There has been a “large reduction” in the Digital Transformation Agency’s funding and responsibilities, with a number of its key projects moved to other agencies, its chief executive Randall Brugeaud has confirmed.

Speaking at a Senate Estimates hearing on Monday evening, Mr Brugeaud said the agency would shift away from service delivery and project management and instead focus on delivering whole-of-government advice and strategy.

He also confirmed that responsibility for the myGov redevelopment and digital identity projects has been moved away from the DTA and handed to Services Australia.

This month’s federal budget revealed the Digital Transformation Agency’s (DTA) funding would drop from $425.5 million this year to $336 million in 2021-22, a cut of about $90 million. The agency’s staffing level is to be cut from 255 to 227,

This coincides with the DTA being moved from Services Australia and returned to the Department of Prime Minister & Cabinet.

At the Estimates hearing, Mr Brugeaud provided further information on this funding cut, saying that taking into account lapsing measures and other factors, the DTA is facing an actual funding cut of $39.388 million.

“It mixes our special account with our departmental appropriation. Just as with any organisation we have a series of measures that lapse and a series of measures that are created depending on proposals that are put forward,” Mr Brugeaud told the Senators.

Of the $90 million reduction in total, just under $40 million of this is from a reduction in departmental appropriation for the DTA, with $62.2 million relating to lapsed measures, $300,000 due to indexation and efficient dividends, along with $23.1 million in funding for new measures, he said.

The further $55 million reduction in funding is due to pass-through costs of the telecommunications panel, and the lapsing of the whole-of-government deal with tech giant SAP, with no new deal signed yet, he said.

Along with the funding cut, the DTA has been ordered to shift its focus away from service delivery to mainly handle strategy and policy advice, Mr Brugeaud said.

This will see responsibility for projects including the redevelopment of myGov and the launch of a digital identity scheme moved from the DTA to Services Australia, with $32.5 million in funds reallocated.

“It is a large reduction in overall budget but also a large reduction in what we’re being asked to do, and as part of our transition into PM&C there are a number of delivery functions, particularly myGov and digital identity, that will transfer out to delivery agencies,” Mr Brugeaud said.

The DTA launched the project to develop a new, more user-friendly version of myGov at the start of last year, bringing consulting giant Deloitte on board to develop a prototype and then a beta of the new platform.

But contracting responsibilities for this project were quietly transferred to Services Australia late last year, and Mr Brugeaud has now confirmed that the Department is leading this project, with the DTA to provide advice at a whole-of-government level.

“The primary focus that the DTA will have moving forward is the strategy element and the whole-of-government strategy of myGov. The delivery, architecture, and production of content that sits on the websites and apps will move to Services Australia,” he said.

The DTA was moved to Prime Minister & Cabinet in April, and Mr Brugeaud said he only found out about this when it was posted publicly in the administrative arrangement orders.

But he said he has been in ongoing discussions about the agency’s plan and was not surprised about the announcement.

“There have been discussions about the DTA’s role and mandate for a number of months and as a consequence of reviews that have been conducted the appropriate placement for the DTA has been considered and discussed,” Mr Brugeaud said.

“We were having ongoing discussions…we weren’t in any way, shape, or form blindsided by it. This reinforces our role on the whole-of-government policy and strategy table.”

There were advantages to being housed in Services Australia, Mr Brugeaud said, especially around the proximity to service delivery.

“There are pros and cons in placement. To be very close to service delivery is a very good thing. As with any agency, you make the very most of the hand you’ve been dealt and we will make the very most of the hand we’ve been dealt at PM&C,” he said.

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