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Synergies - New approaches to working together in Government

Annual Government Business Conference
The Future of the Australian Public Service
Gold Coast
20 May 2005

I would like to thank the Queensland Regional Heads Forum for inviting me to speak to you today about the future of the Australian Public Service - a topic at the heart of my professional interests as the Australian Public Service Commissioner, and about which, after more than 25 years of public service, I can't help but take a personal interest. 

The theme of this conference - synergies: new approaches to working together - strikes a particular chord with the current direction of reform in the Australian Public Service, and I want to speak about that in some detail today.

The future viewed in the context of the past

I want to begin by situating what I have to say within a brief summary of where we've come from in terms of public sector reform. Much of what we are doing in the Australian Public Service, is conditioned by the decisions and actions of the past.

Thirty years ago the Royal Commission into Australian Government Administration - the Coombs Commission - was the first independent, wide-ranging inquiry into Australian Government for over 50 years. The Coombs report marked a water-shed in administrative thinking and reform - recommending far-reaching changes to the structures and direction of public administration. The report's key themes:

have been a catalyst for, and have strongly influenced, public sector reforms.

Coombs' vision resonates in the devolution of authority brought about by the financial and personnel management reform legislation that culminated in the Public Service Act 1999 - reforms that provide the flexibility and agility needed for strong public sector performance, while providing stronger accountability, enhanced capability and responsiveness to Government. As well, the public sector led important workplace reforms to adjust its "fit" to changes in society, particularly in the employment of women and other disadvantaged groups.

It would be a mistake, however, to think that reform is substantially complete, or that we will ever get beyond reform.

In the last six months I have spoken to a lot of people - here in Australia, and in New Zealand and the UK. There is a view emerging that Australia, having been a leader of public sector reform for the last 20 or 30 years, has perhaps taken its eye off the ball. I wonder whether after decades of reform we are suffering from a little 'reform-fatigue', or whether we are becoming a little complacent.   

It is as important now as it has ever been that we - at all levels of government - are critically engaged with the challenges before us - of public service in the information age - and that we continue to strive for improvements.

New reform directions

Current reform directions are focused on positioning the Australian Public Service for the future. The deepening of structural reforms through Uhrig reviews and corrections, which I will speak about in more detail in a few moments, will provide a more coherent basis for cultural reforms within the Australian Public Service.  

Our workforce, too, will be a top priority for reform - we will need to plan much more actively, develop our staff more strategically, and engage more effectively with them if we are to meet the productivity challenges before us.

To manage the increasingly flexible and transparent operating environment, we will need to become more professional and to refresh our core skill sets for policy, programme management, regulation and service delivery, and we will need to position ourselves to drive forward new longer term policy reforms. And, in my view, the SES will need to be strengthened to lead and deal with these new reform areas.

Uhrig reforms

It is probably accurate to say that the initial structural reforms associated with devolution are mainly settled for the present, and that we are now looking at a second stage process of what Peter Shergold has called "a continuing process of reform and review." The Uhrig report marked the beginning of this second stage.

Properly titled the Review of the Corporate Governance of Statutory Authorities and Office Holders, the Uhrig report called fora more rational and consistent approach to determining where policy responsibilities should lie and the financial frameworks that should apply to Australian Government entities. Specifically, it saw the need for a more coordinated approach to governance that would align the Financial Management and Accountability Act with those agencies that should be legally and financially part of the core Commonwealth, and the Commonwealth Authorities and Companies Act with those that should be legally and financially distinct. The template developed by Uhrig indicates that financially and legally distinct agencies would have governing boards; those that are financially and legally part of the core Commonwealth would not. The Government agreed with these recommendations.

This is an unfolding issue. In practice we are looking at a significant and probably contested process of review of the governance arrangements of around 170 bodies. If the Uhrig template were mechanically applied, most of the public sector bodies with a board would no longer have one. In some cases this will be appropriate - eg, Minister Hockey has already announced the abolition of the Centrelink and Health Insurance Commission boards. In other cases, it will be less clear cut.

