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Go global: Public sector management trends in Australia, New Zealand, the United Kingdom, Canada and the USA

Opening Keynote Address
CPA Australia Congress
Tuesday 16 September 2003

A. S. Podger
Public Service Commissioner

* I am grateful to Derek Drinkwater for his assistance in preparation of this paper. This paper includes some detailed material not used in the spoken version.

Introduction

It is a privilege to speak to the CPA Australia Congress. The CPA has for many years worked closely with the Commonwealth Government to assist us in financial management reform, supporting networks of Chief Financial Officers and hosting many forums, and undertaking important studies on risk management and financial management benchmarking.

When I last spoke to a CPA Conference in 1999, it was to comment on an excellent but controversial paper by Professor Guthrie and Tyrone Carlin criticising the application of accrual accounting in the Commonwealth budget process. I found myself sympathising with many of the points made, while attempting to defend the framework the Government had introduced. Managing such dilemmas is not unusual for public servants, of course.

In doing so I also enjoyed referring to an important long debate in public administration: between the rationalists who focus on results and the theoretically best way to achieve them, and the incrementalists concerned more about marginal improvements that can be agreed upon in practice. As I explained, the rationalists won the debate as can be seen, for example, by the outcomes/outputs budget framework we have in place, but I took some comfort that the change occurred incrementally through a series of marginal improvements over 25 years.

I intend today to talk more broadly about public service management, highlighting the major shifts that have taken place across many nations-with a particular focus on Australia, New Zealand, the United Kingdom and Canada, and some references also to the United States. As I do so, I want to remind you of a number of traditional issues and debates in public administration, and how these continue to challenge us. There is in fact an art to managing these traditional dilemmas, or 'dualities', and a danger if ever we think we can pursue one objective or direction at the expense of totally ignoring the competing consideration.

I should also emphasise an important caveat to any international comparison. Understanding any country's approach to public administration requires appreciation of the institutional, social and cultural context, and of history. A useful expression of this caveat, that was continually emphasised at an international forum on health that I regularly attended over the last 5 or 6 years, was that 'to learn from, you must first learn about'.

The International Context

I would like to begin by surveying briefly the international background to the radical reshaping of public administration that has been taking place. Late last century, there occurred what one commentator has termed 'a major reconceptualisation of the role of government' in comparison with what had gone before. (Nethercote 2003: 12) The Australian experience has been set out in some detail in a Commission publication released a few months ago (The Australian Experience of Public Sector Reform, APSC, Canberra, 2003).

A number of forces lie behind this reshaping:

These forces already lay behind the three themes that emerged from the Coombs Royal Commission into Australian Public Administration over 25 years ago:

The forces have strengthened over the last quarter of a century, ensuring that Coombs' three themes have remained central to public sector reform in this country and elsewhere.

It is important to also identify forces that have always affected public administration:

The common response to these global pressures, including increased competition and increased change, has everywhere emphasised flexibility and agility. Common themes have been:

These themes lie behind what has become known as the 'New Public Management' (NPM).

Many academic commentators have observed this movement. Martin Albrow talks about 'reinvention of government', whereby 'the central strategic task of governance', is to clarify societal purposes and organise accordingly. (Albrow 2001: 158, 162) In contrast to the traditional, 'procedural' public service model whose principal hallmarks still largely resemble those of the nineteenth century British civil service, there has developed what Professor Mark Considine and Jenny Lewis describe as a model of 'enterprise governance', in effect, 'a new hybrid orientation based on selected corporate and market norms'. (Considine and Lewis 2003: 131, 139) New Public Management gets repeated mentions in Guy Peters and Jon Pierre's compendium of international papers, Handbook of Public Administration (2003), with its strong emphasis on results, as well as the use of markets and business approaches.

These developments are evident in each of these five countries. There is also increasing interest across all OECD nations and indeed, wider usage of NPM techniques through active promotion by international agencies such as the World Bank.

Australian experience is evolving steadily. Important developments, building on the reforms of the 1980s and early 1990s, have been:

Some of these developments may be seen as extensions of NPM, others as a reassessment of those fundamental balances in public administration I referred to earlier, including between devolution and central control and between horizontal and vertical management, along with a confirmation of the underlying roles of government.

An important aspect of the changes we have seen in the last 20 years is the challenge for public servants, summed up in a recent Audit Commission report from Britain:

The traditional view of the public sector ethos emphasises service, duty and obligation, rather than financial viability, profit or shareholder value. There is potential here for learning and synergy-or for misalignment of cultures and values. This shift will affect the public sector ethos, and needs to be actively managed, rather than happening by default. (UK Audit Commission 2002: 5)

The more recent developments in the United Kingdom, Canada and New Zealand, and now Australia, appear to be introducing an important new element to NPM, namely, 'joined up government'. New Zealand's Review of the Centre in part reflects a similar theme, and they have also been focusing on innovatory approaches addressing wider problems across government. Rod Rhodes calls this development, and the related attempts to engage with outside stakeholders, 'network government', in contrast with Considine and Lewis's 'enterprise' or 'market' government as distinct from 'process' government. While these distinctions are useful, my strong suspicion is that the emerging 'network' model is building on, and not replacing, previous developments: what we have is a mixture of all three.

