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‘Urgent’: former secretaries assess public service capability

If the public service were a patient “it would be in palliative care”, says Terry Moran. Here’s what other secretaries have said about Australia’s loss of bureaucratic capacity.

An upcoming parliamentary inquiry into contracting and consultants in the Australian Public Service will consider whether these practices have led to a degraded bureaucracy.

Many current and former departmental secretaries seem to think so, often using their valedictory speeches to highlight the loss of capability in the public sector.

It’s a subject that keeps coming up, so we’ve compiled a series of excerpts from senior bureaucrats on the subject.

The parliamentary Joint Committee of Public Accounts and Audit will be taking submissions until 16 February on the use of contracts and consultants in the public sector.

Terry Moran

Former secretary of the Department of the Prime Minister and Cabinet, and the Victorian Department of Premier and Cabinet

IPAA Victoria Fellows Oration, 2017

The Australian Public Service is less than half of all Commonwealth public sector employment and it remains excellent in many areas — national security, central agencies. Outside the public service many of the agencies, such as the macroeconomic regulators, are rightly considered as amongst the best of type in the world.

The reality, however, is that the APS is failing in areas of social policy because it has been stripped of specialist capability and service delivery experience. If it were a patient it would be in palliative care. Successive governments haven’t nurtured the APS: they’ve gutted it. Australia needs a new way, but the best ideas won’t rise to the top without the stewardship and advice of the public sector.

They won’t rise to the top by outsourcing advice to consultants, either. While there is a critical strategic role for consultants, at a lower level they are just being overused: often engaged at the wrong organisational level and for work the public sector is better placed to deliver. It’s like writing to Santa Claus without knowing what you want, how old you are, or whether you’ve been (or want to be) naughty or nice. Reinvesting in policy memory and capability, encouraging frank advice, and improving service delivery know-how is the way forward if the APS is to think for itself and be the crucible for reform that it can and must be for Australia to thrive.

“If it were a patient it would be in palliative care.”

Mindhive Brisbane, 2015

Fixing that problem is important but not enough on its own — because our sector is also increasingly lacking some core capabilities.

In the last 30 years, employment in the public sector has gone from roughly 25% to 16% of total employment in the economy — from one in four to one in six.

The fact that in general the level and quality of public services is now vastly superior to what it was in the mid-1980s is testimony [that our sector has] become more productive.

But a less recognised outcome has been the loss of some important capabilities and skills in [the public sector].

Our loss of expertise in areas like engineering and construction has become clear — particularly as state and Commonwealth governments look to develop new forms of infrastructure delivery.

There have also been major developments in approaches to management in large organisations that most public sector managers are probably unaware of.

We’ve also seen a loss of ability in broad strategic planning — and its replacement with the economist’s world view that the answer to big policy challenges is the development of a well-structured market and putting a price on everything.

Unless we change that rather blinkered mindset then we are going to struggle with the complexity of public policy challenges facing us — and potentially entrench inequality in our community.

Peter Varghese

Former secretary of the Department of Foreign Affairs

Parting Reflections, 2016

Deep policy thinking is an area where our system, at both the political and the public service levels, has struggled over the last decade.

It is becoming harder for the political leadership to think deeply about new policy approaches. This means that governments come to power with headline policy positions, often without the backup of detailed policy analysis. Once in government they look to the public service to fill in the gaps.

The public service meanwhile has itself lost depth when it comes to policy thinking. And so we have had the two systems, political and bureaucratic, talking past each other and each nursing a quiet disappointment with the other.

“Recovering the capacity for deep policy analysis is urgent.”

In relation to the public service other factors have also been in play. Over the last decade we have seen a significant shift towards implementation and service delivery at the cost of policy work and also a narrower bandwidth when it comes to the time senior public servants have to wrestle with complex policy issues. In other words, the more reactive political environment has also rejigged the focus of the public service, because ultimately the focus of the public service reflects the focus of the government.

However we got here we must find a way out. We must rebuild, at both the political and the public service levels, a capacity for deep policy thinking because without it we will not be able to chart our way through the many economic and other challenges we face as a nation.

And nor can we delegate this work to think tanks, useful though their contribution can be. Good policy making is an iterative process. It involves testing assumptions and teasing out options. It is best done through a close partnership between ministers and their public servants.

I suspect regaining policy depth might prove to be easier to do in the public service than in politics. I say this because I think the public service leadership today recognises the challenge and that is the first step to recovery. I do not know that our political culture has reached the same point of acceptance.

Recovering the capacity for deep policy analysis is urgent because we are at an inflection point in our history. It is not dissimilar to the period after the second world war when the nation had to set out in a new direction and when the political and public service leaderships worked so well together to chart that direction. Or the period from the early eighties when we set out to internationalise the Australian economy; or the nineties when tax and industrial relations policies had to be redefined.

David Borthwick

Former secretary of the Department of Environment, Water, Heritage and the Arts

Valedictory speech, 2009

The quality of the Australian Public Service is the foundation of good government. It must have the capacity — the skilled workforce and the resources — to undertake the strategic thinking which underpins longer-term reforms. Institutions such as the Productivity Commission, which have a long-term orientation and some degree of independence from government, are vitally important. But they are not enough. The capacity for longer-term thinking needs to exist across the service, in each agency with policy responsibilities.

