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Kathryn Campbell: DHS service delivery reform a success, all things considered

June 30 marked the end of a consolidation and service delivery reform process the Department of Human Services began in 2011, and secretary Kathryn Campbell thought it was time to say a few words.

“We think [service delivery reform] is a success,” she said, sharing some reflections on the reform process on Wednesday in a keynote address to the Institute for Public Administration Australia ACT branch.

“Yes, there’s a few little things we need to continue to work on, but we think it’s set us up well to continue to deliver on welfare payments infrastructure transformation. The plan changed over time, as they always do, but we remained focused on making sure we were servicing customers every day, business as usual; transforming; and bringing the staff with us.”

Kathryn Campbell
Kathryn Campbell

The Department of Finance’s independent gateway review gave the project a “green” rating for service delivery, she told the audience, with a cheeky shout-out to the Australian National Audit Office staff in attendance. Yesterday, DHS officials appeared before the Joint Committee of Public Accounts and Audit, which is taking a detailed look at ANAO’s May report on the management of Centrelink telephone services.

Campbell acknowledged briefly that telephone wait times had been “very topical lately” and that things still needed to improve. The auditor-general’s report suggests the relevant KPI — an average waiting time of 16 minutes or less — is setting a low bar compared to other DHS telephone lines and other large Australian call centres. A simple average wait time is also not very meaningful, compared to the more complex KPIs used by other call centres.

“Once upon a time we were able to reduce wait times by … call blocking,” Campbell said, touching on another issue which came under public scrutiny following the ANAO report. “We put the ‘engaged’ signal up and no calls could get in, so you could actually serve those people quicker, but we used to get a lot of complaints about the engaged signal.

“We get that same number of complaints about wait times, so we need to work out how to best balance that and what is the best practice in the private sector.”

The Centrelink telephone service is clearly limited by its resources. Yet its efforts to encourage customers to try digital channels result in other complaints, some of which were aired in the committee by senator Pat Conroy. ANAO acknowledges the department is making a good fist of the difficult task of meeting growing community expectations and the demands of successive governments to deliver more for less. In its response to the auditor-general in May, the department explains the simple maths:

“The KPIs that the department has across all its services and channels are dictated by the funding available for the department to meet its obligations. The department has estimated that to reduce the KPI to an average speed of answer of 5 minutes, it would need an additional 1000 staff at a cost of over $100 million each and every year.”

People and culture

Campbell took the top job at DHS in March, 2011, just before the project began on July 1. She said being an outsider helped in some ways with the difficult task of bringing Centrelink and Medicare together with core departmental staff, the Child Support Agency and CRS Australia, the former provider of disability employment services.

[pullquote] “Even today I’m sure if you discussed it with some of our staff, they would say one [tribe] took over the other.” [/pullquote]

“I think importantly, I wasn’t of any of those predecessor tribes,” she said, explaining there was a lot of talk of a “takeover”, usually by Centrelink, which made up more than half of the total with 25,000 staff.

“I came from an enemy location — the Department of Finance … so I wasn’t seen to be doing any of the ‘takeover’ business. But even today I’m sure if you discussed it with some of our staff, they would say one took over the other.”

She said the slimmed down senior executive — from about 220 down to about 180 — wanted to take the best of each of the newly united groups.

“And that was very sincere from the executive, that we felt that everybody brought something quality to the table and that we should build on it. Sometimes we would find – and we worked hard on this – best practice in different former organisations … and championed that and applied it across the [new] organisation.”

While there were 40 less SES, the overall workforce reduction was ten times that number. Campbell said it was a good idea to start at the top. “It was important for us to demonstrate to staff that we weren’t just cutting APS 4s and 5s, we were cutting right throughout the organisation,” she explained.

The reforms themselves — transforming service delivery itself through digital channels and cutting costs by consolidating staff, infrastructure and services in a smaller number of physical shopfronts and office locations — had to come second to keeping services going throughout the change.

“It doesn’t matter how funky and good our applications are if we’re not opening the doors on our offices and providing services to Australians, so that remains our number one priority,” the secretary explained.

Campbell and her executive team put a lot of effort into maintaining staff support with constant communications through multiple channels, visits to offices nationwide, appointing “transformation champions” from all levels including SES, and by trying break the reform down into “bite-sized pieces”.

[pullquote] “We went to the staff and said: ‘How do you think we should behave? What do you want our culture to be?'” [/pullquote]

“When we tried to do things for a six-month period, it was too long for people to understand that that’s what would happen and so we tried to break it into smaller bites, so people saw success and outcomes.”

When it came to publishing a new statement of the consolidated department’s values and the modes of behaviour that reflect them, Campbell wanted an “organic” process based on the thoughts of all staff.

“We didn’t want to rush them,” she said. “And I in particular held back on issuing people with a new culture statement and the new behaviours, because I was concerned they would feel it was a takeover and they were having it imposed on them.

“But at the end of 2012 we had a capability review, and the lead said: ‘They really need something. They want something; they want you to issue something’. But we didn’t issue it. We went to the staff and said: ‘How do you think we should behave? What do you want our culture to be?'”

A six-month consultation period followed and 18 months after the merger began, new values were out.

“In hindsight I maybe left it a bit too long,” said Campbell, but she is happy that her plan worked.

People and culture formed a major part of the speech, but the numbers she rattled off give a sense of the epic scale of the undertaking.

