Table of Contents
This chapter reviews lessons from the Centrelink experience, which together span a significant range of questions about public management. Three themes permeate the discussion.
At one level, there are questions about designing the delivery of services that might best relate to particular types of agency. There are issues about Centrelink’s organisational form and, as a solution to design questions, about how responsibilities are assigned and relationships between organisations determined.
Second, there are durable questions of public administration concerning governance, relationships among agencies, external relationships with society and the organisation of policy and implementation. The questions about delivery systems, organisational change and performance have been redefined in terms of customer focus and relationships and the role and significance of entrepreneurship and leadership in the external positioning of the organisation and the internal implementation of change.
Third, the role of the management and policy environments interacting with and influencing organisational change is identified because of the need to constantly respond to various agendas. The question of organisational positioning is conceived in terms of relations with the main stakeholders—client departments, the government and customers—and with regard to actively seeking an identity as a service delivery agency. In this, the role of entrepreneurial advocacy is important in an ambiguous environment with conflicting expectations for building support and legitimacy (Moore 1995).
Centrelink as a horizontally constituted delivery agency operating through distinctive relationships with departments is interesting in Australian terms and internationally because it brings to the fore departures from conventional bureaucracy, the value of the agency model and the organisational distinctiveness of Centrelink.
How is it valued by government?
Centrelink was a product of the mid-1990s and a combination of personalities, agendas and opportunities associated with the election of a new government committed to reform and savings. Existing policy options were cemented as a solution was sought for the problem of departments confronting a reformist government. The essence of the problem was summarised by Rowlands (2003:203–4) as being about rationalisation and cost:
[The] CES was seen by senior managers as moribund, a new government needed APS staff savings and the Department of Finance had long sought to have the two regional networks amalgamated: the alignment of these three factors alone meant that the change was inevitable…Achieving amalgamation of the CES with the DSS network was a major prize for Finance.
The relevant secretaries, Blunn and Hollway, engaged in pre-emptive action to meet the new government’s expectations for staff savings in the Public Service for which the integration of two regional networks provided a solution.
The end was more obvious than the means. The second question was how to achieve these objectives in terms acceptable to the key bureaucratic actors, and again Rowlands (2003:205) captures the situation succinctly:
[N]either DSS nor DEETYA would be ‘taken over’ by the other and both would have a seat at the Centrelink board. Finance could readily recognise and support the purchaser–provider model. [The] strategy yielded savings for the new government in a way that accorded with Finance views about how government should be organised.
Further, the scheme could be seen as ‘a new step in APS reform’ that also had a ‘positive aspect rather than risk being seen primarily in terms of staff savings’ (Rowlands 2003:205).
Out of the convergence came first an organisation that was different from the standard international experiments with new-style executive agencies: a delivery model with organisational distinctiveness and agency features. The legacy of this convergence of mutual interests and the basis for the continuing debates about the responsibilities of purchasing departments and their delivery agency were a result of combining several models in Centrelink’s modus operandi (Halligan 2004). The resultant issues appear at different points in this chapter.
It is worth noting the culture of the environment into which Centrelink emerged. The enterprise had to confront a range of potentially unrealistic expectations in a sympathetic but also potentially inhospitable environment. There was strong political support from Jocelyn Newman while she was the minister. At the bureaucratic level, DoFA was sold on the concept of one delivery system rather than two and the incorporation of purchaser–provider principles echoing the neo-liberal ideas then in circulation. Client departments, however, were still operating within the old school that had yet to come to terms with the agency concept, and the small policy department was anathema and difficult to comprehend for those socialised in the art of running a traditional ministerial department. These factors provided the impetus for the bureaucratic politics that followed the entrance of an interloper. In other countries—Britain and New Zealand—the distinction between policy ministries and delivery agencies was generally applied, whereas Centrelink was the Australian exception. Despite the scale of its operation, which was based on work previously undertaken by departments, it was not accepted as a member of the departmental club.