Boards of regulatory agencies that have had an ongoing role in the grey area of regulatory policy will come under scrutiny as part of this process. There are important issues here around Government ownership of policy and agency ownership of regulatory practice; and there are decisions to be made in each case about how the Uhrig templates will shape the regulatory policy that lies between.

The Public Service Commission's particular interest in these governance arrangements relates to appropriate Public Service Act coverage. Commonwealth bodies performing public service functions funded by the taxpayer should, in my view, be subject to the FMA Act as Uhrig argues, and should at the same time have their employment framework brought within the Public Service Act unless there are impressive reasons for an alternative position.

This would add substantially to the coherence of our institutional culture as well as our governance framework. It would mean that public service values are applied more consistently to the performance of public service functions and to the way in which public servants understand what is expected of them and what it is that they do. They would link the Uhrig review to the second major reform process of our decade:  the focus on substantial cultural reform.

Cultural reform

Cultural reform is fundamentally about the identity of public servants:  whether we consider ourselves agency employees or part of a broader public service; whether we see ourselves as simply delivering outputs or resolving national problems; whether our first impulse when looking at a public issue is to see processes or to see possibilities. Cultural reform is about a shift in the way public servants think about themselves and how they go about their work.

I'm sure I don't have to tell anyone here today that whole of government activity - of how we work together - is at the centre of the cultural reform agenda. Features of such a culture include:

The 'why' of whole of government

This is essentially a 'how to' checklist for whole of government working. But firstly, I want to consider the 'why' of whole of government activity. Why is working together regarded as critical to the success of public sector organisations?

There are some obvious reasons for working together - for improved service delivery for example. But the imperatives for whole of government working are more deeply embedded.

Economic, social and technological developments in Australia have given rise to new social demands, new capacities to respond to those demands, and new relationships between governments and citizens - an environment in which our educated and empowered citizenry are looking to amend their social contract1.

At the same time governments in Australia and around the world have relinquished control of key economic levers by, for example, floating their currencies and deregulating financial systems. They operate within a global economy, and are no longer the masters of their own domain. Consequently governments now have to use an interacting set of complementary measures to achieve the same goals.

Because Government can no longer directly manipulate key economic levers in order to increase workforce participation, for example, it must look to a range of intersecting measures, such as education, training, child care, health, income support and mutual obligation which are tailored to the particular circumstances of individuals, to achieve the same ends. These sorts of interconnected strategies can only be successfully applied with a whole of government approach.

The JET (Jobs, Education and Training) programme is a good example of where this sort of approach has been successfully applied for almost 20 years.

JET is a programme for sole parents, to help them get back into employment. It recognises that there is more than one pathway to employment - and plenty of barriers too - so the programme brings together:

JET was established in the mid-1980s, bringing together the then Department of Social Security, the then Department of Employment, Education and Training, and the then Department of Health and Housing - with links to State government and to community agencies. It now connects to large numbers of 'partners' - employment agencies, private child care providers and so on.

The Government's Budget initiatives, proposing that:

can be seen as modifications to some of the interconnected measures the Government is using to increase workforce participation.

This kind of interconnected approach is also applied to issues of a global concern:  illicit drugs, immigration, climate change.  Interconnected strategies addressing complex problems of this nature now have to be delivered through a more devolved set of arrangements, including the privatisation of some previously government business, a shift from direct service delivery to regulation and contracting out and the creation of quasi-markets - the tools of government as it responds to changing needs and capacities in the 21st Century.

Whole of government activity is a response and adaptation to the complex and challenging environment of modern government - how we remain relevant in a new and fundamentally different world. It is not a single instrument, for, say, collaboration on service delivery; rather it is a cohering principle, necessary to maintain our sense of government as a consolidated entity, a single system that can be worked upon to respond to the problems identified by the government and the community.

A culture of working together

In the past the outcomes we are now looking to achieve from whole of government activity were mostly pursued through organisational restructuring and machinery of government of changes. What's new is that today's whole of government approaches tend to look primarily to the development of organisational cultures, capabilities and relationships that support, model, understand and aspire to whole of government solutions.

At its most simple whole of government working is about working collaboratively with officials in other portfolios and across jurisdictions - finding ways to integrate policy and programmes and achieve more efficient and effective implementation and service delivery. This can be both within governments and across governments.

