Date: August 07 2012
When the Ahead of the Game blueprint for public service reform was published in March 2010, the federal government provided money for its implementation.
Unfortunately, most of the funds were soon withdrawn, presumably to serve some higher purpose. It's not the first time a government got stingy about spending to improve public administration. Indeed, such false economies are politically popular in good and bad times. But it's an ill wind, as the savings now being exacted by the Gillard government will be good practice for the public service if it gets trapped in Tony Abbott's ''python squeeze'', an experience that could make the carbon tax feel like being bashed with a marshmallow.
Anyway, not all of the blueprint has been lost. Its recommendations about ''agency capability reviews'' have been picked up. After a trial in three departments, the government decided to go live. This year, reviews will be undertaken in the departments of the Prime Minister and Cabinet, Immigration, Finance, Agriculture, Fisheries and Forestry, Regional Australia, etc, and Infrastructure and Transport. It is intended that all departments and several large statutory authorities will be covered over the next couple of years.
The notion of ''capability reviews'' was not invented by the blueprint's authors. It was adapted from a program begun in the British civil service in 2005. The program received a favourable but qualified review from Britain's National Audit Office in 2009. It concluded that ''departments have made improvements since their capability reviews'' but that ''it is not yet possible to say whether [they] represent good value for money because the information gathered does not prove a clear link between departments' actions and improved performance''. The audit office made a number of recommendations for adjustments to the British program and it rolls on.
So in further homage to Westminster traditions, the British scheme has been imported into the Australian Public Service with some minor but important variations. For example, in the British scheme, the vexed matter of ''leadership'' is assessed in part on the basis of its ability to ''ignite passion, pace and drive''. That may be appropriate for Englishmen but, for Australians, it could lead to all sorts of gratuitous excesses. Therefore, the Austral version of this inflammatory criterion has been changed to ''motivate people''. Sensible public servants in this country should remain as calm and level-headed as possible, leaving passionate urges to sopranos, amateur wine connoisseurs and soccer fans.
So what are our capability reviews supposed to do and how are they to be conducted?
They are not audits of past performance but assessments of an agency's capacity to do its job. They do not consider the adequacy of agency resourcing, important as that is to capability, as that would drag in the Finance Department, duplicate the budget bidding process and, to some extent, distract from a balanced consideration of other relevant factors.
Three aspects of capability are to be examined:
■ Leadership: in rough terms, objective setting and personnel management.
■ Strategy: covering policy development and the means by which it can be implemented, including cooperation with other departments and outside organisations.
■ Delivery: including coordination with other organisations, dealing with recipients of government programs, ensuring proper governance and risk management, and reviewing results.
By way of a pleasant change from all-too-common practice, each review is conducted by three people with some experience and knowledge of the public sector, often a superannuated secretary, a senior private sector manager and a person from the immense pool of current deputy secretaries but not from the agency under review. People of the calibre of former Environment Department secretary Roger Beale and former Centrelink chief executive Jeff Whalan are rumoured to have been engaged as reviewers. Each review group is aided by staff from the Public Service Commission; other costs are born by the agency under notice.
The reviews consider agency documents (business plans, financial and personnel management documents, the results of other reviews, audit office performance audits and the like) and interview ministers (where they are willing), agency staff and ''external stakeholders''. In the course of each review, those undertaking it have weekly meetings with the agency head, who, after about nine weeks, is given a draft report on which to comment. When the report is finalised, the agency prepares an ''action plan'', which is agreed with the public service commissioner, who is provided with periodic reports on what's being done about them.
There's much to be said for this methodology, especially the close interaction between the review group and agency management. The commissioner, Steve Sedgwick, says: ''It's the level of engagement between the reviewers and the secretary of the agency that really counts; there should be no surprises at the end of the review and a shared view of what needs to be addressed.''
It's not exactly clear just how closely ministers are allowing themselves to be engaged in these reviews. However, as the chief executives of their departments, it is crucial that they be in them up to their necks, providing views about their agencies' capabilities and how they might be advanced, helping to determine what's to be done as a consequence and being part of ensuring that promises are kept. This is not only sound managerially but it's in ministers' self-interest. If things go wrong in departments, they will invariably cop much of the flak that can be extremely damaging and made only worse by Pontius Pilate attempts to buck-pass the odium onto secretaries and their staff.
On another angle, in time it will be important for the results achieved by agencies to be related to the capability reviews. As Britain's National Audit Office report on reviews said: ''It is unusual to examine an organisation's leadership, strategy and processes in isolation from its operational results. The lack of a link between capability review scores and reported performance will appear increasingly anomalous and could undermine the credibility of both. Departments should determine how and after what time lag they expect action taken in response to capability reviews to lead to improved performance.'' No doubt this is now being taking into account in the local versions.
While there are reasons for optimism, it's a bit early to assess the effects of the capability reviews in the public service. Sedgwick says the three trials last year went ''very well'' but that it's ''too early yet to be making sweeping statements about APS-wide capabilities. But some areas I'm watching relate to policy skills, performance management, prioritising resources and planning to meet future workforce requirements.''
PM&C secretary Ian Watt has said the review in his department was ''a very useful exercise'' and that they are ''worth doing''.
The March 2010 blueprint said: ''Initially, [capability review] reports would not be published to encourage open disclosure of information to the review team.'' That's a curious and ambiguous formulation in a number of respects. Does it mean that the first lot of reports should not be published or that their publication should be delayed? More importantly, if such a rule were to be applied generally, great swags of information would be kept under lock and key, a result much at odds with the blueprint's championing of ''more open government'' where there would be ''greater disclosure of public sector data'' enabling people to ''become more active participants … in government''.
The publication of capability review reports should not inhibit staff from disclosing information to the reviewers. On the whole, staff may be more likely to cooperate if they knew review reports were going to be made public rather than buried away, and publication would create incentives for reports to be acted on.
Happily, the review reports, including their associated action plans, will be published in a bundle at the same time that the Public Service Commission's annual State of the Service report hits the decks. They should provide an interesting view of the condition of public service agencies and what's being done to improve them, as well as fodder that may help parliamentary committees lift their gaze above administrative trivialities.
This tested technique, adopted from what many like to regard as the spiritual motherland of Australian public administration, has the potential to improve the operation of agencies and their capacity to work together. The scope of that potential will become clearer when the first round of reports are issued later this year.
Paddy Gourley is a former senior public servant.
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