With these thoughts in mind, let me go into a bit more detail on developments here and overseas under the following headings:

Flexibility, Devolution and Risk Management

As mentioned, a common element in responding to more rapid change and increased competition has been to allow more flexibility to managers, but with greater accountability for results. Closely linked to these management trends has been more emphasis on managing risk.

In Australia, the devolutionary process began in earnest in the mid 1980s as both financial and personnel management provisions were progressively devolved to agencies, and within agencies. Promoted primarily by the Finance Department, the greater freedom for managers was accompanied by:

The outcomes/outputs framework in the late 1990s took this further, with stricter measurement of outputs allowing better benchmarking of performance, and with accrual accounting ensuring full costing of government services.

The Financial Management Improvement Program in the 1980s promoted improvement in agency management capacity to take advantage of the new freedoms. Consequently, risk management has become a key concomitant of reform. Public servants have traditionally been reluctant to manage risk but we are getting better. In Australia, the Management Advisory Board's Guidelines on Managing Risk provide useful advice. So does the Auditor-General, whose focus in this sphere has increased of late. The CPA Australia, as most of you will know, has also developed several helpful guides, case studies and surveys on public sector risk management designed to broaden understanding of strategies and tools.

The Public Service Act 1999 represented the culmination of the devolution of HR management that had occurred progressively over the previous two decades. In particular, agency heads were given all the powers of employers, with the Public Service Commission's role being more of 'quality assurance', guardian of the APS Values and promoter of good management practice.

In all the countries we are discussing today there have been similar attempts to transfer responsibilities from central agencies to individual agencies-in how they administer their budgets, recruit and retain their staff, and how they meet the performance requirements of the government. We have also seen an increase in responsibility devolved within agencies in how they operate internally. Each of these involves managers in more explicit risk management and requires the public service to reconsider how it continues to meet its accountability responsibilities.

In the United Kingdom, the government's devolution agenda has had mixed success. In 2002, the Blair administration set out national standards to regulate service delivery by devolving service provision to those on the front line-the local office. It is also intending to give local staff greater control over planning and over developing service modifications to suit local conditions. This is part of the Blair government's commitment to what it calls 'civil renewal'-and it hopes that increased community participation in service provision will encourage more active citizenship.

Despite the British Government's efforts to implement these reforms, the centre retains a dominant role. Dr Chris Aulich points out that 'one of the key ends of the reform process (devolution) has been out of synchronisation with the means to achieve it (technocratic processes)'. Consequently, he says in a nice phrase, 'centripetal forces have generally submerged centrifugal ones'. (Aulich 2003: 18)

The Blair Government has imposed targets on and published league tables rating the performance of individual hospitals, schools and other social services. Further financial resources have depended on meeting minimum targets. The use of targets helps to shift the focus of managers from inputs to outputs and outcomes, and the regular monitoring of results has had both a punitive effect-with failing services at risk of closure or overhaul-and a positive effect-by providing the opportunity to identify and learn from success.

But it has also created a measurement culture that is not always conducive to good management. A recent parliamentary committee has expressed real concerns about this culture claiming that the top-down targets were seen as 'imposed by fiat' and largely irrelevant in many local areas. The committee found many areas where delivering on targets, like reducing truancy rates by 10%, seemed to have become more important than delivering services. Let me give you three examples from the report:

The waiting time targets for new outpatient appointments at the Bristol Eye Hospital have been achieved according to this report, at the expense of cancellation and delay of follow-up appointments. Over 1,000 appointments have been cancelled each month. Many are delayed more than 20 months. As a result, in two years more than 25 patients have lost their sight completely and these figures will probably be much higher by the time the backlog of appointments is completed.

The second example illustrates the integrated nature of public services. The more the police met their target of closing the justice gap-putting people in prison-the more difficult it became for the prison service to meet its own targets on overcrowding and re-offending. A focus on individual departmental targets meant that attempts to develop a more 'joined-up' approach to service delivery were failing.

The third example relates to cases of deliberate manipulation of figures and cheating. Some accident and emergency units, for example, appeared to be prone to creative accounting and finding imaginative ways around targets for maximum waiting times. Because the targets required patients to be off trolleys and in bed within a certain time, trolleys either had their wheels removed or were re-designated as 'beds on wheels' so that the target could be achieved. (UK H of C Public Administration Select Committee 2003)

This is not the way that performance should be recorded. Measures need to tell an accurate story. How we use numbers matters, and the danger of the measurable driving out the important can be real.

I'm certain that the British government is not alone in creating perverse consequences at times from its development of performance measures, but it is clearly a major problem when targets are centrally set without a better understanding of local service needs. The initial response of more 'inspectorates' does not seem to have been entirely successful.