It signals an important paradigm shift - where public servants move beyond agency-bounded limits to their thinking and embrace problem solving that is integrated, efficient and focussed on achieving shared outcomes across portfolios and across jurisdictional boundaries. It is the shared outcomes and the collaborative working style that make it unique.

Technology as an enabler of whole of government working

Technology is another key driver here. The dilemma for the public sector is captured well, I think, in a recent book by William Eggers - Government 2.0: Using technology to improve education, cut red tape, reduce gridlock, and enhance democracy. Eggers argues, essentially, that the public sector is struggling with the shift from government in the industrial age (hierarchical and agency-centred) to government in the information age (less-hierarchical and citizen-focussed). While existing technologies give legislators and public servants the power to transform almost everything, he argues, their thinking has not yet caught up with their technological tools - the industrial age mindset lingers to the detriment of public policy2.

Egger's book is written with reference to the U.S. experience, but some of it resonates here in Australia. Not everyone has cottoned-on to the speed at which things are moving - enabled by technology - and how responsive we need to be to government and to the community.

My particular interest, of course, is the Australian Public Service - but I'm certainly not under any illusion that we can do it alone - that would be counter to the purpose and spirit of what where trying to achieve - a shift to public service in a modern democratic society - seamless delivery of effective, efficient and integrated programmes and services to the Australian community.

And of course we're not doing it alone. I know that there has been a strong commitment to collaboration here in Queensland. The Queensland Regional Heads Forum - the most senior leadership of the Australian Public Service in Queensland - has committed itself to identifying more closely with the whole of government agenda. Their terms of reference include a commitment to 'Build cooperation among members in the implementation and delivery of whole of government services to achieve better outcomes'.  This conference is part of the work that is being done here - it reinforces the message that by working together - in organisations with supportive cultures and the right capabilities - we can build a public sector culture that will achieve better outcomes for the Australian community. This message is also implicit in the forum's motto: 'We share, we prosper'.

The Goodna Service Integration Project, which was featured in the Management Advisory Committee report on Connecting Government in 2004, was developed to test how the community, government and non-government agencies can work together to improve community wellbeing. The broad aim of the programme was to 'reform and improve government processes and structures according to local need'. It focussed on enhancing the capacity of government agencies to develop integrated responses to community needs through the development of collaborative relationships between State, Australian government and local government agencies active in delivering services in Goodna.

The project was a partnership between the Queensland Government, Ipswich City Council and the people of Goodna. Australian Government involvement was at the regional level (Centrelink and DOTARS) and through membership of the Service Integration Project Team.3 This is an excellent example, and I'm sure there are others here in Queensland, of how by working together we can really make a difference to the quality of life in communities.

As with all things, our approach to working together should be balanced. What are the benefits? What are the costs?  While I would like the Australian Public Service to develop a cultural bias for whole of government working, and I don't think we're there yet, it would be counter-productive if it were to become a strict orthodoxy that is applied without consideration.

Connecting Government, the Management Advisory Committee report that officially put whole of government working on the agenda (in the Commonwealth), includes a checklist of issues that agencies might consider when weighing-up the benefits of using a collaborative approach.

So, what might Connected Government look like?

The Australian Government's response to the Asian tsunami has been a text book example of connecting government in an emergency. The Prime Minister described our response as "the Australian Public Service working at its dedicated and professional best". Similarly, our response to the Bali bombing was swift, decisive and co-ordinated, with a focus on alleviating wherever possible the burden on those involved.

But, whole of government collaboration shouldn't stop at crisis management - it should be about how we operate every day:

The mainstreaming of the Government's Indigenous programmes is designed so that funding for Indigenous people from all sources is coordinated and effective, and that Indigenous communities at the local and regional level have a say in how the money is spent. It will also provide the framework for more cooperative working with the States, Territories and local governments, who play a critical role in serving Indigenous Australians.

