The development organisation wants large numbers of bureaucrats from the Department of the Prime Minister and Cabinet who are working on "closing the gap" of indigenous disadvantage to be closer to the people they are trying to help.

But the proponents of the move could face stiff resistance trying to convince PM&C's city slickers to make a 2500 kilometre trek to a town like Alice.

PM&C's indigenous affairs bosses refused in 2014 to move 9 kilometres down the road to unfashionable Woden in Canberra's south where most of the rank-and-file works, with the top brass preferring to remain in the public service's dress circle in leafy Barton.

Three quarters of the department's 2000 permanent public servants are based in Canberra but PM&C says it has about 190 of its indigenous affairs employees based in the territory.

More broadly, the Northern Territory has lost a higher proportion, 15 per cent, of federal public servants since 2013, more than than any other state or territory, down to just 2,220.

Indigenous affairs programs were centralised into the Prime Minister's department during Tony Abbott's short-lived leadership, in an attempt to improve results from federal government efforts for Aboriginal and Torres Strait Islander communities.

But the transition was not a smooth one and three years later glaring pay gaps between public servants working on indigenous programs and their 'core department' colleagues still exist.

Mike Reed, Chairman of the NT branch of Regional Development Australia, Northern Territory, says the indigenous programs and services being pursued by the federal government are failing, and that PM&C might have better luck if more of its people were closer to the action.

Mr Reed made his pitch for a much bigger presence in a submission to the parliamentary committee examining the Coalition's controversial "decentralization" policies for Canberra-based public service agencies.

"The Indigenous Affairs Group, within the Department of the Prime Minister and Cabinet, already has employees in Central Australia," Mr Reed wrote.

"However, basing Indigenous Affairs in Alice Springs would demonstrate a true commitment to better understanding the needs of Aboriginal and Torres Strait Islander people.

"Indigenous programs and services are largely failing Indigenous Australians.

"Recent Closing the Gap reports demonstrate our lack of progress against most measurables associated with reducing Indigenous disadvantage, and this is particularly true across remote and very remote Australia."

Mr Reed said a move of large numbers of PM&C bureaucrats to the NT would help their connections with the very people they were trying to help.

"The decentralisation of federal government administration to Alice Springs should be seriously considered on the basis that it would improve connectivity between Indigenous Affairs programs, the NGO's who can best support these programs, and Aboriginal and Torres Strait Islander people," Mr Reed wrote.

"If the effectiveness of Indigenous Affairs service delivery can be improved this will have an immediate efficiency benefit for the Australian Government, more importantly it will have flow on benefits for the nation as a whole."

PM&C did not answer questions about what it thought of the Alice Springs idea, but said is already had 189 public servants working around the territory on indigenous programs.

"The Regional Network's...presence supports active engagement with communities and stakeholders," a spokesperson said.