Executive summary: 28 proposals for improvement

Last updated: 05 Feb 2016

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A. Providing Robust Advice

Ian Hanger AM QC

"The APS ought to reinvigorate its willingness to provide, in writing, advice that is as frank and robust as the advice it is willing to give verbally. . . What the process has revealed is a quite inadequate system of document management and record keeping."[2]

Good government is founded on good policy, and good policy depends on good advice. One of the Australian public Service's (APS) core roles is to provide advice to support the government of the day so that it can deliver its policy agendas and priorities. Senior public servants advise not only on the design, but on the delivery and evaluation of major programs and projects. They recognise that they should be held accountable to their ministers for the quality of advice that they provide. The APS holds a position of unique access to ministerial decision-making. It enjoys positional authority. Nevertheless, it must deliver well-argued and persuasive advice if it is to maintain influence with government. Counsel must be responsive and timely. It needs to acknowledge political direction. It must be strategic, providing a wider context for particular decisions. It must be frank and fearless.

Good advice is factually accurate and backed by evidence. It presents proposals based upon considered interpretation of alternative viewpoints and often reflects multiple perspectives. On occasion the APS appropriately provides a range of options to government, but it must not be afraid of taking a position on what is regarded as the best path forward. Fortitude is required. Sir Humphrey Appleby, in his inimitable style, would counsel against action by describing a proposed ministerial decision as 'courageous.' In truth, it is Secretaries who must be willing to exhibit courage.

Openness and transparency are fundamental to good government. There is room to further improve public access to information that is held by government. There is a strong public interest case for citizens being able to know the basis of decisions that affect their access to services. There is considerable value, too, in publishing as much publicly-collected data as possible and making it available to citizens to use and apply as they want through a 'Creative Commons' license. This is the basis on which this Review is released.

At the same time, it is imperative that governments be allowed a measure of confidentiality in the policy-making process. Without free and uninhibited exchange of views between ministers and senior public servants, good public policy is jeopardised. Policy debate depends upon mutual trust and respect between both sides. That depends on arguments taking place in private. Deliberations on matters of policy, whether oral or in writing, need to be kept in confidence.

Where there is a risk of advice being made public, sensitive topics are less likely to be the subject of full and frank written briefing. This increases the risk that decisions will be made on partial information, feebly presented. It means that there will be an incomplete record of the decision-making process. The Freedom of Information Act 1999 should be amended to provide an explicit exemption from release for information that would compromise the ability of public servants to provide ministers with frank advice. Such changes would apply to only a very small proportion of government information.

Advice on significant matters must be written down. There will rarely be a single document. The development of policy (as any good public servant knows) is an iterative process of argument, counter-argument, negotiation and compromise. Records of deliberative discussions in all forms, including emails and texts, should be retained.

CONCLUSIONS | Providing robust advice

A.1 Public service advice is vital to good government and, to this end, Secretaries should be held accountable for the quality of advice provided to ministers by their departments.

A.2 Whilst acknowledging the value of frank and fearless oral discussions, the Australian public Service Commissioner should issue a Direction that significant advice also be provided to ministers in writing. Ministers should insist on receiving frank written advice from the APS, noting that it is generally their decision whether to accept or reject all or part of the advice.

A.3 The Freedom of Information Act should be amended to ensure that advice and opinion provided to support the deliberative processes of government policy formulation remain confidential.

A.4 An APS-wide policy on record keeping should provide practical guidance about when and how records must be created, including that records of deliberative discussions in all forms, including digital, should be retained.

B. Supporting Decision Making

Ian Hanger AM QC

"Ministers and their advisors must not, by subtle suggestion or otherwise, dictate what advice they receive."[3]

Ministers operate in an environment of high pressure, fast pace, intense scrutiny and great complexity. They are responsible for making decisions—individually, and collectively as members of Cabinet—that have significant and far-reaching effects on individuals, businesses and communities. The importance of ministerial decision-making, and the circumstances under which it occurs, underscore the need to have well-functioning support systems in place for ministers.

Cabinet processes support government decision-making. When functioning properly they provide an important safeguard against rushed, uninformed or poorly conceived decisions. Individual ministers have ownership of the proposals that they bring to Cabinet. They need strong support both from their staffers (on the one hand) and their public service departments (on the other). Good working relationships between departments and advisers depend on unambiguous rules of engagement. Clarity on the responsibilities of each is critical to ensuring that ministers can do their jobs well.

C. Creating a Positive Risk Culture

Governments take risks for the good of the people of Australia. Delivering new policy initiatives—changing taxation structures, reforming the welfare payments regime, building public infrastructure or delivering major new programs—is necessarily perilous. Governments strategically intervene where there are perceived to be market failures, and invest taxpayers' money to drive outcomes that they believe the private sector is unwilling or ill-equipped to deliver.

