Wise appointment: John Lloyd equipped to tackle the public service's neglected problems
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Wise appointment: John Lloyd equipped to tackle the public service's neglected problems

The new commissioner may restore relevance to the Public Service Commission's work.

When the Abbott government chose John Lloyd to be Public Service Commissioner for a five-year term from December 2014, it must have expected the "usual suspects" would not be tardy in finding his appointment wanting.

Lloyd's recent history as Australian building and construction commissioner made him an obvious target. Moreover, he had subsequently aggravated this egregious offence by a period as red tape commissioner in the Victorian government and a later sojourn as a research fellow at the Institute of Public Affairs. The Community and Public Sector Union was soon on the job, deeming Lloyd a "stalwart of the radical right"; this was not intended as a compliment. For union stalwart and Labor senator Doug Cameron, it was enough that Lloyd was "an IPA pin-up boy".

Public Service Commissioner John Lloyd has a plan to send elite executives to private companies .

Public Service Commissioner John Lloyd has a plan to send elite executives to private companies .Credit:Jay Cronan

Lloyd's appointment is unusual but not especially so when seen in light of the history of such appointments in federal government, whether to the Public Service Board in its various manifestations (1923-31; 1947-87) or the Public Service Commission of recent vintage. With a few exceptions, all such appointees have effectively come from the ranks of the public service itself, as does Lloyd in a broad sense. Even the big exceptions of the past both came from the NSW public service: the inaugural commissioner, the celebrated Duncan McLachlan (1902-14); and, in 1953, Keith Grainger, who had made something of a name for himself as a pioneer of that great fashion of the immediate postwar decades, organisation and methods.

Another two – A. V. Langker and D. L. Linehan – were, when appointed to the Public Service Board, on leave, having taken jobs on the union side. Sir Frederick Wheeler, appointed chairman of the board in 1960, was treasurer of the International Labour Organisation. He had been an increasingly senior officer of the Treasury between 1939 and 1952 when he resigned and went to Geneva. Most commissioners of the Public Service Board came from the staff of the board itself, even if some had, by the time of their appointment, moved to senior posts in departments.

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Until the 1970s, membership of the Public Service Board was a final posting. Thereafter, most appointees moved from the board to chief executive posts elsewhere in government. Among the chairmen, Wheeler subsequently headed the Treasury; Sir William Cole took the reins at Defence; and Peter Wilenski had a succession of jobs starting as head of Transport and Communications and concluding as secretary at Foreign Affairs and Trade.

Since its inception in 1987, there have been, before the Lloyd appointment, seven public service commissioners. Apart from Stephen Sedgwick, who has just completed a maximum five-year term, all came directly from departments and none had been previously on the Public Service Board's nor the commissioner's staff. (Sedgwick, when appointed, was director of the Melbourne Institute of Applied Economic and Social Research.)

Four had held secretary positions (John Enfield; Helen Williams; Andrew Podger; Sedgwick); the rest had effectively been deputy secretaries (Denis Ives; Peter Shergold; Lynelle Briggs). Of the seven, three (including two former secretaries) retired directly from the post and another former secretary did so after a brief interval. Three, including one former secretary, went on to secretary or chief executive positions.

Lloyd is a former officer (aka ongoing employee!) of the Australian Public Service, having previously been a deputy secretary in the Department of Employment and Workplace Relations. His state government assignments have included chief executive in the Department of Productivity and Labour Relations in Western Australia.

In the industrial relations field, he has been a senior deputy president of the Australian Industrial Relations Commission (as the Fair Work Commission was less pejoratively known in an earlier incarnation) as well as Australian building and construction commissioner. He has thus experienced both the tough end of industrial relations as well as the bureaucratic side. To this he can add membership of the National Occupational Health and Safety Commission. For those worried that his view of society is too limited, he could point to his involvements with the Cerebral Palsy Association in Western Australia and Hartley Lifecare ACT.

