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May 2, 2014

Relax, public servants, CoA cuts not as bad as you think

The Commission of Audit has suggested slashing 15,000 jobs from the public service and making mandarins more efficient. But the recommendations are reasonable, and not as dramatic as they seem, writes governance expert Stephen Bartos.

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The Commission of Audit estimates that its recommendations could lead to a loss of 15,000 Australian public service jobs. But that is less frightening for the public service than it appears.

Some are likely to arise from privatisations, which do not necessarily lead to job losses. For example, privatising the Defence Housing Authority would mean a change of ownership, but people will still be needed there to deliver housing to Defence personnel. While privatisation sometimes does lead to staffing reductions, it is not always the case.

Second, the government is not likely to accept all the recommendations. There may well be fewer job cuts than the commission recommends.

But most importantly, at least any cuts that come in the budget would be associated with specific initiatives, so public servants affected will know where they stand. There are good and bad ways to cut. The Commission of Audit sensibly rejects across-the-board efficiency dividends as a “blunt instrument” that has reached its limits.

Nevertheless, there are already public service cuts underway as a result of the past government’s additional efficiency dividends. Any further cuts will come on top of these, which will severely affect some agencies. Because the Commission of Audit is targeting particular types of cuts — for example, to Defence Force headquarters and executive-level staff — the Canberra economy would be hard hit (assuming, that is, the recommendations are agreed by the government and announced in the budget).

Some of the public service recommendations have been well foreshadowed in public comment — for example, cuts to the Defence materiel organisation and to climate change agencies, and mergers of a number of health agencies. Although there are new recommendations for abolishing or merging numerous Commonwealth bodies, many of those slated for abolition are committees or advisory boards where the main effects will be felt not by public servants by a very small number of board members.

Recommendations on e-government and transition to online service delivery could just as easily have been welcomed by the previous government. It is where all services, including public services, are heading. The Commonwealth lags behind states and other countries and has to pick up its game. Better online services can and should be implemented regardless of political preferences.

The report, especially in phase 2, includes numerous recommendations on improving public service performance.

Some of them are well overdue. The commission notes (recommendation 10, phase 2 report) that “there is no systematic evaluation of programmes at the Commonwealth level”. There used to be. All programs had to be evaluated and the evaluation reports published. That requirement was dropped in 1996; ironically, it might have been as a consequence of the Commission of Audit report back then. I have no inside information from that time, but have been told this was done on the logical (if impractical) rationale that every government service could be outsourced and therefore did not need evaluation. That is, the assumption was that contracting out would build in its own evaluation through tender assessment processes.

“Everyone claims to want better performance, but good intentions butter no parsnips.”

Return of evaluation would be a welcome improvement. Oddly though, the audit recommends that the reports be provided to the Department of Finance. Public accountability would be far greater if evaluation reports could be made public, or at the very least, to the Parliament.

This and other recommendations under the heading “public sector accountability and performance” will depend heavily on whether or not the public service itself takes them seriously.

Everyone claims to want better performance, but good intentions butter no parsnips. These chapters could have been written under any government of the last 30 years.

Public service performance only improves if ministers insist on it, are prepared to be held account for it in Parliament, and are supported in this by the senior leaders of the public service.

If the audit phase 2 report leads to strong resolution on the part of ministers to press for better performance, it will have done the country a service. An important question, though, is whether we will ever know. Alongside better performance information has to be transparency. The report suggests greater auditing by the Australian National Audit office of agency performance information, which will help, but lacks other specific recommendations on how to improve transparency.

There needs to be online publication of meaningful and digestible performance information, and willingness on the part of ministers and parliamentarians to interrogate public servants and pull them into line when performance is lacking. The Commission of Audit fails to address the incentives in our political system for both ministers and public servants to hide information on performance so as to avoid “gotcha” moments and negative headlines.

The phase 2 report also draws attention to the problem of “spans of control” (a bit of wonky HR jargon) that have led to public service departments becoming top-heavy with executives.  As with performance reporting, it is worth identifying the problem, but the only way to fix it will be through better leadership by the public service itself.   The suggested action (including “all portfolio secretaries and agency heads to prepare plans to improve management structures and spans of control for ministers within 12 months”) leaves implementation to internal processes within government. It seems that the commissioners exhausted their stock of tough and specific recommendations in phase 1 and left public servants to write most of phase 2.

The problem is that under current incentive structures the public service won’t make these changes of its own accord. The themes of better accountability, better performance, reduction of layers of management, better use of IT and better corporate services have all been around for years. If the public service had wanted to implement these for itself it could already have done so.

Ministers themselves will need to take action. They don’t have the capacity to manage departments. But they can insist on better performance reporting, enlist the public in the task by making that reporting more open, be prepared to accept the risks that come with change, and ask public service leaders who are resisting change to move on.

Most importantly, they need courage to stare down the negative headlines that will come. Change is never risk free. The major barrier to better public service performance in recent years has been ministers’ insistence that public servants make no mistakes. There is no way any manager, whether in the public or private sector, can guarantee they will make zero mistakes during a change to bring about better performance. A solution to the problem of ministerial timidity is beyond a commission of audit — it has to be up to the government of the day.