The Secretaries' Group on Indigenous Affairs, made up of the heads of eleven Commonwealth agencies, including the Departments of Prime Minister and Cabinet, Immigration and Multicultural and Indigenous Affairs, Family and Community Services and Health and Ageing, recently signed-off on the first bulletin outlining whole of government arrangements for Indigenous affairs. This was the first time that a large group of Secretaries have collaborated in this way to issue a joint communication to their staff. The bulletin set out the Government's expectations for 'Shared Responsibility Arrangements', which are "critical to making a difference on the ground and therefore a significant priority for the government in working for better outcomes for Indigenous Australians"4.

Another joint communication, this time from myself and all of the 18 portfolio Secretaries, which I'm sure you are familiar with, is titled 'Working Together', and was also issued recently. It sets out what is expected of Australian Public Service employees working on whole of government initiatives. The communication emphasises the importance of working across organisational boundaries to achieve policy and service delivery objectives. It also outlines some of the significant whole of government activity that is already being undertaken - especially at the Senior Executive level - but notes that Australian Public Service employees need to look beyond the immediate interests of their own organisation to the broader context. It goes on to provide practical guidance on ways to achieve the best results from our collective endeavours.

The APS workforce

The reforms we face do not stop at structural and cultural change. We are facing serious workforce planning challenges. Our workforce is ageing. The labour market is tight. It is contracting as a result of demographic change and, on the demand side, because we require a mainly tertiary educated workforce. There are already skill shortages and these are likely to expand, particularly if there is not sufficient attention given to identifying what skills we will want in future.

In any event we will have to train to maintain and to update the skills we need, and this means knowing how and where to invest the training dollar.

We have to retain employees and there are issues there too. Our structures are too hierarchical and our employment framework is still too rigid, given our skills profile and technological requirements. Finances are tight and are unlikely to become any more plentiful over time, which means that we will have to look more creatively and more strategically at what we can get out of agreement making.

Peter Scherer, Counsellor to the Director of Employment, Labour and Social Affairs Directorate of the OECD, who has been in Canberra this week, supports the view, as I do, that the public sector has achieved good productivity relative to the private sector (even better in some areas), but emphasises that our workforce challenges - especially our capacity to attract young skilled people in the context of workforce constraint and the continuing departure of the 'baby boomer' cohort will be critical to future success in the public sector. Our workforce planning will be critical.

We must become a more attractive employer, and this means we must be confident about our culture and what it means to be a public servant in Australia in the 21st century. We need to look forward, think strategically about the future, and target the best, the most capable people and the most talented leaders, while at the same time looking to maintain the diversity of our workforce.   

Therefore workforce planning is an area where senior leaders in the public services of all jurisdictions must become more involved. Our HR areas have been grappling with how to most effectively plan for the workforce of the future, but they can't do it alone. Strategic direction needs to come from leaders and managers who understand the day to day business of their agency best - from the people who can best articulate the skills and capabilities that will be needed to continue to deliver the business of government.  We can't be inward looking about this, we must respond to the changes and complexity in the external environment.

Attracting and retaining staff in this more competitive labour market

We need to be more innovative in how we go about attracting and retaining staff in this more competitive labour market. We need to look for opportunities to collaborate.  For example the social policy agencies of the Australian Public Service could form a partnership to attract, develop and retain staff, including through orchestrated mobility between agencies.   This sort of opportunity for staff to develop breadth and depth of experience by offering career pathways where staff move on a planned basis across say FACS, Health, Human Services, Centrelink and the HIC and State jurisdictions is potentially a way for us to keep our people at APS 3-4 and EL1 engaged. With each move staff would gain experience in all facets of social policy. Likewise the industry agencies or financial agencies could consider a similar scheme. This is just one of the initiatives the Australian Public Service Commission is thinking about, and is one of many options that may be considered by the Management Advisory Committee as part of its current work on Managing and Sustaining the APS Workforce.

Culture and engagement

Getting people with the right skills and capabilities is obviously critical. Equally challenging is how we engage our staff, partners and clients in the work of the public service. The alternative is to risk becoming irrelevant or going broke.

We know there are clear links between engagement and effectiveness and, in turn, with productivity. Research by the Corporate Leadership Council, for example, suggests that organisational culture and leadership have a much greater impact on employee 'engagement' than non-cultural factors, such as financial rewards. Engagement is a composite measurement of employee commitment to their organisation, how hard they work, and how long they stay because of their commitment5.

