In his 1996 discussion paper on best practice in the Australian public service, Minister Reith had argued that, in making devolution work,
One inhibitor is the centre. It survives still. Central agencies must learn to ‘let go’ in practice as well as theory. Standards must be maintained, service-wide policies implemented, advice provided and best practice promoted. But the culture must be one of facilitation not regulation.[57]
While departmental secretaries subsequently agreed that devolution had enabled them ‘to align their staffing, administrative resources and assets to the objectives government has set them’, they have also agreed that it has not always been good for the responsiveness of the system as a whole. ‘There is some risk,’ they have acknowledged, ‘that devolution of authority to agency heads and a clear vertical accountability for agency outcomes may make collaboration across organisational boundaries more difficult.’[58] The problem at an operational level was succinctly put by a respondent to the 2004–05 State of the Service Employee Survey, commenting on inter-agency communication:
Oral communication is just proving to be adequate but written is poor (as it appears staff do not want to be recorded as having provided information or advice to another agency). The motivation appears to be a growing concern that staff will be held accountable (i.e. punished) for having consulted/assisted on a matter that may result in an outcome that does not accord with what could be anticipated may be their own Minister’s preferred position. This means misinformation is being provided (or poorly articulated positions are being put) to Government as part of the deliberative process.[59]
In terms of the implementation process, coordinated service delivery was recognised by secretaries to be an organisational boundary issue, together with Indigenous support, national security, environmental management and drug abuse issues. There was concern that public servants at all levels, motivated by what one agency celebrated as the ‘will to win’[60], were acculturated to looking vertically up lines of accountability to their ministers but not horizontally across them to each other. The old central agencies in particular were proposing, but line agencies were not disposing, or at least not with sufficient gusto. ‘Political control and performance issues’[61] were emerging within the highly devolved framework, and the Government was becoming ‘concern[ed] that political priorities were not being sufficiently reflected in policy directions, and were not being followed through in program implementation and delivery’.[62]
Accordingly, while citing ‘considerable evidence’ of the positive impact of devolution on agency productivity,[63] secretaries identified the need to improve collaboration across organisational boundaries. They issued guidance for whole-of-government cooperation and put in place mechanisms for ‘connecting government’.[64] But despite the rhetorical enthusiasm, the relevant guidance stipulated that horizontal collaboration was to occur ‘while maintaining vertical accountability’.[65] The top-down drivers of bottom-up responsiveness were not to be substantially changed: ‘[m]arket testing, outsourcing, organisational devolution and performance management have become central parts of public service working life’ and were to remain in place.[66] Instead, (re)centralisation was pursued in a way that had the effect of reinforcing rather than offsetting the vertical accountabilities put in place through devolution. One of the principal vehicles for this recentralising was the Government’s response to the Uhrig Report:
The report was undertaken after extensive lobbying by the business sector and was prepared by businessman John Uhrig who, at the time of the Inquiry, was chair of the mining giant Santos Ltd. After a largely internal review process, he handed down a report containing recommendations that, according to Wettenhall, ‘were in line with, and helped give form to, the Howard Government’s own thinking.’ That thinking was based on the notion that ministers should have complete control over the activities of public agencies unless those agencies are engaged in a commercial operation or there is some other exceptional circumstance warranting independence.[67]
The structural changes undertaken following the Uhrig Report simply buttress top-down controls. Six delivery agencies were been brought together and put under departmental oversight, including Centrelink and the Health Insurance Commission, whose governance boards were abolished and replaced by an executive management structure ‘to establish a more direct Ministerial role in their operation’.[68] A further five agencies that were once statutorily independent—the Australian National Training Authority (ANTA), National Occupational Health and Safety Commission (NOHSC), National Oceans Office (NOO), Australian Greenhouse Office (AGO) and the Australian Government Information Management Office (AGIMO)—were moved back into departments. According to the then Secretary of the Department of the Prime Minister and Cabinet, it ‘is a process designed to clarify the lines of authority, to establish responsibility for decision making and to enhance Ministerial (and Secretarial) accountability’.[69] It is also a process that reflects the Prime Minister’s view, communicated to his ministers, that they should be ‘conscious of the extent to which the establishment of these bodies limits the government’s own sphere of control and constrains the options available to them’.[70]
Statutory authorities that were not moved back into departments were required to work through portfolio secretaries rather than directly to ministers. Other changes, now subject to reversal by the Rudd Government, included the selective shortening of contracts for heads of statutory authorities from five to two or three years (not a Uhrig proposal), and the vetting of all senior appointments to public agencies directly by the Prime Minister’s Office.[71] Advisory boards and committees were streamlined, also with the effect of ‘enhanc[ing] Ministerial (and Secretarial) accountability’, most famously by the removal of the employee representative on the ABC Board and the replacement of the entire board of the Australian Research Council by an advisory committee with no decision-making power—also under the aegis of Uhrig:
Replacing the board with a chief executive who reports directly to the minister will, Dr Nelson says, expedite funding and increase certainty. So why aren't the beneficiaries cheering? Universities see the minister's words as euphemisms for one word: control.