Ian Hanger AM QC

"The identification and management of risks under the HIP was seriously deficient."[4]

The political risks of such activities will inevitably be at the forefront of a minister's mind: perhaps less obvious are the financial, operational and strategic risks. Yet no matter how brilliant the policy, and however clever its political goals, poor design and ineffective delivery will harm governments. Ministers need an APS that can help them identify their appetite for strategic risk, identify its characteristics and mitigate the possibility of failures.

On paper, the APS has significantly advanced its management of risk in recent years. The Public Governance, Performance and Accountability Act 2013 (PGPA Act) and associated Commonwealth Risk Management Policy have established an outcomes-based framework to integrate risk oversight and management activities within the core business of government. It needs to be implemented with vigour. Progress has been too slow. In the two years since the Act was passed, its underlying ethos of 'earned autonomy' is a long way from being realised.

Most public service agencies still have a way to go in moving from reactive, defensive risk management to proactive, performance-focused risk engagement. Too often there remains a tendency to focus on compliance (have payments to aged care providers been properly acquitted?) rather than on performance (is the aged care system providing options that result in better health outcomes, improve the quality of life of senior citizens and deliver greater consumer choice?). There remains too much focus on looking backwards, relying on evaluation and audit to identify problems after the event. There is not enough looking forward to prevent mistakes occurring.

The management of risk, whether of particular major projects and programs or across the entire government, needs to be improved. New organisational structures and workplace systems can contribute to this goal, but the major challenge is to embed new approaches within a strong risk culture. APS agencies continue to struggle to instil a risk culture and behaviours across their workforce so that every employee fully appreciates that they have a role to play in identifying and managing areas of uncertainty.

CONCLUSIONS | Creating a positive risk culture

C.9 To inform and improve policy design, departments and major agencies should gauge their ministers' appetites for risk on individual programs and across their portfolio, and reach agreement on how implementation challenges will be identified, accepted and managed within agreed resources.

C.10 Departments and major agencies should appoint a Chief Risk Officer, at a senior executive level, who will be responsible for embedding a strong risk culture and behaviours across all levels of the organisation.

C.11 All major Cabinet proposals should be supported by a minister's endorsed Risk Management Plan, submitted to PM&C and the Department of Finance, and available for perusal by other Cabinet ministers.

C.12 In order that governments remain aware of the cumulative impact of their decisions, the Department of Finance should facilitate a bi-annual whole-of-government Risk Assessment for the Cabinet, analysing the system-wide impact of operational, financial, strategic, legislative and procurement risks faced by government.

D. Enhancing Program Management

Program and project management are too often seen as control activities based on templates and Gantt charts. They are actually creative processes. In practice, they require a collaborative approach to aligning multiple delivery tasks to achieve agreed objectives in the most effective way, within time and budget constraints. They require discipline in maintaining single point accountability while being open and flexible to the opportunities of networked governance structures. That calls for professional expertise. The APS needs to build a stronger cohort of skilled and experienced program and project managers rather than relying on the 'accidental' practitioners who are often selected when no-one with greater ability is available. Some experts already work in the APS, but their experience and qualifications are still not sufficiently recognised and their professional status and career development rarely receive the attention they deserve.

Public servants need to value program management skills. APS recruitment practices should better recognise the strategic relationships between design, delivery and evaluation in order to promote more diverse experience among senior executives. Increasing core capability, mobilising expertise and valuing leadership in program and project management will strengthen the APS as an effective, professional and resilient institution that—supported as necessary by outside help—has the capacity to deliver the agenda of the government of the day.

CONCLUSIONS | Enhancing program management

D.13 The Australian Public Service Commission should work with industry associations to develop standards of proficiency for public sector project and program managers, with agencies committing to support these staff through career development opportunities, continued education and participation in professional communities of practice.

D.14 For all projects and programs, there needs to be a clear understanding about who accepts end-to-end responsibility for managing implementation, wields delegated authority and where accountability resides.

D.15 The APS should establish a 'tiger team' capacity by which service-wide expertise can be harnessed to assist Senior Responsible Officers in the management of high risk, large-scale projects.

D.16 Whilst acknowledging that different departments have different workforce needs, Senior Executive Service selection criteria should place greater emphasis on program leadership when considering a candidate's demonstrated breadth of experience.