Earlier this year the Blair Government began talking about 'new localism' in which there would be what it called 'constrained discretion' for local governments and offices to make local decisions. It would, they said, create opportunities to innovate, design and develop services around the needs and priorities of their communities. An example of this approach in the National Health Service has been the concept of 'earned autonomy', as local health authorities demonstrate success against particular priority targets. It will be interesting to see what the criteria are to earn autonomy, what continuing constraints apply, and the degree of discretion permitted.

One last comment about the United Kingdom reforms, which I suspect is apposite to all of us. Their recent review of accountability in government concluded that:

… rewards for successful innovation by public sector employees are either non-existent or very small, whereas the perceived penalties for failed projects-in terms of damage to career prospects and censure in public-are very real. … the way in which the civil service operated … all worked against risk-taking. (Sharman 2001)

In Canada, a risk management framework was introduced in 2001 but, according to the Auditor-General, only a limited number of agencies have incorporated risk management practices into their operations. She recently argued that the definition of accountability needs to be redefined to take into account the greater emphasis of governments on managing for results and developing public/private partnerships. Managers now have greater flexibility in how they get results, and are urged to take reasonable risks, while observing principles such as fairness, propriety, and good stewardship. She argued that 'rules should be few, clear, meaningful, and consistently applied'. To take account of changes in the way government now operates, the enhanced definition should reflect transparently the shared obligations of all partners involved in government business. At the same time, it needs to stress the importance of the means used-as well as results achieved.

Many of these trends are also to be found in the USA. There is a strong US emphasis on managing for results-they have had a Government Performance and Results Act since 1993-but, as in the United Kingdom, the performance measures are centrally set and assessed. A scorecard is employed by the US General Accounting Office to track the progress of agencies towards meeting the President's Management Agenda.

New Zealand's 'Managing for Outputs' program (2001) requires government departments to adopt a more strategic and outcome-focussed approach to service provision and delivering outputs. The move there towards devolution from the centre has not been as continuously sustained as in Australia. The Review of the Centre (2001) was accompanied by some pendulum shifts back away from the previous doctrinaire approach to producer/provider splits and devolved authority to providers. Nevertheless, the July 2003 monthly review of progress towards Review of the Centre goals makes it clear that much remains to be done to reduce the systemic barriers to devolution within and between government departments and central agencies (a need for better aligned departmental service boundaries and improved flexibility at the local level, for example).

The unitary nature of the British and New Zealand systems and the contrasting USA, Canadian and Australian federalist models make it difficult to compare and apply the experiences of devolution across each of these jurisdictions. In the USA and Canada, the diverse challenges facing each tier of government make it hard to resolve the problems of one tier by applying the methods successful in another. There are also wide differences in approach at the State or provincial level.

Some commentators, like Professor Yehezkel Dror, favour a more centralist approach:

devolution of authority and functions to lower levels requires improvement of the center of government so as to set policies and standards, monitor and build up lower level capacities-while preserving over-ride authority and powers. (Dror 2002: 12)

From what we can see this has been the British approach-centrally driven standard setting and monitoring with attempts to devolve functions and authority.

The tension between the shift to the 'front line' and control from the 'centre' seems certain to remain an issue at the heart of the devolution debate in each of these countries. It is also one that may work itself out differently in each jurisdiction.

The recent focus in almost all countries on taking a whole-of-government, or what the British call 'joined up government', perspective, is leading to a reassessment of devolution's impact on the ability of governments to successfully manage across the public sector. I shall talk more of that later.

Values and Ethics

The process of devolution has rendered values and ethics of growing significance to public administration. Interest in this 'global public concern' was highlighted by the 1998 OECD recommendation on public sector conduct, and reinforced by it 2003 Guidelines for Managing Conflict of Interest in the Public Service.

As you know, the APS Values are now established in the Public Service Act and agency heads are required to uphold and promote them in their organisations. They provide the integrity framework that can give assurance to the Parliament and the public of the professionalism of the Service - the absence of central rules.

I am convinced that the integration of the public service values into the way public servants work is an essential factor in achieving high performance in a devolved environment. Accordingly, the Commission actively promotes the centrality of values and ethics to public sector decision-making and management.

Three weeks ago, we reported on a research project aimed at seeing how successful agency heads and senior executives have been in embedding APS Values within their organisations. The management guide that emerged from their study encompasses numerous case studies on what has been achieved and the latest international thinking about values-based management. If properly implemented, values-based management offers organisations a framework of relations and behaviours within which they can drive different business tasks and respond quickly to changing circumstances. It provides, if you like, flexibility and accountability as well as leadership and service provision within an ethical context. A values-based framework also builds public trust in an organisation's activities, thus increasing its overall effectiveness.