“The immediate pressures of program and service delivery take priority over long-term policy development.”

I think it is becoming increasingly difficult for the Australian Public Service to find room to do this. It has sometimes been said that the Australian Public Service is strong on policy but weaker on program implementation. Certainly officers with policy skills have tended to move up the ranks more rapidly. My concern is that the Australian Public Service is being tasked to do so much that the balance is tipping the other way. The immediate pressures of program and service delivery take priority over long-term policy development.

This is one of the great difficulties of being an agency head: we want to provide a longer-term perspective to government but our agencies are so flat out and stretched that we have scant capacity to invest in serious thinking. My concern is that the less we engage in thinking about longer-term policy issues, the less capable we become of engaging in it when it is required. I would hate to see the Australian Public Service become de-skilled to the point that it cannot participate in a meaningful way in setting out the nation’s long-term agenda. Rattigan would have been dismayed.

Peter Shergold

Former secretary of the Department of the Prime Minister and Cabinet

The Conversation, 2012

(Referring to James Button’s memoir Speechless)

Far more worrying is that during Button’s time in PM&C, ever greater use was made of outside consultants to undertake policy work. As Button saw, their work could be mediocre. And it eroded morale. He spoke to many senior public servants who, even though they welcomed contestability, found their confidence sapped by a sense that, in hiring consultants, those in authority lacked faith in their ability. My own experience was that careful, well-argued but responsive policy advice is best provided by experienced public servants who fully appreciate the complexity and ambiguity of the political environment in which they operate.

“Whilst there can be a strong temptation to outsource ‘process’-oriented tasks, in practice this runs the risk of de-skilling staff.”

Learning From Failure: why large government policy initiatives have gone so badly wrong in the past and how the chances of success in the future can be improved, APSC review of government processes, 2015

Whilst there can be a strong temptation to outsource ‘process’-oriented tasks, in practice this runs the risk of de-skilling staff and failing to harness essential practical and subject-matter knowledge. External consultants have their place. Used properly they can contribute good value. But they should not supplant fundamental departmental know-how nor be a means of abrogating responsibility. Indeed, the HIP should serve as a cautionary tale against undue reliance on external consultants for functions that should be core to departments’ program management accountability.

Martin Parkinson

Secretary of the Department of the Prime Minister and Cabinet

Quoted by The Canberra Times, 19 December 2017

I don’t think headcount is the right measure … The question is really: does the APS have the capability set it needs to deliver for the challenges Australia faces in the next quarter century?

“If I have a concern, it’s about some parts of the service relying on consultants to do what should be their core business.”

Where there’s a situation where I just need a fresh pair of eyes to have a look at this and just do a robustness test, just check that we’re on track, I think that’s totally legitimate, [a] traditional role of consultants.

If I have a concern, it’s about some parts of the service relying on consultants to do what should be their core business because ultimately we deal in ideas, and that can be a policy idea, it can be the delivery of that through a program … or it can be the regulation of it through oversight arrangements.

Quoted by Laura Tingle in her Quarterly Essay Political Amnesia: how we forgot how to govern, 2015

The blurring of boundaries between the public servant and the political adviser, and the relentless focus on message over substance, results in a diminution of the “space” in which the independent adviser can operate. Becoming an effective policy adviser also requires “learning by doing” under the guidance of experienced hands — an apprenticeship, if you will. Today, in some institutions, smart people look around at their colleagues and find there is no one to talk to, to learn from, who has experience in delivering real reform. The combination of these two things is a decline in the quality of advice and an erosion of capability, to the detriment of good government.

Don Russell

Chief executive of the South Australia Department of Premier and Cabinet, former adviser to Paul Keating

Department of the Senate Occasional Lecture Series, 2002

“There are growing doubts about the ability of departments and staff to properly assess and evaluate outsourced programs now that in-house expertise has gone.”

The characteristics of the public service are determined by the prime minister of the day. It will be hard to rebuild the public service, but with the right person in charge of the Department of the Prime Minister and Cabinet, it can be done. We should not return to the years of John Stone or Fred Wheeler but we do need to attract talented people of standing who wish to work in a cooperative and mutually satisfying way with government.

This will require positive support for secretaries and their careers.

Much government activity is now outsourced and there are growing doubts about the ability of departments and staff to properly assess and evaluate outsourced programs now that in-house expertise has gone. The public service needs to have a capacity to provide expert advice on the full range of activities for which their ministers are responsible.

Ken Henry

Former secretary of the Commonwealth Treasury

Quoted by Laura Tingle in her Quarterly Essay Political Amnesia: how we forgot how to govern, 2015

I think many departments have lost the capacity to develop policy; but not just that, they have lost their memory. I seriously doubt there is any serious policy development going on in most government departments.

Author Bio

David Donaldson

David Donaldson is a journalist at The Mandarin based in Melbourne.