Reinventing government starts at the local level

By Sarah Novak

April 1, 2019

This is part of a series of articles on the future of government. Terry Moran discusses the reinvention of government with the Centre for Public Impact, a BCG Foundation.

Terry Moran is a man of firm convictions and has been an outspoken critic of managerialist approaches to policy-making — particularly top-down (or centre-out) outsourced models — but should we reject them completely? He expounds his views in conversation with the Centre for Public Impact’s Sarah Novak.

Says Terry Moran:

“In the 1980s and 1990s in Australia, managerialism was used as basis for defining outputs and then giving providers of services much greater independence to deliver under funding agreements,” said Moran.

“But if you don’t have an ideological understanding of what the public sector should do, then by outsourcing the delivery of services you may as well say, ‘The citizens who need these services can find their way to market. We’ll just put a price on this service and either give the money to a provider or directly to the client themselves, as is the case with disability payments.’

“I’m not against managerialism, or even outsourcing, per se, but I’ve seen too much incompetently executed outsourcing, particularly around vocational education and training, employment services and early childhood development. Where I’ve seen it work well has been when it’s been put out to organisations, such as faith-based non-profits, where the ethos is very different from the private sector.”

Managerialism focuses on outputs but it’s outcomes that make the difference

Terry argues performance measures need to be outcome-focused.

“Most performance measures and targets that bear down on service delivery organisations relate to outputs, but they don’t have a true effect on outcomes, which is where the policy has a sustained effect on people’s lives.

“It’s often the case that the people who devise the system over-engineer it terribly and simply have too many performance indicators, I’m thinking about what Michael Barber did to the British school system.

“You can’t expect a manager to deliver on performance measures if they can’t hold them in mind. And for most people five or six is the limit, whereas a single outcome is what the policy could and should aim to achieve and represents the goal towards which we should all be working.”

“Of course you can add more performance measures if you’ve got some sort of regular reporting system, but when you get into schools, for example, and start to measure outputs they quickly lose their impact because you try to fix one thing and your attention is drawn away from some others in the process.

“Whenever one output improves, others tend to decline. Therefore, you’ve got to be really strategic and boil it down to the essential, key measures. Even that doesn’t solve the outcomes problem in most cases, largely because culture and values contribute to getting the outcomes that you want, and these can easily remain untouched even as you meet output-focused performance targets.”

Values, culture and empathy are critical to rebuilding trust in government

Values and culture are central to the debate around outsourcing and to public sector provision generally, in Moran’s view.

“They are as important, if not more important, in this than in any other area of Australian society. Most local government authorities and the faith-based organisations understand that and yet they are most often the ones that haven’t successfully been engaged by the Commonwealth.”

To preserve public sector values, he argues, outsourcing must go to entities such as these that understand the role of culture and values, and he thinks empathy is another critical element of effective service delivery in government.

“Citizen-centric delivery cannot work unless the people who are delivering services have some empathy for the citizen who’s receiving them and think through what it is that will solve a problem. A whole-person approach is usually what’s required, and that tends to mean a combination of things needs to be put in place. It’s more complicated to do and much harder to tick off on your board as ‘completed’.”

There has undoubtedly been a dramatic decline in trust in government over recent years, with the 2018 Edelman Trust Barometer indicating only 35% of Australians trust government institutions. This has been one of the forces helping to drive the focus away from centralisation and towards localism, believes Terry.

“People trust those who are near where they live or work and whom they encounter in their daily lives, and they tend to really dislike those anonymous people in the system behind the familiar faces.

“The professionalisation of politics in Australia and in particular the way that economics has taken on an ideological perspective and become a fixed reference point for the way the national government approaches problems in our society has also contributed to this sense of distance from the people and a feeling that the political class has lost its way.”

A new wave of policy debate is needed … driven by the ideals of localism

This lack of trust in both government institutions and politics must, in Terry’s view, inspire a conversation that challenges traditional approaches to policy and also the traditional view of the capabilities and ideologies of the public service.

“We need to have another major national debate about another set of ideas which will drive a third wave of policy into the future. The way reform works in Australia is that you start with something that’s different, radically different, and show that it works, and then that gives credibility to similar ideas.”

Terry believes that radical reform will come about only through a localist, place-based approach, and he views local government as potentially the epicentre of change – offering a democratic route to reinventing life at the community level. He also spoke about a significant lack of capability and engagement between federal and state governments and local governments.

“Local government itself will have to be reinvented. State and federal governments would say that local government is hopeless and can’t be trusted. All that means is that they have got to clean up their act if they want to be accepted and respected. Cleaning up their act means being willing to take responsibility for delivering services under long-term funding contracts with the Commonwealth and the states and then protecting senior officials from the vagaries of local government politics by giving them more of the Westminster tradition as the basis of their engagement and operation.

“State government should ideally think of local government as the national government in India thinks of state-level government. That is, it should reach down and work in a hands-on way with the executive leadership of local government, both moving them around but also protecting them.”

Terry cites the City of Melbourne as a success story of an empowered local government supported by state government.

“The state government set up a strategy for central Melbourne under a planning minister, who was a distinguished architect, and the head of his department, who is a distinguished designer/builder in the private sector. Their vision not only won bi-partisan support but also the support of local government. This was an example of good co-operation between the state and a local government authority.”

Could increasingly localised government really be an accepted and logical next step for Australia? Terry thinks so.

“Show that the emperor in Canberra has no clothes and that we need something different. For that matter, show that often the state government has no clothes. All you need is for one other level of government to appear incompetent in order to build a case to try something quite radically different.

“We need a debate about localism in Australia. Local government is, in my view, the easiest available partner for local service delivery. But we’ll need to see a few successes before that model will be taken seriously”.

This article has also been published on the Centre of Public Impact website.

Terry Moran was interviewed by the Centre for Public Impact. If you have any comments or would like to get in touch to share your views, please contact


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