In May this year the Commonwealth cut public service staff numbers for the first time in 15 years. Most states except WA are also cutting back. As Crikey pointed out in its state-by-state investigation into the cuts on Tuesday, this makes it a tough time to be a public servant.

In some states, as with the Commonwealth, it has been more than a decade since severe staff cuts were last made. This raises a problem for public sector management. Many senior executives in these public services have been promoted into their leadership and management roles in the last decade or less.

There is a world of difference between having a theoretical understanding of how to manage a shrinking workforce and the reality. Unless they have been through it, managers are more likely to get it wrong.

This has consequences for real people. Public servants are people too, with lives, obligations, families, commitments. The most important thing managers ought to be concerned about is how the changes affect people.

It is important to distinguish the facts from the rhetoric.

Ministers who make loud noises about cuts — especially in states with newly elected reforming governments from the right, like NSW and Queensland — may in private want services to continue to be provided by the public service and be sympathetic to the need to redeploy rather than sack staff. Other ministers may really mean it: because of past negative experiences they have a strong view that many of the public servants in their department have to go. It is vital that senior managers quickly establish which is which.

Staff cuts can be managed without disrupting people’s lives beyond what is normal in any case with any change of government. A new government has different priorities, axiomatically. Otherwise the previous incumbents would have been elected. So it is always the case that after a change some staff will move to different activities. If staff cuts have to be implemented at the same time, it is more often than not possible to cut parts of an agency while redeploying the staff affected by the cuts to work on the government’s new priorities. Combine this with the normal turnover of staff due to retirements and resignation and there may be no need for redundancies.

For this to work, managers need themselves to understand that this is manageable, and communicate that to their staff. In times of uncertainty, too much communication is never enough. It goes against all public service instincts, but even when managers don’t have the full picture it is better to communicate what they do know than to wait until they have a full set of information.

Some Commonwealth agencies have been offering voluntary redundancies to staff. They can be a good thing, an opportunity to refresh skills and make room for new staff. But if handled badly they can be more a curse than opportunity.

Lessons that have been learned from past cuts are that such schemes should never be entirely voluntary. If a public servant is doing a vital job, it is important to keep them.

Another lesson is that an agency may discover that key internal knowledge has just walked out the door with a voluntary redundancy package in hand. This will be a problem in those agencies that have no effective recording of knowledge and manage it poorly — they will not discover their losses until too late.

Then there is the question of how staff cuts affect the public — a concern raised repeatedly by the Community and Public Sector Union. It all depends on how departments implement any cuts.

At Commonwealth level there is a good case, as demonstrated by the Beale review on growth in the senior executive service, for any cuts to include the senior levels. Past experience is not encouraging, with cuts falling disproportionately on staff in service delivery roles. With a high level of courage on the part of the top leadership of departments it may be different this time: we will need to wait and see.

A final problem is the interaction between politics and staff cuts. It manifests itself in various ways.

The media attention paid to cuts gives the impression that mass sackings are about to take place — terrifying the workforce and destroying morale. In practice this is rarely the case; good managers make every effort to avoid sackings and seek to re-assign staff to other areas or even other departments if necessary. However, staff may not know that; they read the papers or watch the television news and get the same message as any other member of the public.

The rhetoric may be part political theatre, designed for electoral purposes. But sometimes new governments indeed do dismiss senior people, pour encourager les autres. When the Howard government dismissed a number of departmental secretaries in his first term, there was widespread speculation that one of them had been a clerical error. What was interesting was not whether or not a mistake had been made, but that no minister went on the record to quash the speculation — it was better for the government to foment a climate of fear at the top.

Australia has adopted over time an increasing tendency to adopt the Washington practice of a change of the top levels of the public service after a change of government — but without the checks and balances. Positive features of the Washington system include confirmation hearings to weed out the duds and a clear delineation between career public servants and political appointees.

Lack of such institutions is a weakness in our system, leading to potential for confusion between staff cuts for budget balancing purposes and those needed to meet new priorities.

Public service staff cuts used to be a much more regular occurrence — at any one time either the federal or one of the state governments was cutting. When their cutting inclinations were out of sync, public servants had greater chances of transferring from one to another. Today the political consensus around the need to cut budget deficits means cuts are coinciding.

Whether they become an organisational catastrophe or a more minor event depends on the quality of the public service management involved.

Public service numbers run in different directions to political preconceptions. As shown in that admirable reference, the Australian Public Service Commission’s State of the Service report, Commonwealth public service numbers grew far more rapidly in the later years of the Howard government than they have under Rudd or Gillard. Left-wing commenters who advocate increases in public service numbers might reconsider their position when they discover that ASIO and the Australian Federal Police have been amongst the fastest growing agencies.

There is no correlation between the size of a public service and the performance of a country: some with large public services as a proportion of their population are doing well, but so are some with small public services. The factor that does seem to make a difference is how efficiently and effectively a public service carries out its work.

Cuts do not necessarily affect services to the public. They can weed out unnecessary regulation, old programs that have passed their use by date or pointless internal processes. Similarly, growth can improve services or consist of internal wheel spinning. It is too simplistic to be either totally for or totally against either cuts or growth in the public service — what matters is how well it performs.

Peter Fray

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