As the remainder of the chapter indicates, however, the Centrelink concept of an agency has not only survived for 11 years, it has provided a range of insights about operating a large public organisation.
The environment reflected a government reform agenda that was neo-liberal in character and market and private-sector focused, which, with specific policy agendas, imposed multiple disciplines on Centrelink. There were also constraints resulting from the ambiguity underlying the Centrelink concept and the potential conflicts among the different imperatives and stakeholders, discussed later. Such obstacles need not prevent the generation of opportunities if an agency can take advantage of its other attributes. Opportunities could be turned to advantage through advocacy and smart practices.
The new entrant had to define a role within the APS that had hitherto been centred primarily on ministerial departments, often with their own delivery capacity. As a large agency with the capacity to take policy initiatives, Centrelink was a challenge to policy-focused departments, which had experienced a contraction of their responsibilities. In terms of the positioning and legitimising of the agency, the core agenda was evolving the service delivery system, consolidating, protecting and enhancing the concept of the one-stop shop and expanding business through agreements with new clients.
In positioning itself, Centrelink sought to be entrepreneurial within the terms of its original mandate to become a one-stop shop. There are two strands to this question: being in a contestable position for core business and competing for business. A related issue was whether Centrelink was the Commonwealth delivery agency and should have comprehensive responsibilities for multiple delivery arrangements.
The original mandate was to provide services to purchasing departments in the areas of social security and unemployment, but Centrelink’s character provided other bases on which to position itself within the Public Service. The positions advocated covered the one-stop shop, provider of choice and premier broker for the Commonwealth, the gateway for electronic communications and inclusive service delivery.
The advocacy of Centrelink’s position was important for defining roles and registering its place. Several themes consistently promoted were: the holistic conception of the individual and how the service delivery agency should respond; intra-agency integration of responsibilities and the one-stop shop concept; dealing with numerous clients simultaneously; competing for work; pushing relevant policy agendas as a delivery agency; and provision of choice through channel management. Much depended on Centrelink’s capacity to define long-term objectives and to move towards achieving them (Vardon 2003c).
Positioning is ultimately about the question of organisational survival, growth and adaptation. Centrelink managed to reflect the tenor of the time: reading and adapting to the general government agendas and projecting its relevance to the contemporary philosophy. In Centrelink’s early years, the mantra of competition and choice reigned supreme for the government, and Centrelink’s stance reflected this. For a time, there was a fixation on growing and performing because alternative public and private delivery options were perceived to exist as potential competitors for Centrelink’s core business, and this had obvious implications for the agency’s survival.
There was something of a turning point about the turn of the century when limits to fulfilling a comprehensive vision emerged from decision making within the executive branch. As the fashion moved from markets towards partnering, governance and whole of government, Centrelink, as a horizontally constituted agency, was again seeking new relations (for example, with communities) and to lead on associated agendas. There was a sense of evolution with time beyond advocacy of a distinctive position towards a significant role in setting policy agendas. Centrelink’s relationships with agencies evolved towards a reciprocal collaboration of the type of capacity envisaged by Bardach (1998). At the same time, Centrelink’s smart practices were in step with the broader reform agenda: policy competition in a period of marketplace analogies, cooperative alliances in a period of whole of government in the 2000s.
Centrelink was able to adapt its approach to reflect policy directives and trends as they applied to delivery and at the inter-agency level, but it was not in a position to handle the changing broader reform agenda and the overall functioning of the public sector as new public management was subsumed and supplanted by integrated governance (Halligan 2006a).