E. Opening Up the APS

Ian Hanger AM QC

"Before Government intervenes in a market in which it has previously had almost no involvement, it needs first properly to understand the industry. . . [and] end users or deliverers."[5]

Private and public sector organisations around the world have come to recognise that diversity of perspectives in the workplace and the boardroom improves performance. Diversity increases critical analysis of information, results in better decision-making and challenges 'groupthink'. A mix of backgrounds, viewpoints and experience can, wielded together, generate more creative processes and better service. productivity is enhanced.[6]

The APS leads the private sector in the representation of women on boards and in senior executive roles.[7] It also maintains a commitment to the employment of Indigenous Australians, people with disabilities and those from non-English speaking backgrounds.[8] Whilst complacency must be resisted, this comparative advantage provides a positive foundation upon which to build. However, diversity cannot be created by demography alone. The challenge for the APS is that, for all its heterogeneity, it can remain inward-looking. It can become too comfortable with its own way of doing things. Diversity—in the sense of welcoming the views of the private and the community sectors—needs to be enhanced. The APS must open itself to a wider diversity of perspectives.

There is a need to build a more permeable public sector, providing greater opportunities for mobility within the APS, between jurisdictions and across sectors. People should be enabled to move in and out of the public service more easily. This will increase cross-sectoral collaboration in designing and delivering public policy, facilitate better partnerships and broaden the range of experiences that the public sector can call upon. For some people the APS will remain a lifetime career: for others, it will be a place to work temporarily on projects that capture their interest. The APS needs to be opened up.

CONCLUSIONS | Opening up the APS

E.17 Secretaries should support their staff to undertake career development opportunities outside the APS in order to gain beneficial experience.

E.18 Building on existing departmental initiatives, an Australian Public Service Scholarship should be established that provides financial support for ten APS leaders each year to undertake an important project in the business or community sector for up to 12 months.

E.19 A highly prestigious Public Sector Fellowship should be established to provide financial support each year for ten exceptional leaders from the business, community and academic sectors to contribute to significant initiatives in the APS for up to 12 months.

E.20 For high priority large-scale projects, departments should actively source specific talent from outside the APS on a temporary basis to provide a wide range of relevant skills, experience and entrepreneurial energy.

E.21 Program advisory groups should be established within departments that include representation drawn from outside the APS in order to capture a broader diversity of perspectives and knowledge.

E.22 A Prime Minister's Public Service Advisory Committee should be established that includes leaders from business and community organisations, to support the Australian Public Service Commissioner build a more open, collaborative and outward-looking public service.

F. Embracing Adaptive Government

The work of government is hard. Its challenges are wicked. Problems do not always have defined boundaries, solutions can (and should) be contested and authority is ambiguous. Political change can occur unexpectedly and at breakneck speed. Administrative change generally takes place in an almost imperceptible fashion but can be transformative in nature. These challenges are exacerbated by the rapidity and level of scrutiny that is now brought to bear by the 24-hour news cycle, the increasing influence of social media and the 'hyper- connectivity' of community networks enabled by the internet.[9] Both politicians and public servants must grapple with unrealistic citizen expectations and low levels of public trust.[10]

Ian Hanger AM QC

'"Nothing ever becomes real, as Keats said, "'til it is experienced".'[11]

The market is also becoming more competitive on a global scale. In response to the pace, complexity and connectedness of modern life, successful organisations are learning to function differently. Their operating environments are becoming increasingly unpredictable. Well-established companies suddenly find their business models undermined by emerging providers snapping at their heels. They discover that their customers are attracted by new services delivered in different ways. Companies rise to prominence quickly and amass great value rapidly—but many fail with equal speed. The organisations that thrive are flexible. They seize opportunities, learn rapidly and recognise that partners will be needed to deliver long-term goals. When they enter uncharted territory—or find themselves under threat from new forms of competition—they respond fast, start small, test new approaches, watch market responses, learn from doing, scale-up their activity or, if necessary, try again.

Most importantly, they are honest about failure. They recognise that mistakes happen, interrogate why they occurred and set in place remedial measures to ensure that they perform better next time. Failure and its lessons are an inevitable part of entrepreneurial life but are also central to maintaining the corporate competitiveness of well-established businesses. It is true as much for social enterprises as for companies. Competition for the philanthropic dollar is relentless.

The Australian Government can be informed by the organisational agility required for survival in the private and community sectors. It is true that the APS has a larger market than the vast majority of Australian companies and not-for-profit organisations and, for both better and worse, has been more protected from market pressures. That legislative and regulatory shelter is now under threat: citizens demand better services and greater choice and governments want more flexibility and higher productivity. Without abandoning the traditions of public service, new approaches need to be embraced that acknowledge that the delivery of government programs is increasingly contestable. These propositions can be usefully grouped under the conceptual framework of adaptive government.[12]

Adaptive government involves directing performance towards the achievement of outcomes in an increasingly competitive environment. To the extent that performance-based outcomes can be agreed and measured, the process allows contracted providers much greater flexibility in how they undertake delivery. This does not mean less oversight. Monitoring will still be required to assure not only that outcomes are being achieved, but that the process by which they are pursued has the integrity and accountability that public spending demands. Nevertheless, done properly, there will be less need for prescriptive red tape.