Big scale, big efficiencies

Campbell said DHS was initially required to save $200 million in operations, about 5% a year, but also had to return resources it was provided during the global financial crisis to deal with an expected spike in unemployment that never came.

“Thankfully unemployment never rose to the estimates that were put out there at first, so therefore we had been over-resourced and … it was necessary to pay that money back. So we also had overstaffed at that point, and we had to reduce by about $200 million in staffing as well.”

That meant 10% had to be cut overall in 18 months, which saw 4000 staff leave, although none through forced redundancy.

“We’ve now co-located over 200 sites and rationalised our other property holdings,” said Campbell. “We used to have 38 sites in Canberra and we’re now down to about seven — you can imagine the inefficiency of running a property portfolio like that.” Further efficiencies over the four-year period of about $170 million were also demanded and received by the current and former governments.

Last financial year, DHS paid out $165 billion, took 57 million phone calls and looked into 108,000 fraud line tip-offs. 25.4 million people walked into its shopfronts, 115 million used its website, while 124 million transactions went through online accounts and 61 million through mobile apps. Its outreach trucks travelled 110,000km to visit 607 towns and serve over 13,000 customers.

The enormity of its task becomes even more apparent when one considers that as it goes through well-publicised struggles to deal with demand at times, DHS is also required to effectively find as many more potential customers as possible by running these outreach programs and advertising campaigns. With Medicare among its responsibilities, the department is literally expected to please everyone.

“We believe that we have continued to deliver positive outcomes for both customers and our staff during this period, and that it was essential to do service delivery reform so that we would continue to be able to do that,” said Campbell.

“So what’s changed? We’re now a single department with a unified workforce, fully integrated across Australia. That meant when I arrived I had four CFOs, three lawyers and lots of that duplicative function across the department, which over time, we have downsized — and focused basically on getting people to the front of house to customers so we minimised our back-of-house support.”

While acknowledging there is still “unmet demand” and other challenges to overcome, Campbell firmly believes DHS is providing better services than it was four years ago.

Turning to technology

One key way DHS can cut through its workload is to reduce the amount of time it spends explaining eligibility for the 40 payments and 38 add-ons it administers, and processing claims that will not be approved. Creating a single website through the SDR process was a good start, but Campbell says they can do a lot better.

[pullquote] “[In some places] we provide the services in a joined-up manner … there’s lots more opportunities for that and we continue to strive to do that.” [/pullquote]

“We do a lot of work on claims that are never granted,” she explained. “So people will chance their arm, try their luck. … I think there might be some ways that we could probably give them the bad news earlier, that they haven’t met one of those eligibility thresholds, but we are required to process claims that are submitted under the legislation.”

The department’s online payment finder application is only an example of it “dipping a toe in the water” which it would build on through the ongoing Welfare Payments Infrastructure Transformation, she said.

“[Citizens] should tell us their circumstances and we should be able to tell them what support we can provide to them. Our current systems don’t allow us to do that. They were very siloed; they were built in the 1980s, and they need replacing.”

WPIT “represents a new era for the department” according to Campbell, which will allow it to put the citizen at the centre of service delivery.

“It’s not just an IT system; it will be a different way of working,” she said. “There will be that focus on what the customer’s circumstances are and how we can help them, and how we build a system that’s flexible and able to be adapted to the different requirements of the government of the day.

“We’re also working on other payment systems — like the aged care system and the child support system — and they are smaller projects but very important as well, because again, a lot of our technology hasn’t been updated for a little while.”

Having served five ministers since 2011, including three in her first year, Campbell said DHS had been “fortunate” that the major parties were both generally supportive of SDR, only having to “adjust” the plans as they went to suit different priorities. WPIT, which will continue over two or three terms of government, enjoys similar broad bipartisan support.

She also supports the idea of working more closely with state, territory and local governments to provide simpler services through common digital platforms like myGov, pointing out that in some places, DHS already works alongside state agencies in combined shopfronts.

“[In some places] we provide the services in a joined-up manner … and we think there’s lots more opportunities for that and we continue to strive to do that.

“Of course different governments have different priorities at different times, and different relationships with other governments, and we have to try and go below the political level to be more pragmatic on the ground, looking for efficiencies, looking for different ways to do it. So we do it sort of quietly so it doesn’t attract too much attention and come up and prove the model first and say: ‘This has worked, can we expand it elsewhere?'”

“Particularly in the digital space, I think it would be disappointing if a customer who lived in one jurisdiction had their myGov password and their myGov login and then had to have another password and another login, and then if they were to move interstate, they then had to get a further login and further password.”

Campbell repeated Digital Transformation Office chief executive Paul Shetler’s belief that most citizens don’t care whether they’re dealing with a federal, state or local government agency. “They’re under stress, they just need that service and they don’t need to fight through those issues,” she said.

IPAA ACT will be hosted its inaugural conference and dinner on September 23-24, featuring keynote speakers including secretaries of key federal departments — Michael Thawley, John Fraser, and Renee Leon — public service commissioners — John Lloyd and Graeme Head — as well as ACT chief of service Kathy Leigh. Only limited seats remaining, contact IPAA ACT to register your interest.

Author Bio

Stephen Easton

Stephen Easton is a journalist at The Mandarin based in Canberra. He's previously reported for Canberra CityNews and worked on industry titles for The Intermedia Group.