New Zealand's State Services Commissioner has a similar view about the importance of ethics and values. He also serves as the primary steward of the values and standards of the State sector and is responsible for developing minimum standards of integrity and conduct for public servants.

Like us, they have a Code of Conduct, which requires the formulation of higher ethical goals and a stronger emphasis on values. Nevertheless, his latest annual report makes it clear that, in his view, understanding of the 'Code' throughout New Zealand's State sector is less than satisfactory.

The British Government has also acknowledged the need for greater civil service awareness of values and ethics. Last year, in its response to a parliamentary report on The Public Service Ethos, it recognised staff involvement in articulating standards and values as an essential element of its reform program.

Earlier this year, in an effort to secure a more prominent role for values and ethics, the House of Commons Public Administration Select Committee produced a draft Civil Service Bill designed to better embed ethical standards, primarily via a Civil Service Code. While the official Government policy supports such legislation, that support has been no more than lukewarm, and the British civil service is yet to establish values programs on the scale of Australia's.

It will be interesting, given current developments in the United Kingdom surrounding the death of Dr Kelly, to see whether the demand for such reform will grow stronger. But it is worth noting here that the British are ahead of us in one area, and that is that they already have a code for their ministerial advisers.

The late 1990s witnessed renewed interest in values and ethics by Canada's top public servants, with the appointment of a Secretary-level task force on values and ethics. After an Auditor-General's report on values and the Prime Minister's plan of action on government ethics in 2002, a Code of Values and Ethics for the Public Service was introduced in June 2003. It sets out the prime values of Canada's public service, and states that they need to be democratic, professional, ethical, and people-oriented.

The Code is supported and strengthened by guidance to their heads of departments-Guidance for Deputy Ministers and The Management Accountability Framework. The principles underlying each are:

These are intended as the basis for ensuring ethical conduct by public servants and confidence in Canada's public service. As already noted, the Canadian Auditor-General has argued that accountability needs to be redefined with an emphasis on fairness, propriety and good stewardship on the part of public servants. Early this year Canada's Cabinet Secretary reiterated the conviction of senior public servants that 'values and ethics are the immutable core of the Public Service'. (Canada. Privy Council Office 2003: 3, 4) Interestingly, Canada has taken a firmer stance towards politicians, with the Prime Ministerial Ethics Adviser this year turned into a statutory position. How successful this will be in the hothouse of the political system remains to be seen.

The emphasis on public sector values has been echoed more widely through the OECD in particular. Its Public Management Committee has issued a series of reports since 1997 on ethical conduct in the public service and the need to build public trust. Yehezkel Dror also highlighted in a keynote address last year to the Commonwealth Association of Public Administration and Management that critical to building self-confident government is to have deeply embedded democratic values.

New Roles and Approaches

Most countries have been attempting to focus more on results, while allowing a more flexibly managed public service. For many, this has meant seeking new structural approaches, such as purchaser/provider arrangements and the development of new forms of agency. In Australia, the ministerial department-with its clearly defined lines of responsibility, accountability and communication-has, over the years, continued to be used for managing core government administration. There has, however, also been a significant increase in the number of other agencies, including statutory authorities, and a number of successful purchaser/provider arrangements. Amongst the most notable are:

The growth in the number and range of agencies has raised the question here recently as to whether we need some templates to guide the Government as to when to use which type of agency, and the appropriate governance structure. The Uhrig Review has been charged with the task of recommending such templates. Its report has yet to be released.

As I've said, in Britain the Thatcher government established its 'Next Steps' executive agencies, based on the formal separation of policy from administration. By the middle of the 1990s three quarters of their public servants were working in these agencies. There are now more than 1000 such agencies. An executive board oversights the work of each one and they operate with day-to-day independence from Ministers, although Ministers remain ultimately responsible. Many administer regulatory functions which are considered more appropriately dealt with at arms length from government departments. The Cabinet Office and the Treasury are working with departments to implement the recommendations of the 2002 report, Reconnecting Departments and their Agencies, which called for closer matching up of Ministerial and departmental policy objectives with agency service delivery outcomes.

New Zealand went along a similar path and developed state owned enterprises, called crown entities, which now administer many functions previously undertaken by the public service. The public sector was broken up into smaller units-funders, purchasers and providers, policy and delivery agencies, commercial and non-commercial interests. As a result, there is now a view that the public sector is too fragmented. Not all vehicles for creating competition were successful, and progress has been made since the Review of the Centre (for instance, in the health area) in better integrating service provision without the assumption that competition is always the answer. The New Zealand Cabinet has also agreed to a series of initiatives to address fragmentation and improve the alignment of State sector agencies.

Although, like us, the Canadians have been reluctant to tinker with the classical 'ministerial/department' model, they have displayed a stronger preference for stakeholder and citizen consultation processes than we have done. My earlier reference to 'dualities' that must always be balanced comes in particular from a Canadian, Ralph Heintzman of the Treasury Board, who has argued that improved Canadian practice rests greatly on re-examining and successfully addressing issues of:

He suggests that ministerial departments can frequently encompass the necessary flexibility to manage these dualities.

