Machinery of government changes: could there be a better way?

By Gemma Carey & Fiona Buick

Friday September 16, 2016

Structural changes to government have become a common occurrence in Australia. They are triggered for a range of reasons: political (the will of particular Prime Minister), symbolic (to signal intent about action in a particular area), logistical (to create a more integrated response) or in response to changes to the portfolios of ministers, just to name just a few.

In our research on these so-called machinery of government changes, where structural changes are made to the bureaucracy by merging departments or moving units, we have found that Australia engages an alarming amount of structural change to the public sector.

What is often overlooked when enacting MoG changes is that they tend to be a source of stress. This was shown this week in a story run by the Canberra Times on the first MoG under the current federal government that was said to leave public servants in a state of panic. Our research into recent changes to Prime Minister and Cabinet support this claim. We found that cultural clashes and low morale can be produced by MoG changes.

While MoG changes occur for a wide range of reasons, it is often argued by governments their particular MoGs will create new efficiencies in the public sector.

However, these potential gains can be lost in what one of our research participants called “frictional costs”. By this they meant costs associated with moving people and groups around, including cultural costs, IT costs and industrial relation costs.

The UK government has begun costing MoGs in an effort to reduce their occurrence by showing their high administrative costs. In the UK, some MoGs have been costed as high as £15-30m in extra staffing and building expenditures alone. This does not account for productivity losses or pay increases that often occur due to changes to enterprise bargaining agreements. In 2010, the London School of Economics put the price of creating the Department for Work and Pensions at close to £175m.

At present, even governments with an emphasis on ‘cutting red tape’ have undertaken extreme and costly MoG changes. The Abbott government, for example, undertook one of the largest and most complicated MoGs in the history of Australian government when it moved the Indigenous Affairs function into Prime Minister and Cabinet.

A better way?

Given that governments appear to incur exorbitant financial costs, as well as significant human stress (and associated losses in productivity), machinery of government changes should be used prudently.

“This structure, while creating a heavy workload for ministers, means that the public service does not require structural changes to the bureaucracy.”

Recently, we have expanded our research into MoGs to other Westminster systems. We have found that Canada takes a much more conservative approach to re-shaping the public sector.

High ranking officials in the Canadian government explained that they use Cabinet committees as a coordination tool instead of MoGs. Committees are created around issues of central importance to the government of the day. Currently, the Canadian government has 12 committees. This structure, while creating a heavy workload for ministers, means that the public service does not require structural changes to the bureaucracy. Moreover, by taking responsibility for particular issues (usually a so-called wicked policy problem), committees become a mechanism for integration across government departments.

The other key difference that enables the Canadian government to lean less heavily on structural change is the willingness to locate more than one minister within a department. In Australia, historically each minister is responsible for a portfolio, which is reflected by the structure of a department (which supports that minister).

In contrast, Canadian departments have multiple ministers. We found that they create teams within large departments that answer to a primary minister (though they may brief more than one). In doing so, the Canadian government uses branding instead of re-structuring to put its stamp on the bureaucracy.

If similar approaches were adopted in Australia, we could significantly reduce the administrative costs of government — allowing more public money to be spent on policy delivery.

Gemma Carey also blogs about social policy at The Power to Persuade.

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5 years ago

Good piece and an important conversation.

Note that Australia also often has more than one Minister per department, with both Federal and State level having, on occasion, up to four or five Ministers, Deputy Ministers and Parliamentary Secretaries (effectively Assistant Ministers) within a specific Departmental portfolio.

Australian governments have even been known to have Ministers that cross departmental portfolios, holding specific responsibilities with multiple Departments. This is most often used for specialist or niche portfolio areas (i.e.: Art and Sport).

MOGs are indeed a regular source of tension and significant cost – which has to be absorbed by agencies rather than having extra funds provided to manage the movement of people into new buildings, switching networks or rebranding.

Besides the cultural integration challenges, the differences in payscales (a particular concern for PM&C with its Indigenous policy areas), I’ve encountered units who essentially silo themselves from integration with any department as they are moved so regularly. It’s equivalent to living in hotels, always keeping the bags packed.

Also MOGs can produce ‘IT hell’ (that’s the technical term) where areas are moved between networks, buildings and between agencies with entirely different IT stacks.

In one case I know of recently in Federal government, one significantly sized portfolio area was moved from one department to another.

Due to the complexity of the networks and IT infrastructure required by the area, by the time all the IT work to integrate them into the new Department was complete, the government had shuffled Ministers and told the Department to move the area back to the original Department.

That meant a substantial proportion of the efforts of several IT teams over the period was wasted – not by the public service, but by the insistence of the Ministers who demanded the changes, for no productivity or efficiency savings whatsoever.

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