The Corporate Leadership Council surveyed 50,000 employees (including in Centrelink). They found that the top five cultural traits that have the maximum impact on discretionary effort - contributing to engagement, are:

On the basis of their research the Corporate Leadership Council estimated that only about 10 per cent of employees are fully engaged - they are the 'true believers'. Of the rest, more than ¾ are up for grabs; they are neither fully engaged nor fully disengaged and the rest are so unengaged that they probably should move on. What the number up for grabs suggests is that there is huge scope for leaders to affect the engagement of their workforce - for commitment and productivity. The message is that if we are to meet our productivity targets, there is no better place to start than with the engagement of our workforce.

Australian research shows that public sector employees feel greater pride in working for their organisation than employees in other industries, and are less likely to consider quitting their job in the next 12 months. This finding is attributed to the fact that they feel good about working in the public interest.6 Job satisfaction results from the State of the Service employee survey7 also suggest that cultural factors, particularly working relationships, are critical.

Given what the research is suggesting about the impact of cultural factors on employee engagement, and in particular the impact of perceptions of integrity in the workplace, there are some areas of concern for the APS. It is worrying, for example, that although the great majority of Australian public service employees are confident that their immediate managers and colleagues act in accordance with the APS values (that's the good news), they are less confident that their senior managers do so.

The imperative to get this right should not be underestimated. If our senior leaders are seen to model and champion public service values, other staff in the organisation will actively engage with them. Where senior managers are silent or indifferent other employees may treat the values as empty rhetoric8.

In this year's APS employee survey for the State of the Service Report - which has been in the field since May 16 - we have included specific questions about the pride people feel about their work.

I believe that the Australian Public Service needs to hold fast to its identity as an important national institution - a professional career service bound by an ethos of public service. Our professionalism, integrity, and the important work we do, besides being fundamental to our very existence, gives us leverage in the employment marketplace - as an employer of choice.

Professionalism and our policy development role

The Australian Government relies on the APS for policy advice and development, and for many of us it was a passion for good policy outcomes that brought us here and has kept us here. The APS should be mindful that we operate within a contestable environment - we stand alongside ministerial advisers, lobbyists, and interest groups. Our position in relation to policy is secure, in my view, only so long as we maintain our reputation for impartiality and quality, and for working in the national interest - in short, for being a professional public service. As long as this is the case the APS will have a natural advantage as the voice of the public interest.

During my recent visit to the UK it was suggested that the influence of the British civil service in important areas of policy was eroded when Tony Blair came to office, because of a lack of trust. The civil service was seen as focussed somewhere other than on the Government's agenda and, not surprisingly, the Government was taking their policy advice elsewhere.

There may be some parallel trends here in Australia with:

I think an important reform direction for the future is how the Australian Public Service will provide the Government with policy solutions for challenging longer-term policy questions and the role that line agencies should play in driving the thinking and ideas generation behind those solutions.

I don't have the answer for this, but I offer a few clues.

I notice that in New Zealand we are seeing heads of line agencies form committees to understand the interactions and overlaps between their agencies better, and to develop longer term policy plans. Our Secretaries Indigenous Group is a good example of this, but we could, and should, be doing more of this across line agencies if we are to be effective. To do that, we will need endorsement to legitimise the work.

The Cabinet Policy Committee process can also provide the means to raise longer term issues as we have seen for energy policy and the environment.

Beyond that, public service employees need to be trained to develop research and strategic policy skills and agencies may even need to consider reintroducing policy cells to improve quality.

Line agencies need to pursue these opportunities (and others) aggressively in my view.

An important related issue is that of diversity. How can the APS claim to represent the public/national interest in policy matters if it is not itself broadly representative? We need to recognise the diversity of our workforce as an organisational resource.  Of course, we will seek input from stakeholders in the community, but it is critical that we bring a wide range of perspectives to the task of policy development. Our Indigenous employees bring an understanding of the importance of family, community and the land, for example, that we need to inform not just Indigenous policy development, but policies for the community as a whole.  Again, I think line agencies have a particular role here - their workforce is more diverse than central/policy agencies, and they have a direct link to the communities they serve.