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7 thoughts on “Relax, public servants, CoA cuts not as bad as you think

  1. Boerwar

    Bartos writes, ‘Everyone claims to want better performance, but good intentions butter no parsnips.’

    If intentions matter, individual APS parsnips look to be safe with Bartos around. No butter of human kindness for them. Perhaps Bartos is writing with good intentions but his article comes out to be somewhat sickening, IMHO. Here is why.

    (1) Firstly, it is obvious that Bartos will not be losing his work as a result of the changes. He is talking about other persons’ job losses. Like other seagulls, he is too obviously comfortable and relaxed as he soars over the heaving, sweating masses. He does not seem to get it that he is talking about real people, with real families, with real friends and with real mortgages and with real debts. Maybe he does. If he does, he hides his feelings well.

    (2) Despite Bartos’ blithe assertion to the contrary, not all of the APS will know whether they are for the chop. This stuff will take years to work through – years in which productivity suffers, and years in which people live with the stress and uncertainty of not knowing what their future holds. Meh. According to Bartos, maybe they will keep their jobs but in the private sector. Meanwhile, they need to get their service delivery online. They need to do some evaluations. They need to get their ‘management spans’ right.

    (3) Assuming half the additional 15,000 jobs (taking the total to around 25,000 job losses over a couple of years) go from Canberra, the ACT and regional economy will sink. In fact the sinking has commenced. House prices are falling. Canberra Airport is quiet. Private sector capital investment in the ACT is, to say the least, toey. Commerical vacancy signs are popping up like daffodils in spring. Most alarmingly, life is even getting tough for consultants!

    Oh, and the figure of 15,000 additional job losses is the ‘minimum’ figure. Are we really looking at an additional 20-30,000 job losses? Who knows? Certainly not Bartos. Nor those who might, or who will, eventually lose their jobs.

    (4) Those who survive all this roil will, no doubt, appreciate the opportunity to have something to do for longer hours for political masters who really appreciate the APS’ efforts at not dragging down the eocnomy, and Australia with it, even more.

    (5) There will be a flow-through into private sector job losses. In other words, as Bartos knows and ignores, it is not just the primary APS job losses that matter. Bartos advises that some public sector job losses will survive into the private sector. Perhaps the private sector job losses will enable the workers involved get a job in the APS? Just kidding. Not even Bartos can bring himself to suggest that. Maybe they could become governance consultants?

    (6) Unlike the case with job losses in every other industry, and in every other location, public servants can be secure in the knowledge that their job losses, their life disruptions, and the impact on themselves and their families will be greeted with responses that range from profound indifference to overt, vindictive glee. No dramatic vox pops. No blaring headlines in the MSM. No hand wringing from concerned ministers. De nada. Based on the contents of his article, I rate Bartos at the indifference end of the scale. Maybe not. If he is concerned, he hides his concern well.

    (7) Many of the job losers will go to their unemployment benefits comfortable in the knowledge that the work they have spent a lifetime on is valued at zilch, that their dedication is valued at zilch, and that their contribution is regarded as a nefarious drag on the economy. Human beings have these sorts of thoughts and the feelings that flow from these thoughts. Those with, for example, a real concern about the impact of AGW on Australia will, no doubt, particularly appreciate the irony of their jobs being consigned to the round file.

    (8) Mr Bartos might have commented on the change-management style of suggesting that, rather than being concerned about their jobs, public servants should be concerned about their country. Curiously, this line is never, ever offered to finance industry spivs, governance consultancy experts, miners who frack the joint, audit commissioners, or inefficient farmers.

    But wait, there’s more. The chap who had the effrontery to mouth this unctious platitude was up before Senate Select Committee this morning: something about his political donation being funnelled, through what possibly constitutes yet another mob of NSW crooks and liars, to Liberal Party election campaign expenditure. Whatever. He did the Sergeant Schulz, so no real harm done. Inspirational leadership for the APS to follow, abounds.

    Bartos reckons that ‘Ministers themselves will need to take action.’ Really? Bartos ignores the uneveness of the impact of the quality of political level on the effectiveness and efficiency of the APS. Bartos finds it easier to blame departments and their bloatocrats for their shortcomings. Perhaps he knows who really butters his parsnips?

    (8) There is hidden damage to the APS which Bartos also ignores. One is the ongoing ability to attract quality. The second is the flight of quality.

    IMHO, with this sort of look-at-moi article, Bartos has placed himself well for some new broom consultancies on how best to improve governance, fix the APS shortcomings, and ‘manage out’ the APS sweepings.

    But maybe that is a bit cynical and a bit over-critical?

    Maybe Bartos really does care about the tens of thousands of real breathing people with warm blood flowing through their arteries who are going to get the chop along with the tens of thousands of fathers, mothers and children who are going to be suffering through the chopping process?

    If so, it would be nice if he had spent a whole sentence saying so.

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