Service Delivery and Community Involvement

As I noted at the beginning of this talk, a key theme in Australia since the Coombs Royal Commission in the 1970s has been to increase community participation in the administration of government.

There is a growing expectation that members of the public, clients, and industry members will be consulted in terms of both policy development and service delivery, thus improving their opportunity to influence the services they receive. Indeed, there is increasing demand for governments to address community driven initiatives. As a result, agencies not only inform citizens about policy initiatives and programs, but also now involve them in helping to develop policy and programs through focus groups, consultative committees and open inquiries.

Decisions that have been reached through a consultative process can carry greater legitimacy and credibility in the community. They can lead to a shared sense of ownership and greater understanding of the issues that affect us as a community.

As part of that responsiveness, as public servants, we need to understand the different values and perspectives of our stakeholders, partners and clients in developing policy options. It is also part of our responsibility to convey to Ministers the views of client groups and stakeholders, and to advise them of how best to take them into account.

The quality of service delivery rests primarily on:

In Australia, the government introduced service charters, for example, in 1997. They apply to all federal agencies that deal with the public. Such charters set out clearly the services an agency provides, relevant service standards, and feedback and complaints mechanisms concerning an agency's services. By 2002, 68 of the 70 agencies required to implement a service charter had done so.

Public sector decision-making has also been subjected to greater scrutiny via a number of administrative law mechanisms, such as federal, state and territory ombudsmen, Freedom of Information Acts, and the federal Administrative Decisions (Judicial Review) Act. This has not only ensured citizens' access to the decision-making process affecting them, but also provided opportunities for systematic feedback and improvements in service delivery.

To improve service provision, the New Zealand State sector established the Capability, Accountability and Performance Pilot Project. By facilitating better planning, the project has brought about a closer correlation between government policy aims and their implementation by State sector agencies. Opportunities for enhanced public participation and the expression of citizen opinion, however, remain limited, though the latest monthly progress reports on post-Review of the Centre reform indicate a renewed emphasis on building government-stakeholder links through increased collaboration and 'dialogue'.

British governments have been enthusiastic supporters of service charters for many years and have recently been focusing on modifying the culture of their public servants towards improved public service delivery.

In a recent review of the performance of thirty agencies, the United Kingdom Audit Office concluded that service efficiency could be improved by:

Canada's main government management framework, Results for Canadians, relies heavily on a citizen focus and on targeting outcomes in shaping its programs and services. The Guidance for Deputy Ministers and The Management Accountability Framework documents previously mentioned also highlight improved service provision and increased responsiveness by Canada's public servants to the community. So, too, are the Public Service Modernization Act (now before the Senate) and Canada's Modern Comptrollership Initiative. The Modern Comptrollership Office was established in 2002 to ensure that staff implement the principles of service delivery, accountability and modern management within a values-based culture. The role of some form of 'standing panel' for citizen engagement within this framework was canvassed here in Canberra at a 2002 National Institute for Governance Forum addressed by Professor David Zussman, President of the Canadian Public Policy Forum.

Earlier this year a parliamentary committee concluded that:

… very laudable aims are in many cases not being fulfilled nor widely recognised as such by those on the front line whose job it is to deliver them. This is not least because of the lack of proper integration between the building of an organisation's capacity through what we call 'the performance culture' and tracking quantitative achievement in the public services through the 'measurement culture'. The result has been tension between those charged with centralised responsibility and those who are responsible for dispersed delivery of public services. (UK H of C Public Administration Select Committee 2003: 1)

Indeed, in the field of government-citizen collaboration, Canada appears to be the leader. The incidence of Canadian government-citizen cooperation has increased in recent years, a durable example being extensive consultation over air quality in British Columbia. Ralph Heintzman attaches high importance to a citizen focus in his 'alternative service delivery' model (Heintzman 2002: 4, 20), and Canadians appear to have well-honed techniques for engaging the public on important public policy issues, such as those identified by David Zussman.

Whole-of-Government Developments

All five countries are now making strong efforts to respond to complex societal and economic problems that cross traditional boundaries of Ministers' portfolios, or the federal-state and local divide, by improving cooperation and collaboration between agencies and levels of government.

Australia has always had a strong policy coordination capability and, since 1992, this has been further enhanced by the work of the Council of Australian Governments. Through the participation of the Prime Minister and State Premiers this Council now addresses a wide range of Commonwealth-state issues from a national perspective.

Australia has achieved some significant whole-of-government successes in managing the 2000 Olympics in Sydney-involving many agencies at federal, state and local government levels-and the tremendous cross-government and cross-agency efforts put in during 2002 and 2003 to quell the bush fires in eastern Australia. The challenge, here and overseas, is to develop mechanisms, structures and cultures, which facilitate whole-of-government approaches that become a characteristic of the way our democratic governments work-not only in times of crisis.

