9)

5.5.1.1. NSW maintenance costs appear high relative to other jurisdictions; may be opportunities to better target and increase effectiveness of maintenance spend. (60)

5.5.1.2. Most reviews and initiatives undertaken by DET have identified opportunities to improve effectivenss of maintenance spend, however, have not identified any clear efficiency opportunities (60)

5.5.1.2.1. Devolution of work prioritisation to school principals my bring $2-$2.5m pa ($10-13m over five years). However this is counterbalanced by alternate view that it may increase costs by $0.6m pa (60)

5.5.1.3. May be further opportunities to drive value through bundling of maintenance with cleaning contracts (60)

5.5.1.4. In addition, there is an opportunity to cap total number of general assistants in NSW to ensure any increases in entitlement are staffed from existing pool of GAs instead of additional funding. (60)

5.6. Opportuniteis also exist to further reduce asset footprint through selling land in excess of standard provision for schools ($350-400m on-off) (p9)

5.6.1. Possible to realise $350m-400, through selling land in excess of standard provision by 5ha or more in metropolitain and provincial areas, but with different asset realisation assumptions. This assumes asset realisatino of 80% in metropolitain araes and in provincial areas 30% for 5-10ha 40% for 10-20ha and 50% for 20+ ha (61)

5.6.2. Of this $370-390m, some funds will need to be reinvested in local schools (61)

5.6.3. Significant opposition may be faced from schools and their local community; may need to be positioned as part of a broader school regeneration or building schools for the future program (61)

5.7. Range of other opportunities exist, largest beng the School Student Transport Scheme (-$100m - not investigated in detail) (p9)

5.7.1. DET have estimated tightening of School Student Transport Scheme eligibility criteria and/or introduction of some user-pays systems may be worth up to $100m pa

5.7.2. Review of facilities standards to support innovation and better meet teaching needs

5.7.3. Range of othe rsmaller identified opportunities include discontinuation of school Certificate exam, change the mode of service delivery and revenue opportunities.

6. Non Governement Schools, opportunity may exist to shift the fundiung approach to better align with student needs (p10)

6.1. A funding model based on per capita funding, plus targeted proportuional funding linked to ataul numbers of students with equity and welfare needs could driver accountability and save -$60m (p10)

7. TAFE - a number of areas have been identified for potential savings (p`10

7.1. Holidng institute directors accountable for running a complete end-to end "business" and giving ehem more levers and incentives to deliver on this could lead to savings of $10-$20m, and $150m+ one off (p10)

7.1.1. Example - use multi-year budgeting, retention of earnings and incentives linked to the asset portfolio - within strong central pricing/purchansing approach and controls. (p10)

7.1.2. There is an opportunityfor savings if there is a continued focus on workforce productivity - $100m+ in matching other states. (p10)