A “digital workspace” upgrade for foreign affairs officials is set to blow its budget by almost $20 million, while also taking more than twice as long as initially forecast.
The cost blow-out at the Ministry of Foreign Affairs and Trade is buried in a list of the ministry’s IT projects provided to Parliament’s foreign affairs, defence and trade committee as part of the annual review process.
According to the ministry’s answers to annual review questions, the digital workspace transformation programme had an initial estimated budget of $13.4m and was due to be completed two years after work began in July 2021.
However, the project now has an “estimated total cost at completion” of $33m, while its new estimated completion date is by the end of June 2026 – three years later than expected.
In a separate, proactively released Official Information Act response about the project, the ministry said it had already paid out $10.1m for the project as of September 2023, with $9.2m of that going towards contractors.
The programme’s costs included the rollout of Microsoft cloud computing services, which would enable “increased security, information sharing, improved productivity, and enhanced external interoperability”.
In a statement, a ministry spokesperson said the project’s initial estimated budget was based on the original business case, with the new $33m figure “aligned with a revised business case and a change of scope with related projects being incorporated”.
“Additionally, as we progressed with the programme, we became more aware of the complexities of the legacy systems Mfat has and the cost required to address these. Mfat systems have to support 60 posts across 53 countries with a range of technical, physical and cyber security considerations.”
The spokesperson said the change of scope was also behind the extended completion date, and was subject to funding yet to be approved for the 2024/25 financial year and beyond.
“Further programme funding will be considered and allocated in conjunction with other organisational priorities.”
Securing additional funding from the Government is likely to be a tall task, given Finance Minister Nicola Willis’ instruction for public service departments to cut costs by up to 7.5 percent to help fund the coalition’s spending commitments.
Last month, Foreign Affairs Minister Winston Peters told Newsroom that New Zealand’s diplomatic footprint needed to increase, rather than decrease, if the country was to build influence abroad and grow its exports.
“We’ve got no difficulty, I believe, in provisioning the minister with areas of relocations of savings – that’s a fact and then we’re working on it really hard now,” Peters said.
“But to look at it and say, ‘There must be waste, there must be waste’, when you have underspent all this time, means that we have some way to go to persuade people of the rightness of our cause.”
Newsroom approached Peters’ office for comment, but he was unable to provide a response in time for publication.