Last year the Howard Government set out an active whole-of-government agenda for Australia, ranging from science and innovation, and sustainable environment, to demographics, and work and family life. The Management Advisory Committee established a project earlier this year to advise on practical ways in which we might improve the way we address whole-of-government priorities. Most other countries have also been seeking whole-of-government solutions for these and other complex 'wicked problems' that have been so difficult to resolve successfully.

To meet this challenge, public sector leaders may need to manage in new ways and across new types of structures, and in Australia the Public Service Act requires leaders to promote cooperation with other agencies as part of their management responsibilities.

In the United Kingdom the process of collaboration across agencies is called 'joined-up government'; in Canada, 'horizontal management'; and, in Australia, 'integrated government', or, increasingly, 'whole-of-government'. Whatever term is used, the process is essentially, to quote the British Auditor-General, 'the bringing together of a number of public, private and voluntary sector bodies to work across organisational boundaries towards a common goal'. (UK Comptroller and Auditor General 2001: 1)

In managing whole-of-government initiatives, Australia, like most countries, is seeking an effective balance between centrally driven imperatives and local autonomy. There is a risk that the very devolution that has helped to improve the performance of public services over the current period might exacerbate the problems of coordination, just when community expectation of seamless services and whole-of-government coordination is soaring.

The Australian Auditor-General has pointed out the risks to accountability in joined-up, or integrated, projects that inevitably involve more than one participating agency, and frequently involve organisations that may not be directly accountable to government and not subject to parliamentary scrutiny. While departments and agencies will have their normal reporting responsibilities to Ministers, they will also need to ensure that their partners can live up to these reporting standards.

The United Kingdom government has developed a very active 'joined-up' government agenda largely administered from the centre. The Blair government, because it considered that traditional arrangements rooted in a well-entrenched, function-aligned 'departmentalism', still hold strong sway, has attempted to overcome this with a strong, centrally managed, devolution program. Earlier efforts in this direction, such as the Thatcher government's experiment with health sector purchaser/provider arrangements in the 1980s, had mixed success. The Blair government has therefore elected, through a rigorous inspection regime and its use of league tables of performance, to retain a much greater degree of central control than in Australia. (Mulgan 2002: 25) It also uses some cross-cutting targets, with the Cabinet Office exercising a strong oversight role, to drive coordination of particular Government priorities across portfolios.

The UK Government is also intent on better integrating policy formulation and service provision mechanisms. Innovative approaches include allocating each cross-portfolio whole-of-government project to a particular Minister who is responsible for seeing that they are effectively implemented.

The British appear to have taken whole-of-government further than the four other nations and have found that budgetary and efficiency benefits have accrued from:

Like most reforming governments however, it may not yet have achieved a truly successful balance between centrally driven reform and devolved 'front line' service delivery. Earlier this year a parliamentary committee concluded that:

… very laudable aims are in many cases not being fulfilled nor widely recognised as such by those on the front line whose job it is to deliver them. This is not least because of the lack of proper integration between the building of an organisation's capacity through what we call 'the performance culture' and tracking quantitative achievement in the public services through the 'measurement culture'. The result has been tension between those charged with centralised responsibility and those who are responsible for dispersed delivery of public services. (UK H of C Public Administration Select Committee 2003: 1)

In Canada, whole-of-government originated chiefly in the Deputy Minister Task Forces appointed from 1995 to improve public sector performance. A recent Treasury Board Secretariat report stressed the need for a government, or enterprise-wide, whole-of-government approach to services and service delivery in both English and French, especially in the sphere of online service provision.

Canada, like most jurisdictions, is concentrating more and more on developing 'seamless' services that cross jurisdictions and do not require detailed user knowledge of governmental organisation. Canadian governments seem better advanced than some others in appreciating the importance of wider connections when addressing whole-of-government priorities including collaboration with stakeholders, who may have a financial (or other) vested interest in the outcome of projects and, more importantly with concerned citizens, for whom the direct consequences may be less but who are the primary focus of the policies. (Zussman 2002: 1, 5, 11)

Efforts to advance whole-of-government in the USA are exacerbated by its four levels of government (federal, state, county and local). However, a recent Syracuse University study pointed to an across-government determination to better understand 'high-capacity management systems' and whole-of-government approaches. (Syracuse University 2003: 11)

New Zealand is also giving more emphasis now to whole-of-government approaches as indicated by its Review of the Centre and subsequent efforts as outlined in Getting Better Results (May 2003) and Integrated Service Delivery (July 2003). A particularly interesting initiative has been to establish cross-agency 'circuit breaker' teams to solve previously intractable problems by drawing on a combination of front-line knowledge and central technical support. This initiative, interestingly, has been coordinated by the State Services Commission.

In all countries, part of the increased interest in horizontal government comes from increased expectation in the community that technology can and should improve connectivity and the provision of seamless services. All the countries have been pursuing e-Government, with Canada perhaps ahead in some respects.

