Eccles: $3m Victorian MoG change efficiency ‘remarkable’

By David Donaldson

Friday January 15, 2016

Victoria’s post-election machinery of government changes at the beginning of 2014 cost around $3 million but implementation was “remarkable in its efficiency and its effectiveness”, says the state’s top public servant, Chris Eccles.

After its election in November 2014, the Victorian Andrews government set about cutting the number of departments from nine to seven through a reshaping of functions, leading to speculation about the impact of “superdepartments” on policy processes.

Total direct costs to the state of the machinery of government changes until May 31, 2015 were $3,065,705, according to figures published in an interim report by the parliamentary committee inquiring into the reforms.

The final reporting date for the inquiry is May 1, allowing any negative findings to cast a shadow over the Andrews government’s second budget.

Keeping it amicable

Evidence given by Victorian departmental secretaries about the reorganisation was positive. Secretary of the Department of Premier and Cabinet Chris Eccles attributed the effectiveness of the process to collaboration and a focus on timeliness:

“It is my considered view that the implementation process of the MoG changes following the November 2014 election was effective and efficient, and I would even go so far as to say, having been involved in machinery of government changes in other places at other times, that it was remarkable in its efficiency and its effectiveness.

“They were announced on December 4, 2014 and the departments had their structures in place by the time they commenced on January 1. I think the effectiveness of the process can largely be attributed to the collaboration of departments and a collective emphasis on the importance of meeting some very tight time lines.”

DPC convened a whole-of-government interdepartmental committee to manage the implementation processes.

“We also worked bilaterally to determine what each department needed with respect to resourcing and budgets to successfully transfer each function. Significantly, all matters were resolved without escalation beyond the IDC, so there is a process for … appeal to other parts of government in the event of there being disagreement,” he said. Although amicability meant that process wasn’t required.

Of the approximately $3 million, the Department of Economic Development, Jobs, Transport and Resources, which brings together a large range of portfolios contributing to the state’s economic development under the direction of Richard Bolt, had the highest MoG costs, spending around $1.3 million. Changes cost the Department of Environment, Land, Water and Planning $771,000 and Health and Human Services $618,000.

Premier and Cabinet spent $341,000 on changes, the biggest of which was the formation of a portfolio answerable to Special Minister of State Gavin Jennings, which brings together public sector reform, public sector ICT and the integrity and watchdog agencies. Minimal alterations at the Department of Education and Training meant only around $10,000 was spent, mostly on stationery changes — a relatively low figure thanks to the continuing spread of digital.

Beyond shared services to common practice

Then-secretary of the Department of Health and Human Services Pradeep Philip said he thought “the creation of a new department has gone incredibly well”.

Discussing how significant changes should be made within departments, Philip said he prefers to take it slow: “There are things that I would like to see done differently, but all done in stages and all through consulting with staff. There are different schools of thought about whether you make big bang changes or you make them in stages. I subscribe to the latter. That is the way I operated in the previous Department of Health and will continue to do as long as I stay in this role,” he explained.

The former Health and Human Services departments, which were amalgamated between 1996 and 2009, already shared a range of services before the 2014 change, including payroll, financial systems, document management and administrative and executive services. This has minimised the financial savings to be made from the merger, though Philip argues it’s about more than just sharing services, telling the committee, “the use of systems is one thing, and starting to use common practice is another. I think our approach to budget, our approach to briefings and all those things can start to generate some benefits for us by being on a more consistent basis, and they use a lot of these backup office functions.”

Bolt gave a couple of examples where the amalgamation of business sections was improving the functioning of government, and how that differs to collaboration between departments:

“What we are finding, for example, is that by having the visitor economy, the creative sector and regional development in one portfolio, undertaking parallel reviews of all of those sectors gives us insights into the kinds of things government may choose to do that would benefit all of those objectives, as one example. Having a look at agriculture, having agriculture, regional development and transport in the one department makes — I think as you were indicating — it possible to have people collaborating on getting produce to market in the most efficient way, and work has been done on transport plans that would achieve that objective.

“So there are two examples, and one could go on. That is not to say that some of those benefits could not be achieved working across departments, and it is important to bring forms of collaboration from other departments into our work — so, for example, on land use planning and the implementation of the Melbourne Metro project — but certainly there is a convenience and an efficiency in having the functions in the same department that relate to each other, and there are quite a few of those in this new collection.”

No more ‘Napoleonic shouting from the rooftops’

Eccles also elaborated on his conception of the Department of Premier and Cabinet as an agency of “unifying intelligence”, rather than a central agency, outlined in a speech at Public Sector Week.

Asked by legislative council member Gordon Richard-Phillips whether the Premier’s reference to certain portfolios being “elevated” to DPC was at odds with that idea, Eccles responded that he hoped his employees would distinguish themselves through “value creation and understated excellence rather than some sort of Napoleonic shouting from the rooftops and demanding through terror”:

“It is about how you do your business, not what business you do. To me the term central agency has, as I articulated in the speech, almost a bygone industrial concept of the bureaucracy where you exert your authority by the false authority that comes with being the first minister’s department by fiat rather than by influence, persuasion and intellectual endeavour.

“My mission for the department is not to ever rely upon that false authority but to define itself by the value it creates. Therefore it was more of a rhetorical device in describing DPC not so much as a central agency but as an agency of unifying intelligence. I would submit that it is not inconsistent with the Premier’s expectations of our pre-eminence for me to characterise us as a contemporary agency of unifying intelligence rather than a central agency.”

This, he continued, is a view he is “absolutely” articulating to the Victorian Secretaries Board and across the VPS.

Eccles also praised the agreement made between Bolt and Department of Environment, Land, Water and Planning secretary Adam Fennessy to manage the transferal in a manner that would avoid any disruption to fire services. Fennessy explained that it was important to have an agreement in place as the changes were taking place over summer:

“Through the transition period Richard Bolt and I, as the two responsible secretaries, were very clear about the fire risk, because the machinery of government process was taking place over the summer season. The first agreement we signed between the departments, just to be very clear and transparent, was a memorandum of understanding about emergency management transition over the summer period.

“We did not want anything to be distracting the effort over summer, and that made sure that the larger base of staff we have across the regions who have expertise in emergency management were all ready and able and none of the systems to respond to fire were impacted by machinery of government.”

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