The ARC shake-up is one of the first outcomes of a review of corporate governance of 170 statutory authorities by businessman John Uhrig. He offered another option, enabling the ARC board to finalise grants without ministerial approval, a move that would speed up the grants process. Only one option increased ministerial power.
… If there is a conflict between political and academic agendas—between, say, research into renewable energy or the fossil fuel technology favoured by Government energy policy—it's not hard to guess which is now more likely to win funding.[72]
It would appear that the prediction that ‘the devolved model is unlikely to survive faddish inclinations once active political executives become disabused of ideological fixations’[73] has been working itself out. Active political executives do not like giving away control, even in the interests of pursuing a market model. In the Coalition’s Indigenous Coordination Centres, for example, those doing the coordinating of Indigenous health, housing and employment services remained responsible, respectively, to the heads of the health, housing, and employment agencies.
The response to the loss of connective tissue in the public service brought about by devolution has been to strengthen top-down policy controls over policy development and implementation by increasing the power of central agencies. Government ‘concern that political priorities were not being sufficiently reflected in policy directions, and were not being followed through in program implementation and delivery’ noted above, was addressed by new whole of government mechanisms noted above and by the creation of the Cabinet Implementation Unit in the Department of the Prime Minister and Cabinet. This body enables the Prime Minister to look over the shoulders of his portfolio ministers while they are looking over the shoulders of their agency heads while they drive agency performance. Both the new whole of government mechanisms and the Uhrig changes were part of the broader ‘reinforcement of and significant extension to vertical relationships’ brought to bear through a series of structural adjustments summarised by Halligan as:
resurrection of the central agency as a major actor and of control over departments;
whole-of-government as the current expression of a range of forms [of] coordination;
central monitoring of agency implementation and delivery; and
control of non-departmental bodies by departmentalisation (absorbing statutory authorities) and reclaiming control of agencies with hybrid boards to accord with corporate governance prescriptions.[74]
The result is ‘more political instruments for securing and sustaining control and direction … a brace of instruments for working the system strategically and at several levels’.[75] Because of the form it has taken in the Australian political and institutional context, devolution has enabled the government to increase its control over increasingly isolated public servants in increasingly isolated agency-businesses to exact ever higher levels of responsiveness. This means that when it wants it can require agencies to work together to deliver centrally orchestrated policy making involving coordinated responses. It also means, conversely, that at all other times there may be a presumption in favour of their not interacting effectively when, as in the case of Children Overboard or DFAT’s oversight of AWB, it is necessary that ‘mandarins and their masters manage … to miss what is going on’.[76]
[57] Reith, Towards a Best Practice Australian Public Service, 21.
[58] Management Advisory Committee, Connecting Government: Whole of Government Responses to Australia’s Priority Challenges (Canberra, 2004), 6.
[59] Public Service Commissioner, 2004–05 State of the Service Report, 283.
[60] Department of Finance and Administration, Annual Report 1999–2000 (Canberra, 2000), 59, at http://www.finance.gov.au/pubs/AnnualReport99-00/pdfs_word/completereport/Annualreport.pdf, viewed 29 June 2007. See also O’Donnell and Shields, ‘Performance Management’, 449: ‘Such competition for visibility and performance ratings can also lead to a form of dysfunctional individualism where employees refuse to share valuable information. In the case of DOFA [Finance], there were concerns that some employees were hoarding their knowledge.’
[61] Halligan, ‘Integrated Performance Model’, 1. See also Peter Shergold, 'Plan and Deliver: Avoiding Bureaucratic Hold-up', speech to the Australian Graduate School of Management/Harvard Club of Australia, 17 Nov. 2004, National Press Club, at http://www.dpmc.gov.au/ speeches/shergold/plan_and_deliver_2004-11-17.cfm,viewed 27 June 2006.
[62] Halligan, ‘Integrated Performance Model’, 7.
[63] Management Advisory Committee, Connecting Government, 6.
[64] See Management Advisory Committee, Connecting Government: Good Practice Guides, at http://www.connected.gov.au/home, viewed 3 Sept. 2006.
[65] Management Advisory Committee, Connecting Government, 15.
[66] Shergold, ‘Regeneration’.
[67] Andrew Macintosh, ‘Statutory Authorities’, in Hamilton and Maddison, Silencing Dissent, 152.
[68] Public Service Commissioner, 2004–05 State of the Service Report, 274.
[69] Shergold, ‘Regeneration’.
[70] Letter from the Prime Minister dated 29 Nov. 1996, leaked to the media in early 1997, and quoted by Macintosh, ‘Statutory Authorities’, 154.
[71] Ibid. 152.
[72] Editorial, The Age, 20 July 2005, at http://www.theage.com.au/news/editorial/ nelson-calls-the-research-tune/2005/07/19/1121538971011.htm, viewed 3 Sept. 2006. A detailed account of this process is set out in Stuart Macintyre, ‘Universities’, in Hamilton and Maddison, Silencing Dissent, 41–8, 56.
[73] Halligan, ‘Integrated Performance Model’, 3.
[74] Ibid. 7–8.
[75] Ibid. 17.
[76] Editorial, ‘Time to Account for AWB Scandal’, Weekend Australian, 30 Sept.–1 Oct. 2006, p. 18.