Lloyd takes up the role of Public Service Commissioner at a significant stage and a stage for which his background and experience provide important preparation. This arises as a consequence of one of the few commendable measures in the public service field recently: the decision to restore pay and employment conditions to the commissioner's jurisdiction after several decades of quietude while in the embrace of the industrial relations and employment departments in their various permutations.

This is possibly the most significant change in the evolution of the public service commissionership since its creation in 1987.

From an unpromising start, the commissionership came to enjoy some prestige. It could not, however, be said to rival what might be seen as an eminent counterpart office: the first commissioner of Britain's Civil Service Commission. And few would consider it to be, within the APS, one of the glittering prizes to which the most able, the most distinguished and the most ambitious aspire.

The most telling accomplishment of the public service commissioners in a quarter century has simply been survival of the office. It had an inauspicious birth after the Block report on the role and functions of the Public Service Board. But sentiment in the APS favouring a non-partisan public service was sufficiently strong to require a statutory overseer of recruitment and personnel management on a merit basis.

By contrast, the mighty NSW Public Service Board, when it met the same fate shortly afterwards, left no residual heir. The recent history in Macquarie Street (Sydney) suggests, however, that when, within the machinery of government, there is no institution responsible for professionalism and ethical conduct, it eventually becomes necessary, again, to invent one!

The commissioner's role was initially very modest, largely centred upon what is sometimes known as staffing in a very narrow sense. Management of the senior executive service was probably the most substantive responsibility. Some functions of the Public Service Board had essentially been discontinued; others were unhappily relocated to the Finance Department where, in the main, they withered.

But the big task, which brought real weight and traction with the service, namely pay and employment conditions, was separately lodged in the then Department of Industrial Relations. It hardly prospered and the function was of such little significance as rarely to rate much of a mention in annual reports.

The commissioner has had a phoenix-like quality, slowly, and usually surely, not so much rising from the ashes as putting down some very firm roots. In the first instance, espying a gap in staff development and training, a major and enduring line of business grew on a cost-recovery basis. This characteristic continues to this day: the commissioner has a staff of slightly more than 220, about half of whom are reportedly engaged in providing services which are funded on a cost-recovery basis.

In the mid-1990s, the commissioner was also able to claim a place in preparation of new public service legislation and eventually to become custodian of its passage to the statute book. This exercise had losses as well as gains. On the loss side, the commissioner's role in managing the SES was steadily circumscribed, as departmental and agency heads asserted greater autonomy. On the gain side, if it can be so described, a new centre of activity was devised: the APS values. Endowed with more labour than the 10 commandments (or even Woodrow Wilson's 14 points), these have become a constant source for speeches, articles, conferences, seminars and training sessions. The commissioner, in the role of overseer of ethics and conduct, had a visible tablet from which to work.

From its inception in 1902, the first commissioner had a statutory remit to report to Parliament on the "condition and efficiency of the public service". This obligation, with the effluxion of time, became a duty to report on the "state of the service". It was the basis for an enormous industry, based on extensive surveying, annually, of serving public servants. But its essential limit was that it was confined, if not rigidly, to the responsibilities of the commissioner. There have been important aspects of public service administration that have accordingly been beyond its purview. High on this list is simply the size and cost of the service, which should, logically, be an opening chapter.

Along the way, the quest for survival was aided by the centenary of the APS, part of the celebrations in 2001 marking the centenary of the Commonwealth. This provided an occasion to extol the contributions of the APS to the governance of the Commonwealth and record its achievement in a handsome publication.

Assurance of survival came with the Rudd government's decision to review the public service. It was not clear that the service needed this review, which, in the event, proved nothing so much as that the age of reform was well and truly exhausted: the need for "reform" is not proven by going through the motions with constant repetition of the word.

The acting commissioner of the time was a member of the review body from the start (replaced in the course of time by the public service commissioner when appointed). Instructively, though the review team included the secretaries of the Treasury and the Environment Department, and the director-general of the Australian Secret Intelligence Service, it did not include the secretary of the Employment Department!