Politicisation puts our professional identity at risk

The status of the APS as a non-partisan service is critical to our professionalism. Fears of politicisation, founded or unfounded, undermine our professionalism - and with it the appeal of the APS as a place to work.

Claims of politicisation go back as far as Federation. The fundamental nature of government business has not really changed enormously, but the introduction of ministerial advisers, new relationships, advances in technology and mass media have generated new pressures to be responsive, and have, as Peter Shergold, the head of the Department of Prime Minister and Cabinet, has argued9, subjected us to much greater scrutiny than in the past. Regardless of the pressures that are brought to bear, we need to jealously defend our reputation as a professional and impartial public service.

Speaking about the British Civil Service, Sir Andrew Turnbull, the head of the Cabinet Office, noted that a risk for the civil service is the loss of its reputation for political impartiality and integrity. Civil servants, he says, "have always had to maintain a delicate balance between government and party - completely loyal to the first and neutral about the second" He notes, however, that the margin for error can at times be quite narrow10.

Presentation of a Minister's case, justifying a policy as being right in the circumstances and defending the policy against attack, he suggests, is only a narrow margin short of praise for the policy that could be seen to help build support for the approach of the party in power by comparison with the opposition.

The borderline between impartiality and overstepping the mark in the UK, as in Australia, is policed by the media, parliament, Ministers themselves and, perhaps most importantly, by the values and culture handed down through generations of civil servants.

What we have in the APS that the UK doesn't is legislated values. The APS values are both a point of reference on those occasions when the balance, say between responsive and apolitical, is a fine one - and they are also a known and accepted boundary marker, beyond which we cannot be required to go.

Our identity

I am proud to be part of the institution that is the Australian Public Service. It is:

We are all bound by a common ethos of public service.

We are part of an important national asset and make a significant contribution to the social and economic health of Australia - to the well being of individuals in the community.  

But, when I talk about public servants seeing themselves as part of an institution - not just of their agency - it is not just about feeling good about what we do in our patch of the APS - it's about how we work together, how we engage our employees and the public in what we do - whether we manage to deliver the sort of outcomes that are expected of us, and that we're capable of delivering.

What we do makes a difference to the social and economic health of the nation, and to the individuals who use government services.

The direction I intend to take as the APS Commissioner:

That brings me to the direction I intend to take as the Australian Public Service Commissioner.

I see the role of the Australian Public Service Commissioner to be:

What legacy do I want to leave when my term expires in 3 years? I hope that I will have made a contribution to restoring the status of the public service. I hope that people across agencies will have a common understanding of what binds them together as public servants. I hope that the Australian Government will be on top of the issues facing the public service and will have dealt with a number of them. Like Peter Shergold, I hope that our traditional values will be complimented by new qualities - courage of our convictions, creativity of spirit, commitment to action and collegiality of approach. I hope that the public service will have contributed to a whole new set of major policy reforms which will drive economic growth and social policies for the next decade or so. And, I hope that I will be able to stand before you and say, without fear of contradiction, that the Australian Public Service is the best in the world.

 

1 Matheson, Alex, in an unpublished paper, Modernising Government:the synthesis, p.3

2 Eggers, William, Government 2.0: Using technology to improve education, cut red tape, reduce gridlock, and enhance democracy, Rowan and Littlefield, New York, 2005.

3 Management Advisory Committee, Connecting Government: whole of government responses to Australia's priority challenges, Commonwealth of Australia, 2004, p. 164.

4 Secretaries' Group on Indigenous Affairs, Bulletin 01/2005

5 Corporate Leadership Council, Driving Employee Performance and Retention Through Engagement, 2004.

6 Cooper, Jo, 'Public Servants get some satisfaction' in Government News, March 2005, p. 12.

7 State of the Service Report 2003-04, p. 167.

8 State of the Service Report 2003-04, p. 137.

9 Shergold, Peter, Goodbye to all that power, Public Sector Informant, April 2005, p. 2.

10 Turnbull, Sir Andrew., Civil Service Reform: delivery and values (speech), March 2004.

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