Four dimensions were emerging in Australia’s public administration in 2003, each embodying a relationship and designed to draw together fundamental aspects of governance: resurrection of the central agency as a major actor with more direct influence over departments; whole of government as the new expression of a range of forms of horizontal coordination; central monitoring of agency implementation and delivery; and departmentalisation through absorbing statutory authorities and rationalising the non-departmental sector. In combination, these dimensions provided the basis for integrated governance and addressing performance improvement (Halligan 2006a).[1]
The integrating-governance model has parallels in other anglophone systems that were once exemplars of new public management, with broadly similar movements reflecting a desire to review and tighten oversight through restructuring and rationalising public bodies. There were parallels in Britain, where the themes of coordination and integration were apparent under Tony Blair and ‘re-aggregation’ was prevalent by the mid-2000s as the reversal of agencification reached an advanced stage (Bogdanor 2005; Talbot and Johnson 2007).[2]
The Australian trends shifted the focus to some extent from vertical to horizontal by emphasising cross-agency programs and collaborative relationships, but vertical relationships also received reinforcement. The whole-of-government agenda had a centralising element in so far as central agencies, particularly the Department of the Prime Minister and Cabinet, were driving policy directions systemically and across the Public Service. The result was the tempering of devolution through strategic steering and management from the centre and a rebalancing of the positions of central and line agencies. Underlying the model was political control through strategic coordination under cabinet, control of major policy agendas, organisational integration and monitoring implementation of government policy down to the delivery level. The overall result was greater policy and program control and integration using the conventional machinery of prime minister and cabinet, central agencies and departments.
The agenda for resurrecting the comprehensive ministerial department was given formal recognition through the Uhrig review into the corporate governance of statutory authorities and office holders. The focus was on nominated agencies with relationships with and impacts on business, particularly in regulation and taxation, but also including the delivery agencies of the Health Insurance Commission and Centrelink. The Uhrig report (2003) was grounded in private sector experience and offered two alternatives: a board template with full powers delegated by the government and an executive management template. Many public bodies did not readily fit either (Halligan 2006a; Halligan and Horrigan 2006).
The post-Uhrig agenda has been for ministerial departments to have tighter and more direct control over public agencies. This in part was a move against the ‘dangers imposed by bureaucratic proliferation’ (Shergold 2004) with most public servants working for agencies, many with statutory independence, whereas departments of state employed only 22 per cent of the APS. The head of the Public Service registered concern about opaque governance. ‘If implementation is to be driven hard it is important that there be clarity of purpose, powers and relationships between Ministers, public servants and boards. Good governance depends upon transparency of authority, accountability and disclosure. There should be no doubts, no ambiguities’ (Shergold 2004).
Departmentalisation, then, was encouraged as an option for absorbing statutory authorities and reclaiming control of agencies with hybrid boards that did not accord with corporate governance prescriptions. The most significant was the creation of a Department of Human Services as a small agency for strategically directing, coordinating and brokering improvements to the delivery of services and incorporating six agencies, including Centrelink, under its umbrella. Centrelink was then subsumed within a new parent department and portfolio in late 2004, before which CEO Vardon departed for a state government position. The aftermath is discussed in the concluding chapter.
The effect of integrated governance on Centrelink was substantial because all dimensions had an impact: the relationship to ministerial direction, stronger ministerial departments in relation to policy leadership and control over public bodies, enhanced central agency capacity for monitoring service delivery and implementation and the clarification of what constituted appropriate corporate governance (thereby striking out Centrelink’s executive board). The whole-of-government agenda meant that Centrelink was no longer the distinguished innovator in horizontal initiatives because all agencies were now expected to participate actively in collaboration.
Two agendas, then, were operating: one addressed agency governance and ministerial accountability and the need to rebalance the Public Service by tempering the high levels of devolution, including the number of non-departmental organisations (Halligan and Adams 2004). There were also Centrelink-specific matters that addressed issues arising from conflicts identified earlier, such as the operation of a purchaser–provider relationship within the same portfolio, governance by board and minister and inter-departmental tensions.
[1] The reasons for the shift from new public management are complex and involve internal (for example, shortcomings of reform initiatives) and external (for example, environmental threat from terrorism) factors (Halligan 2007a).
[2] New Zealand displays similar dimensions to Australia, including rationalising governance of non-departmental organisations (Boston and Eichbaum 2007).