The report, Ahead of the Game, disarmingly recommended: "If agreed by government, the responsibility for Australian government policies for agreement making, classification structures, APS pay and employment conditions, work level standards and workplace relations advice would transfer from the Department of Education, Employment and Workplace Relations to the Australian Public Service Commission."

It was hardly a shining example of evidence-based policymaking. The review did not at any stage analyse or assess performance of the employment (pay and conditions of employment) function in the APS, notwithstanding the great size of wages bill. While it did not appraise the performance of DEEWR, its subsequent proposals about how the commission needed to be strengthened left little doubt that such appraisal would certainly have been brief and the grading would not have been high.

In awkward consultant-speak, Ahead of the Game observed that the commission would need to develop greater expertise in: workforce planning; human capital benchmarking; labour market analysis; centralised assessment and procurement of learning and development; and "classification structures, pay, employmenmt [sic] conditions and work level standards and public sector enterprise bargaining and workplace relations advice".

If public inquiries seek to make recommendations that they expect to stand the test of time, they need to back them up with cogent analysis of the situation they wish to improve combined with clear exposition of remedies for identified deficiencies and sustained advocacy of those remedies and their rationale.

This was too much of a burden for the Rudd review team. Thus, when the government changed late in 2013, the new structure, though it had statutory endorsement, lacked convincing rationale.

In another tawdry piece of decidedly confused analysis, without too much stress on factual accuracy, the National Commission of Audit established by the Abbott government proposed undoing the recent changes. Though the audit commission was not so clear in its thinking as simply to advocate abolishing the public service commissioner, it proposed that the commissioner's role and responsibilities be "assumed" by the secretary of the Employment Department, and that the relevant functions be transferred variously to Employment, Finance and individual departments and agencies.

With uncharacteristic clarity, the audit commission also advocated abolishing the role of the merit protection commissioner and transferring responsibilities for the code of conduct to, amazingly, the Employment Department! It is breathtaking that, given the indifferent performance of the Employment Department in public service matters over a generation, the audit commission should have wished to return an even larger portfolio of responsibility to that agency.

The recommendations could only have carried weight with readers with no knowledge or understanding of even the most recent history. It is unsurprising the proposals went nowhere. The basic meaning of Lloyd's appointment as Public Service Commissioner for five years is the most emphatic rejection, by the government, of the National Commission of Audit's recommendations.

Lloyd's appointment is also significant in that, unlike his predecessors, he brings substantially relevant background, particularly covering the commissioner's enlarged industrial relations jurisdiction. Lloyd will inherit a large backlog of work in this field, given the history, but his agenda will not be limited to pay and conditions.

He will need to address the question of underperformance, a favourite topic of many observers of public service on which there has been more repetition than explanation of what is at issue. Increasing use of what are termed "spill and fill" practices bring a belated application of merit to handling redundancies; reverse order merit has been, by contrast, a feature of North American personnel practice for at least four decades. Promotion processes are probably due for some examination, too.

Successive commissioners have done well to maintain a stake in staff development and training, but this is still a Cinderella field and is detrimentally influenced by the dysfunctional thinking that underlay the Hawke-Keating governments' training guarantee legislation.

Another item for the agenda, long term, is an intensive review of the APS's connections with the Australia and New Zealand School of Government. There are legitimate questions about how well this body contributes to meeting the staff development requirements of the APS, mainly for the upper echelons and those destined for senior rank. The research side should also be addressed because, after a decade, it is far from clear that ANZSOG's presence has had the effect of enhancing and increasing research on government administration; what is clear is that the avenues of funding have changed.

Even a brief consideration of the tasks confronting the new commissioner is sufficient to show that, when he was appointed for a five-year term, a wise decision was made.

J. R. Nethercote is an adjunct professor at the Australian Catholic University's Canberra campus. He is a member of the Institute of Public Affairs. john.nethercote@acu.edu.au