❓ Mr. Redman questions the Water Minister about the financial implications of insourcing the Perth Region Alliance (PRA), particularly regarding employee conditions and cost savings. The Minister assures that cost savings are still expected despite improved employee benefits.
AnsweredQoN 5872Legislative Assembly
QuestionView source ↗
(1) I refer to recent Freedom of Information (FOI) released by Water Corporation including a redacted copy of “PRA Business Case” arguing the value of “insourcing the Perth Region Alliance”, and ask? (2) Given Page 25 (7.1.2) of this document referring to mitigation of industrial action risk, suggests the conditions of Water Corporation employees is better than current PRA employees, can the Minister confirm the extra ongoing costs to Water Corporation of the insourcing model, assuming all existing staff come across to Water Corporation? (3) Can the Minister outline the differences in the industrial relations profiles referenced on page 20 of the business case? (4) If indeed there are higher operating costs to Water Corporation as a product of existing PRA staff coming onto Water Corporation's EA’s, has this cost been accounted in the $2-3m savings expected from the in-sourcing model? (5) If indeed as mentioned on page 20 of the business case that savings of $2-3m per annum come from contractor margins, how is it, that an expected higher cost of employees from better EA conditions will not impact the suggested $2-3m of savings to government? (6) Will the Minister table a copy of the “Alliance Agreement” referenced on page 10 of the business case? (7) Can the Minister confirm the status of the approximate 100 contracts of which the PRA is party to, supporting the delivery of services under the Alliance, as the Water Corporation progresses to an in-sourced model? (8) Can the Minister confirm the quantum of savings and benefits delivered to Water Corporation as referenced on page 4 of the business case (Section 1.2)?
AnswerView source ↗
Answered
19 March 2020
Responded by
Minister for Water
Response time
12 days
(1) Not applicable. Preamble to question.
(2) Water Corporation has conducted a thorough review of the PRA Enterprise Agreements which has enabled the effective mapping of PRA employees over to a like for like position within the Water Corporation’s structure. This will ensure pay parity between Water Corporation employees and the PRA employees transitioning across to the Water Corporation. Additional favourable employee benefits include early access to Long Service Leave, more generous Long Service Leave terms, and the opportunity for employees to increase their Super Contributions. Any increased labour costs are fully accounted for in the estimated net ongoing saving to the Water Corporation of $2-3m a year.
(3) The principal difference is that PRA operates with multiple Enterprise Agreements whereas Water Corporation operates with a single Enterprise Agreement.
(4) Yes. Please refer to (2)
(5) The forecast net cost benefit of $2-3m is principally achieved through the avoidance of margin payments to Programmed Facilities Management. Any increase in costs is accounted for in this net position.
(6) The Alliance Agreement is a commercial contract arrangement between the Water Corporation and Programmed Facilities Management.
(7) The Water Corporation will arrange new contracts with any subcontractors currently engaged by PRA that are needed to support ongoing delivery of services. Existing minor capital works contracts that have been established by PRA, which are forecast to run beyond the 9 March 2020 transition date, will be novated to the Water Corporation.
(8) PRA realised savings in the order of 2% a year through the delivery of the services set out in the Alliance Agreement, consistent with the 2% efficiency dividend delivered by the Water Corporationas a whole.
(2) Water Corporation has conducted a thorough review of the PRA Enterprise Agreements which has enabled the effective mapping of PRA employees over to a like for like position within the Water Corporation’s structure. This will ensure pay parity between Water Corporation employees and the PRA employees transitioning across to the Water Corporation. Additional favourable employee benefits include early access to Long Service Leave, more generous Long Service Leave terms, and the opportunity for employees to increase their Super Contributions. Any increased labour costs are fully accounted for in the estimated net ongoing saving to the Water Corporation of $2-3m a year.
(3) The principal difference is that PRA operates with multiple Enterprise Agreements whereas Water Corporation operates with a single Enterprise Agreement.
(4) Yes. Please refer to (2)
(5) The forecast net cost benefit of $2-3m is principally achieved through the avoidance of margin payments to Programmed Facilities Management. Any increase in costs is accounted for in this net position.
(6) The Alliance Agreement is a commercial contract arrangement between the Water Corporation and Programmed Facilities Management.
(7) The Water Corporation will arrange new contracts with any subcontractors currently engaged by PRA that are needed to support ongoing delivery of services. Existing minor capital works contracts that have been established by PRA, which are forecast to run beyond the 9 March 2020 transition date, will be novated to the Water Corporation.
(8) PRA realised savings in the order of 2% a year through the delivery of the services set out in the Alliance Agreement, consistent with the 2% efficiency dividend delivered by the Water Corporationas a whole.
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