Table of Contents
Centrelink has attracted more sustained public attention and scrutiny (including international attention, for example, Husock and Scott 1999a; Smullen 2007)[1] than most other public organisations in recent Australian history. For the customer, it dispenses a wide range of welfare services and payments. For the government and taxpayer, it reflects a new style of organisation that emerged in the 1990s in Australia and overseas. At the same time, it differs from traditional bureaucracy and ‘new-style agencies’ that have become fashionable overseas because of its multifunctionality and the breadth of its role within the public sector.
The relevance of this experiment, nationally and internationally, arises from many of the core questions of contemporary public management. These include integrated service delivery, special agency and governance arrangements, measuring performance and the capacity for businesslike operations despite being close to the heart of government.
This study examines Centrelink as it emerged and underwent extensive change, seeking to build a management capacity by positioning itself and interacting with organisations in its complex environment, and aligning management systems in support of its objectives. This introduction locates Centrelink within the context of major questions[2] in comparative public management, the challenges of an organisation driven by several imperatives and the type of analysis proposed for studying a service delivery agency.
Four themes stand out in this study of public management change. The first is the departure from the conventional bureaucracy as expressed through the agency approach and more generally the organisational distinctiveness of Centrelink. The second is the relationship between the external demands and constraints on Centrelink and its claims as an entrepreneurial organisation. The public governance and policy environment shapes agency operations but questions arise as to what scope there is for the organisation to address positioning and advocacy within this external environment. The third theme concerns the development of a service delivery model and the implementation and alignment of the management systems within the agency to support this model. Fourth is the nature of transformation in a large and complex organisation that has sought extensive change under its first CEO as the means to improve service delivery in response to the imperatives outlined in the models that underlie the Centrelink concept.
The reform context in which Centrelink emerged and evolved allowed an innovative new agency to emerge, but the changing agenda of government ultimately dictated that a more conventional type of agency was wanted.
Three questions arise out of the first theme—departures from conventional bureaucracy and organisational distinctiveness. The first question involves the implications of this fundamental shift from the traditional Australian model—in particular, the agency concept, separation of policy and delivery and the particular use of the agency form. The second question asks how distinctive Centrelink is and whether a new model is emerging here. The third question relates to the implications for how the organisation operates.
The traditional public service was characterised by a public administration paradigm, based on bureaucracy, hierarchy and process and centred on the multipurpose ministerial department. The focus was on vertical arrangements within monolithic departments operating their own delivery networks and subject directly to ministers (for an elaboration, see Hughes 2003; O’Faircheallaigh et al. 1999).[3]
Institutional economics and public choice gave rise to alternative conceptions, which addressed, inter alia, the questions of agency and transaction costs. From principal/agency theory comes a focus on the relationship between the purchaser and the provider. The separation of responsibilities should occur when there are conflicts (for example, commercial and non-commercial) and when different functions are involved (for example, purchaser and provider).
The separation of policy and operations raises an old question that has taken a variety of forms. One argument is about the need for separating roles organisationally in order to provide a functional focus. The concept of identifying a single function with one organisation became the orthodoxy in some countries (Pollitt and Talbot 2004; Pollitt and Talbot et al. 2004). According to this view, policy development, implementation and regulation should be the responsibilities of different organisations. There is also a long tradition of using special organisational forms for achieving different operating environments for specific activities (for example, statutory corporations and public enterprises). This principle has been revived and extended as a means of exacting demands on public organisations—to focus them on results and performance and to cultivate a business style.
These new-style agencies—leaving aside questions about how new they are (Talbot 2004; Wettenhall 2003)—encompass structural disaggregation, performance contracting and deregulation of management controls (Halligan 1998; Rowlands 2003; Talbot 2004). Centrelink has reflected these elements as a specialised delivery agency constituted on the basis of purchaser–provider principles, performance expectations and scope for operating outside conventional bureaucratic practice.
The Centrelink experiment departed significantly from the agency model in three respects. First, there was the combination of scale and the multi-jurisdictional basis of its operation. In addition to distributing close to one-third of the Commonwealth budget outlays, it has delivered services for a range of departments and all states and territories. Second, it has been an important deliverer of integrated public services. Centrelink was created as a ‘one-stop shop’ or ‘first-stop shop’ for government services with the raison d’être of linking services for the citizen. Third, there was the capacity to operate entrepreneurially. As well, Centrelink has shared features with agencies internationally—for example, in operating as a government agency under special governance principles.
There is also the question of its operation (as opposed to its conception). The organisation evolved rapidly, seeking to define and reinvent its approach during its first eight years. Centrelink was also under pressure to adjust constantly to a changing environment. Originally envisaged as an organisation that was on notice to perform,[4] Centrelink had to address how to ensure that it was a sustainable enterprise (Vardon 1998a).
[1] For references to Centrelink as a case of integrated service delivery, see Kernaghan (2005) and WBI Leadership Development Program and IPAC (2007).
[2] The original questions are in Appendix 1.
[3] The pragmatism inherent in the British tradition encouraged statutory authorities to flourish at times as specific solutions to problems.
[4] Of course, no conventional department can expect to be immune from changes by the government, but in Centrelink’s case it was advised of the need to perform in order to retain functions, and there was a sense that its very existence was not guaranteed.