Adaptive government calls for greater organisational flexibility. It demands more willingness to experiment—starting small, testing what works and (in the worst case) failing quickly. It is premised upon facilitative leadership, in which collaborative partnerships are formed with others to deliver results. It requires much more agility than the traditional structures and workforce systems of public administration allow. It demands whole-hearted acceptance of the virtual world by which government can better engage with citizens.

Some of this is already happening in pockets of the APS. Such initiatives need to be embraced with greater enthusiasm. An adaptive approach has the potential to create momentous change in the effectiveness of public service. It can help to restore confidence that governments can meet the expectations of their citizens. 'One APS' needs to reimagine itself as an adaptive organisation—flexible, experimental, facilitative and agile.

CONCLUSIONS | Embracing adaptive government

F.23 The default position that new policies proceed straight to large-scale roll-out should be reversed and instead new policy proposals should include a trial or demonstration stage, allowing new approaches to be developed fast and evaluated early.

F.24 Staged decision-making for large projects should incorporate the allocation of seed funding to agencies to develop a business case and proof-of-concept, which can be tested before the project moves to a further stage.

F.25 The Australian Government should fund an innovation competition to encourage experimental, innovative community and business proposals for improving the delivery of programs and services.

F.26 In order to improve contestability and citizen choice, departments should facilitate the ability of contracted providers to take their own approaches to the delivery of agreed performance-based outcomes.

F.27 As part of continuing effort to reduce red tape, greater efforts need to be made to engage with communities and businesses to understand how contractual conditions and administrative guidelines can be less prescriptive, making it easier to work with government.

F.28 The APS should promote new forms of civil participation, including digital and deliberative democracy techniques, in order to enhance consumer-directed care, improve customer service, encourage greater citizen engagement and inform the public economy.


Notes

[2] Hanger, I 2014, pp. 307, 317.

[3] Hanger, I 2014, p. 308.

[4] Hanger, I 2014, p. 308.

[5] Hanger, I 2014, p. 311.

[6] Dhir, A 2015, Challenging boardroom homogeneity: corporate law, governance and diversity, Cambridge University Press; Forbes Insights 2011, 'Global diversity and inclusion: fostering innovation through a diverse workforce', <http://images.forbes.com/forbesinsights/StudyPDFs/Innovation_Through_Diversity.pdf>; Russel Reynolds Associates 2014, 'Interviews and findings, different is better: why diversity matters in the boardroom', <http://www.russellreynolds.com/content/different-better>

[7] In 2012, 39.37 per cent of the SES were women as compared to only 10.7 per cent of Top 200 ASX Executive Managers. According to AICD data as at 31 March 2015, the percentage of women on ASX 200 boards was just 20 per cent, whereas as at 30 June 2014 women held 39.7 per cent of Australian government board positions. Australian Public Service Commission, 2013—14 State of the Service report, Chapter 5, Senior Women in the APS, <http://www.apsc.gov.au/about-the-apsc/parliamentary/state-of-the-service/state-of-the-service-2013-14/sosr-2013-14/theme-two-effectiveness/chapter-5/senior-leadership-in-the-aps> Australian Institute of Company Directors (2014), Appointments to S&P/ASX 200 Boards, Statistics, Director Resource Centre, <http://www.companydirectors.com.au.>

[8] Employment of individuals from Indigenous and non-English speaking backgrounds remained steady between 2013 and 2014 (2.4 per cent and 15.5 percent of total employment, respectively). In 2014, 84 per cent of all APS employees were covered by a workplace diversity programme and 89 per cent of APS employees were covered by a formal strategy for the engagement and accommodation of individuals with disabilities. Australian Public Service Commission, State of the Service Report 2013-14: Appendix 5, Diversity, <http://www.apsc.gov.au/about-the-apsc/parliamentary/state-of-the-service/state-of-the-service-2013-14/appendices/diversity>

[9] The Organisation for Economic Cooperation and Development 2015, Achieving public sector agility at times of fiscal consolidation, OECD Public Governance Reviews, OECD Publishing, p. 16,<http://dx.doi.org/10.1787/9789264206267-en>

[10] For the first time in 2014, the number of Australians who trust government has fallen below 50 per cent, as have the number who trust business, Edelamn 2015, 'Edelman TrustBarometer',<http://www.edelman.com/2015-edelman-trust-barometer/>

[11] Hanger, I 2014, p. 300.

[12] The concept of adaptation has been used as the basis for a variety of approaches in different contexts. For example, 'adaptive management' is used in environmental resource management, 'adaptive development' is used in the aid literature, 'complex adaptive systems' is used by complexity science and 'adaptive leadership' is used in human resources literature. Adaptive government draws on many of the same foundational concepts but applies them specifically to the government context.