Of course, horizontal management is not an entirely new issue. The desirability of consistency and coordination has always been with us. But it is interesting to see that, after the substantial gains from devolution and NPM, there is renewed appreciation of the need to balance vertical and horizontal management. Getting the balance right needs also recognition of the costs of joining thing up, and the need to ensure that the benefits do indeed outweigh those costs.

Public Service Leadership Capabilities

All the public services I have been discussing have identified leadership as a critical challenge. In part this is related to demography. By 2008, the Australian Public Service faces the likely departure of almost one quarter of its workforce, and a higher proportion of its senior staff. A similar situation prevails in each of the four other countries.

More generally, however, most of us are attempting in any case to improve leadership capability and succession management. The emphasis on 'leadership' in Australia and elsewhere parallels the increased interest in values. Just as values can provide an integrity framework that allows flexibility and capacity to adjust to change, leadership entails the capabilities beyond just experience and skills, which can nurture values and support critical relationships and shape strategic direction without undue central prescription.

Our Senior Executive Service is at the centre of APS leadership. Four years ago the Commission articulated the crucial success factors for such leadership in the Senior Executive Leadership Capability Framework. This identifies the skills, capabilities and attitudes we expect of leaders in the Service so that people know what is required for success now and into the future. Essential to this process is devising 'pathways' to senior leadership; developing a more integrated leadership strategy; and 'hardwiring' these for more practical application within a values-based culture.

The APS is moving towards greater flexibility in working arrangements, particularly for older workers, including in the area of superannuation, to reduce the incidence of early retirement. This would enable it to retain more of its experienced staff-undeniably one of its main future strengths.

In recognition of the importance of public sector leadership, and the particular skills required of leaders in the public sector, the Australian and New Zealand Governments are foundation members of the newly established Australia and New Zealand School of Government (ANZSOG). This initiative, led firstly by Victoria, will also allow emerging leaders to rub shoulders with each other across jurisdictions.

New Zealand has also created a Senior Leadership and Management Development Program:

… a core development system that encompasses governance and organisational arrangements, development infrastructure and processes. Enablers include a human resource framework and a development culture in the Public Service and the wider State sector. (A Profile of the Public Service of New Zealand 2003: 41)

This follows a period when New Zealand had serious problems in fostering a leadership cadre of senior Public Service executives, partly owing to the capping of the Public Service chief executive salary budget, combined with greater salary freedom for agency employees outside the formal Public Service. And the State Services Commissioner is concerned at what he sees as 'failure to invest systematically in our good people'. (New Zealand State Services Commission 2002)

In the United Kingdom, control of leadership resources continues to be more centralised than in Australia, the Cabinet Office playing a key role. Their interest in leadership, like ours, is driven primarily by the growing importance of such capabilities as building constructive relationships within and across organisations, and shaping strategic directions. They are also aware of demographic reverses-some twenty-seven per cent of British public sector employees are now aged fifty years or over-but see this as much as an opportunity for renewal as a concern about skill shortages.

To enhance the leadership skills of Canadian public servants the Public Service Commission collaborates with the Canadian Centre for Management Development and the Treasury Board Secretariat's (Assistant Deputy Ministers') Leadership Network. The formulation of recruitment plans directed especially at the young, and the development of employment policies designed to reflect Canadian ethno-cultural diversity, have also been prominent features of such planning. For Canada, demography has been a particularly important issue, requiring aggressive succession planning, recruitment and leadership development in recent years.

Forty per cent of US Federal Government employees eligible for retirement by 2010 are projected to do so. Increasing attention is being given, therefore, to succession planning. To improve leadership and succession management, the Office of Personnel Management has instituted a Senior Executive Candidate Development Program. (Ballard 2003: 1) A 2003 study of US governance concluded that such long-term planning is essential to better organisational performance. (Syracuse University 2003: 9, 10) A major dilemma in the USA (and in the other jurisdictions) is the 'serious human capital shortfalls' within Federal Government ranks. This is a key strategic planning issue for the future. (US General Accounting Office 2003: 1)

Conclusion

Let me draw some threads together from this overview. Australia has been one of the leaders in public sector reform over the last 25 years. So have the United Kingdom and New Zealand in particular.

All the countries I have referred to have embraced concepts popularly known as New Public Management-a greater emphasis on results, a renewed interest in markets, and a concerted effort to improve management using some of the techniques common to private business. In my view, the gains have been substantial overall, though not without some failures.

We have all learned a lot as we have gone down this path, with Australia benefiting I believe from its pragmatism and sustained incrementalism, as compared to the wider swings experienced by the United Kingdom and New Zealand or the greater conservatism in Canada and the USA.

Amongst the lessons have been the importance of risk management that comes with devolution, the need for a clear values framework to support integrity in the absence of central rules, and the importance of people management and leadership. We have also learned that there is a range of different structures that can be used to deliver quality services efficiently, and that consumer or citizen focus requires a lot of effort.

