Reforming or Redecorating?

Public service reform in Australia seems like a constantly moving weather front, lots of clouds, the occasional flash of lightning or thunder, but bringing no rain and little change in temperature, writes Community Council for Australia CEO David Crosbie.

As CCA finalised our submission to the Independent Review of the Australian Public-Service this week I couldn’t help but feel a sense of déjà vu. This article is a reflection on both past and current reviews of the public service and includes extracts from the latest CCA submission.

“Feudal lords had more equitable relationships with their serfs than some government departments have with the charities they work with – at least the serfs got their own little plot of land to work…”

This is a quote from a submission I wrote in the 1990s in response to an inquiry into reforming the public service. In some areas not much has changed.

Governments and their departments repeatedly talk about the need to do things better, to reform, to focus more on policy goals, on outcomes, on impact, on better measures, better processes, better management of risk, better engagement with communities, partnerships, co-design, etc, etc. Time and again reports are prepared, recommendations made, and very little action ensues.

Public service reform in Australia seems like a constantly moving weather front, lots of clouds, the occasional flash of lightning or thunder, but bringing no rain and little change in temperature. Each public-sector fiefdom seems to have its own defences that enable it to resist change.

As one very senior public servant once told me when lamenting the difficulty of changing their command and control approach to working with the NFP sector, “you have to understand David, there is a level of permafrost in our department below which policy and practice directions from above cannot effectively penetrate”.

Government provides over 30 per cent of all income to the NFP sector, but there appears to be a dog’s breakfast of approaches to funding, contracting, tendering and measuring performance of programs involving charities and not for profits. It seems each agency has its own rationale, its own set of mandatory components and priority principles for its particular performance measures and reporting requirements. Even within a given government department or agency, there are often high levels of inconsistency in approaches and processes.

From an NFP perspective, it seems each new contracting or tendering process operates largely in a vacuum with little use of past performance data to inform future contracting. All too often the fundamental elements that drive the development and implementation of effective programs and services: consultation; the competency and capacity of management teams and organisations; their relationship with their customers and their communities; their capitalisation; business plans; models of change and sustainability; level of other investors, potential competitors, etc – are simply not factored into the contracting or tendering process. In some cases it seems the prettiest proposal that mentions the desired buzz words most frequently wins the contract or tender.

If there is one consistent trend across the public service it is increasing compliance and micro-management of NFPs as a way of “improving accountability” or imposing performance measures (as highlighted by the Productivity Commission review: www.pc.gov.au/inquiries/completed/not-for-profit).

Some public servants have argued that increasing compliance is all about better managing risk. This reflects a failure to acknowledge that achievement of important government priorities and policy objectives is not a risk-free activity. Avoidance of risk is often a good way to ensure policy ineffectiveness. The lack of good risk management knowledge is compounded by a lack of understanding about the actual risks involved in the services being funded, the organisations being funded to accept those risks, and the best ways of managing those risks. More compliance does not equal less risk.

In business investment, factors such as the nature of the people involved in the management of a company, the level of expertise, competence and experience, the past track record of the management team, the past track record of the company, the existing level of capitalisation, who else has invested, the proposed business plan, cash flows, potential competitors, market share, etc are all considered in judging the risk against the likely return.

There is little evidence that good risk management frameworks are being applied in the way governments choose to invest in, fund, contract or grant money to not-for-profit organisations. It is much more likely that there will be tender processes in which public servants make decisions based on predetermined criteria relating almost exclusively to the work to be undertaken – not the capacities of the organisation that might undertake it.

What is of even more concern is that such tender processes may operate with little or no real engagement with prospective tenderers, little real risk analysis, and with no reference to history, content knowledge, performance information or real market analysis.

In most public-services, the policy goal is about achieving a change in the status of those using the services; improving education, increasing employment, providing housing, reducing illness, reducing imprisonment. Unfortunately, these policy goals are often lost in translation when it comes to implementing programs and services or developing appropriate performance measures.

How do we know what works? It all starts by setting clear policy goals, talking with individuals involved, local organisations and communities to establish meaningful goals, and then measuring success or failure against the agreed outcomes.

Understanding what works in any given community is what makes NFPs effective in their work. Whether it is in animal welfare or music education, whether it be a charity, an NFP or even a mutual or cooperative focused on a community purpose, the real expertise in achieving change within communities will usually lie outside of the public sector. Tapping into this knowledge should be a priority for all public servants. It isn’t. NFPs should be partners in achieving change. They are not.

There are examples of programs or contracted services where some in the public service have actively engaged, or co-designed, partnered, or applied more meaningful and relevant contracting and performance reporting in their work with the NFP sector. These examples are real and important. The problem is they are almost invariably exceptions, one offs, trials and pilots that do not impact the broader processes within government departments or agencies.

I believe in a strong and effective public service. I also believe that most of the people working within the public service are both capable and well-motivated. But being capable and motivated is not enough – especially if the environment in which you work is under-resourced and creates barriers to effectiveness.

As the Canadian philosopher Jonathan Saul once said, “without utility, words are just decoration”.

Let’s hope this review of the Australian Public Service is not just another decorative report to be filed on a dusty shelf next to all the previous reports on public-service reform.

About the author: David Crosbie is CEO of the Community Council for Australia. He has spent more than 20 years as CEO of significant charities including five years in his current role, four years as CEO of the Mental Health Council of Australia, seven years as CEO of the Alcohol and other Drugs Council of Australia, and seven years as CEO of Odyssey House Victoria.

David Crosbie writes exclusively for Pro Bono News on a fortnightly basis, covering issues of importance to the broader not-for-profit sector.