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Landmark review of public sector offers great potential for change

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Landmark review of public sector offers great potential for change

Australia has changed profoundly in the past 40 years. Our communities are more diverse, technology has transformed the way we interact, and the role of governments in our lives has altered significantly. Despite that extent of change, it has been 40 years since Australia undertook a holistic review of the Commonwealth public service to identify how it can best meet the needs of citizens.

That is why the Independent Review of the Australian Public Service by David Thodey is so important. The Thodey Review has the potential to fundamentally alter the relationship between people and their government, and between different parts of government.

To help advance discussion on the future of the APS, this month Nous Group convened a forum in Canberra on the topic ‘What should Thodey think?’.

I was privileged to chair the discussion panel, which was composed of Professor Glyn Davis AC, the University of Melbourne Vice-Chancellor and a member of the review panel but who was speaking in a personal capacity; Alison Larkins, Nous Group Principal and a former Deputy Secretary at the Department of Health; and Robert Griew, Nous Group Principal and Canberra Office leader, and a former Associate Secretary at the Department of Education and Training.

Several themes emerged from our discussion on the challenges faced by the APS, and ways it can meet those challenges.

APS organisational instability is undermining effectiveness

Our panellists pointed out that organisational change has become frequent in the public sector, not always leading to great outcomes. The machinery of government changes that often accompany a change of government, or even occur during terms of government, can be highly disruptive to agencies and their staff, while the tenure of many people in senior ranks of central agencies is often surprisingly short.

Glyn explained that Australia’s model of altering government agencies to align with the responsibilities of ministers was unusual around the world, noting that other countries with a Westminster system have much greater stability.

Reflecting on the more than 600 submissions the Thodey Review has received, he said several considered what could be done to reduce this turbulence. "How could you raise the price of doing it in such a way that you had to think and reflect a bit more before you did it, and there were other solutions open to you?" he said. "That’s actually quite a difficult design problem, but one worth thinking about."

Alison identified dramatic changes in personnel. She pointed out that Treasury has had three secretaries in the past five years, and that no officials at Band 3 level or above have been with the department for longer than five years. Similar instability is afflicting central agencies including the Department of the Prime Minister and Cabinet, with only the Department of Finance faring a little better. "You may actually get more capacity to be agile and responsive to the needs of government if you’ve got more stability,” she said.

APS must serve today’s government, and tomorrow’s and the next

Some senior public servants may be reluctant to give frank and fearless advice because of the implications it might have for their career. With departmental secretaries serving at the pleasure of their minister, there are disincentives to delivering advice that a minister might not want to hear.

To achieve greater independence, Alison advocated for New Zealand’s State Services Commission model, in which a Commissioner, independent of the government (but appointed by it), makes decisions on key appointments in the bureaucracy. This would allow for more considered career progression into the senior ranks and ensure senior appointments are based on merit.

The mistrust between the public service and the ministers they serve is contributing to a tendency for agencies to outsource some of their policy development, Alison said. She reflected on a prior conversation with a member of the audience that one reason a department may go to a consultant for advice is that advice from consultants may have greater sway with ministers than would advice from the public service.

Robert pointed out that public servants have obligations that go beyond just the government of the day. "The notion that as a senior public servant you must be responsive to the minister of the day is compelling: it’s the foundation of our system of government," he said. "Equally compelling is the notion that you’re responsible to the long-term future, otherwise we’re ripping off our kids."

Robert recalled the advice his cohort of graduates received as a young public servant from Dr Peter Wilenski, who served as a Secretary and as Chair of the Public Service Board: ‘Remember that you serve the government of today and the government of tomorrow and the government after that.’

Robert added that good Cabinet process was vital to the smooth operations of the public service, because it meant that important issues such as long-term investments got attention rather than just urgent or politically sensitive matters.

Glyn explained that historically Australia had used statutory authorities to make bureaucratic decisions free of political interference, such as the model used to determine rail routes before Federation. While that has been undermined lately, he said many submissions to the Thodey Review had called for similar arm’s-length decision-making.

 Chronic underinvestment in technology hamstrings APS productivity

People’s expectations of the services they can access via technology are high due to innovations in the private sector, such as online banking, but the public sector is poorly equipped to deliver its services in the same way.

Alison thought it was difficult for public servants caught up in day-to-day operations to make long-term plans the future, including technology. "I think you need to ring-fence some capacity in agencies to think about what the future of service delivery, or even policy development, looks like in a digital environment," she said.

Several people cited the reluctance of government to make decisions to invest in long-term technological infrastructure projects. Indeed, when I first consulted to the public sector 20 years ago I recall frustration about underinvestment in technology, but still that issue remains, suggesting a systemic problem

Glyn said many submissions were frank about the shortage of necessary skills. "There’s no-one to do this," he said. "There isn’t a depth in the CIO community from which you can draw large numbers of leaders who can design and implement a system. Where are these people coming from? And if you don’t have them, and you don’t have the investment in the system, how do you get the digital underpinning that’s going to be necessary?"

Fewer management layers would create greater speed and accountability

When asked for his bold ideas on reforming the public service, Robert was emphatic. "I think it’s a no-brainer to knock out a couple of levels of management," he said. Drawing on his experience in Commonwealth and state agencies, he pointed out that the Federal Government has several more layers of management than its counterparts. He also advocated a significant investment in developing individual capability in the occupants of richer positions that would result.

He noted that an official in the Northern Territory Health Department may have responsibility for resource allocation and management of key services across a substantial region, but a similarly-paid official in Canberra might not even have authority to sign a letter.

Alison added that some people within the bureaucracy were no longer suited to their roles or their organisation. She advocated for the APS to actively invest in reskilling its staff – including articulating clear pathways to different types of work, either within their current organisation, elsewhere in the APS, or in the broader economy. "There are people who are no longer fit for purpose," she said.

She also explained that the APS was struggling to respond effectively to current challenges, despite there being lots of good people trying to do that. She said some departmental secretaries felt constrained by their work environment, including the need to tightly manage risk through centralised rules.

Service delivery must be seen as equal in importance to policy

While the Federal Government is traditionally the domain of policy development, increasingly it is being called on to deliver services to citizens. These skills are quite different and are sometimes lacking.

Glyn cited the example of the National Disability Insurance Scheme as involving a level of complexity not seen elsewhere in the public sector. "Not surprisingly, it’s proving overwhelming and difficult and generating a lot of angst," he said. "How are we going to work out how to do it so we provide all the various payoffs we’re looking for here – for the individual at the centre of it, but also in cost terms and efficiency terms?"

Robert pointed out that the federal bureaucracy undervalued service delivery as a skill set, so it was essential to find ways to develop that capability and to value the knowledge that comes with experience in service delivery roles.

Many challenges lie ahead

After nearly an hour of discussion among the panel, it was great to hear from our guests: Michael Manthorpe, the Commonwealth Ombudsman, explained that earlier this year his office received a record number of complaints about government services; Ian Anderson, a deputy secretary at the Department of the Prime Minister and Cabinet, discussed the evidence of real robustness in Australian institutions, including the APS; and David Kalisch, the head of the Australian Bureau of Statistics, reminded us of the critical importance of the infrastructure and services provided by regulatory bodies.

Our lively panel made clear that there are many barriers to achieving an ideal bureaucracy, but also that there is tremendous appetite for change within the APS. As many submissions to the Thodey Review have revealed, removing the constraints and empowering people to act can have tremendous benefits for the APS and those who rely on it. Which means all of us.