I would also highlight the continued importance of those principles and forces that have always shaped public administration, particularly:

As I admitted to the CPA in my last talk, I remain conscious of how much truth there was in Charles Lindblom's 1959 essay on 'The "Science" of Muddling Through'. Notwithstanding all the gains of recent years from a more systematic approach to managing for results, public administration cannot be divorced from the political processes where interests conflict, ambiguities must be managed and compromises forged. We should not apologise for that-it is the essence of democracy.

References

Albrow, Martin 2001 'Society as Social Diversity: The Challenge for Governance in the Global Age', in Governance in the 21st Century, OECD, Paris, pp. 149-83.

Auditor-General of Canada 2002 Modernising Accountability in the Public Sector, Office of the Auditor General, Ottawa.

Aulich, Chris 2003 'Reflections on Public Sector Reform in the United Kingdom', Canberra Bulletin of Public Administration, no. 106, February 2003, pp. 15-21.

Australian Public Service Commission 2003 The Australian Experience of Public Sector Reform, APSC, Canberra.

Ballard, Tanya N. 2003 'OPM Launches Program to Diversify Senior Executive Corps', in 'GovExec' (http://www.govexec.com)

Barrett, Pat 2003 'Public Private Partnerships-Are There Gaps in Public Sector Accountability?', Address to the 2002 Australasian Council of Public Accounts Committees, 7th Biennial Conference, Melbourne, 3 February 2003 (http://www.anao.gov.au)

Canada. Privy Council Office 2003 Public Service of Canada: Annual Report 2002-03 (http://www.pco-bcp.gc.ca/docs/Report/Reporttext_e.htm)

Canada. Treasury Board Secretariat 2003 Guidance for Deputy Ministers (http://www.pco-bcp.gc.ca)

Canada. Treasury Board Secretariat 2003 The Management Accountability Framework (http://www.tbs-sct.gc.ca)

Canada. Treasury Board Secretariat 2000 Results for Canadians, v. 1, Ottawa.

Considine, Mark & Lewis, Jenny, 2003 'Bureaucracy, Network, or Enterprise? Comparing Models of Governance in Australia, Britain, the Netherlands, and New Zealand', Public Administration Review, v. 63, no. 2, March/April 2003, pp. 131-41.

Dror, Yehezkel 2002 'The State of Governance', Outline of a Keynote Address, CAPAM Biennial Conference, Glasgow, 9 September 2002, 23pp.

Heintzman, Ralph 2002 'Performance, Culture Accountability: The Dynamics of Organizational Form in the Public Sector', Presentation to Plenary Session, 'Getting Government Delivery Right', CAPAM Biennial Conference, Glasgow, 10 September 2002, 27pp.

Howard, John MP 2002 Strategic Leadership for Australia: Policy Directions in a Complex World, Commonwealth of Australia, Canberra.

Lindblom, Charles E. 1959 'The Science of Muddling Through', Public Administration Review, (19), 1, 1959, pp. 79-88.

Mulgan, Geoffrey 2002 'Joined Up Government in the United Kingdom', Canberra Bulletin of Public Administration, no. 105, September 2002, pp. 25-30.

Nethercote, J. R. 2003 'Australian Public Administration in Perspective', in The Australian Experience of Public Sector Reform, APSC, Canberra, pp. 11-21.

New Zealand. State Services Commission 2002 Annual Report: 2001-02.

A Profile of the Public Service of New Zealand 2003 Commonwealth Secretariat, London.

Royal Commission on Australian Government Administration 1976 Report, AGPS, Canberra.

Sharman of Redlynch, Lord 2001 Holding to Account: The Review of Audit and Accountability for Central Government, London.

Syracuse University, The Maxwell School/Campbell Public Affairs Institute 2003 The Government Performance Project: Final Report (http://www.maxwell.syr.edu/gpp/grade/2002full.asp)

United Kingdom. Audit Commission 2002 Recruitment and Retention: A Public Service Workforce for the 21st Century (http://www.audit-commission.gov.uk)

United Kingdom. Cabinet Office & HM Customs & Excise 2003 'Public Sector Benchmarking Service' (http://www.benchmarking.gov.uk)

United Kingdom. Comptroller and Auditor-General 2001 Joining Up to Improve Public Services, The Stationery Office, London.

United Kingdom. National Audit Office 2003 Improving Service Delivery: The Role of Executive Agencies (http://www.nao.gov.uk))

United Kingdom. Parliament. House of Commons Public Administration Select Committee 2003 On Target?: Government by Measurement (http://www.publications.parliament.uk/cm200203/cmselect/cmpubadm/62/6203.htm)

United States General Accounting Office 2003 Management Reform: Continuing Progress in Implementing Initiatives in the President's Management Agenda (http://www.gao.gov)

Zussman, David 2003 'Engaging Stakeholders: Why, When and How?', National Institute for Governance, Canberra.

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