MICHAEL KEATING. Policy Advice: The Thodey Review of the APS and the Government’s ResponseDec 31, 2019
This article discusses the key role that the Australian Public Service (APS) should play in the development of government policy and the recommendations that the Thodey Review of APS makes to restore that role. Unfortunately, the Government is not interested, and has rejected all these recommendations.
The Thodey Review is a comprehensive review of the future challenges facing the APS. In this article, however, I want to focus on the critical role that I believe the APS should play in policy advising.
I would like to begin by noting that the Thodey Review affirms that “the basic role of the APS … [is to provide] robust and evidence-based advice to ministers, frankly and freely.” (p. 22). Indeed, for more than a century after Australia became a nation, policy development relied very largely on independent public service advice – although many would say too much so, and that was the reason for the 1980s reform of the public service to make it more responsive to the Government of the day.
Like many others, however, I am now concerned that the balance has swung too far, and that the capacity of the Australian Public Service (APS) to provide independent policy advice has seriously deteriorated over the last decade.
Thus, the Thodey Review of the APS found that “APS capability has declined in critical areas — including strategic policy skills”. Similarly, Laura Tingle in her 2015 Quarterly Essay quotes Ken Henry (a former Treasury Secretary) as saying that “I think many departments have lost their capacity to develop policy, … [and] I seriously doubt there is any serious policy development going on in most government departments”. While, Tingle also quotes Martin Parkinson (until recently the head of the APS) as saying that there “is a decline in the quality of advice and an erosion of capability, to the detriment of good government”.
Although this deterioration in APS policy capability did not start with the Morrison Government, it doesn’t help that Morrison is personally so uninterested in developing any sort of policy agenda.
That lack of interest in policy may also help to explain why Morrison wants “a public service that is very focussed on implementation”. He considers that “guided by clear direction from Ministers, the public service is at its best when it is getting on with the job of delivering the services Australians rely on and ensuring Governments can implement the policies they have been elected to deliver for the Australian people”.
Of course, Morrison is right to insist that in a democracy “responsibility for setting policy, for making those calls and decisions lies with the elected representatives of the people, and expecting Ministers to provide that leadership and direction”.
Nevertheless, in my experience when governments are working well, there is a creative partnership between the government of the day and the public service.
For example, many of the very productive economic and social reforms during the 1980s and 1990s were initially proposed by public servants, and public servants worked in close interaction with ministers in developing the details of almost all those reforms. Equally, however, there is no question that Ministers led and directed the reform process and were responsible for all the decisions finally taken.
Against this background, in what follows below, I will describe those recommendations by the Thodey Review that would help restore the policy capability of the APS. These recommendations can be grouped under two broad headings: those intended to enhance the professional capability of the public service based on research and evaluation; and those intended to restore the independence and access of public service advice. Unfortunately, what is most disappointing, if not altogether surprising, is the almost wholesale rejection by the Government of all these recommendations to restore the policy capability of the APS.
Research, Evaluation Capability and Budgeting
First, the comparative advantage of the APS in policy advising is that its advice should be disinterested, drawing on its experience of what works and what doesn’t. But the public service only knows what works and what doesn’t if each department specifically defines the purpose and objective of each of its programs, measures progress towards those objectives, and then evaluates that progress systematically.
Second, departments need to be actively engaged in research so that they understand how the operating environment for their programs and policies may be evolving, how citizens behaviours are changing – possibly in response to the policies and programs – and what new needs are emerging.
Third, to ensure that the evaluations have teeth and are used to improve decision making, they need to be fully embedded into the budget decision making process.
The Thodey Review found, however, that “APS in-house research and evaluation capabilities and processes have fallen.” Furthermore, research commissioned for the review found that the APS’s “approach to evaluation is piecemeal in both scope and quality, and that this diminishes accountability and is a significant barrier to evidence-based policy-making”.
Thodey also found that APS research is inhibited because “departments and agencies are often more concerned with reputational risk, seeking to pre-empt or divert criticism rather than learning from experience and feedback.” An example of how this has inhibited research is provided by Andrew Podger’s accompanying article, where he describes how the Dept of Social Security no longer publishes essential research about the performance of the welfare system.
Finally, I would also add that, to the limited extent that departments do undertake evaluation of programs and policies, these evaluations are frequently contracted out to consultants. The risk then is that:
1. The evaluation is not honest: the consultant wants repeat business, and therefore is inclined to tell the client what they want to hear,
2. Public servants lose the critical skills that should underpin their capability for policy advising.
By comparison, when I left the APS towards the end of 1996 it was mandatory for:
· All new policy proposals to Cabinet to include evidence that supported the proposal;
· These submissions also had to include the processes by which the proposed measure would be subsequently evaluated if agreed upon;
· All portfolios had to submit to Cabinet an evaluation plan agreed with Finance, whereby all programs would be evaluated on a rolling basis over the next three years, and to keep the evaluations honest, Finance had the right to be represented on the steering committee for any evaluations that it nominated.
Thankfully, the Thodey review’s recommendations broadly support a return to these previously very successful past practices guiding evaluation, research and budgeting, although Thodey’s recommendations are less specific than I would have preferred.
Unfortunately, however, the Government, in its response, did not agree with systematic changes to Cabinet or Budget advice processes. In addition, the Government considers that “The APS has strong applied research capability”, although all the examples cited are specialised bureaux, with only limited input into policy decision making processes.
Furthermore, an open information sharing process is essential if research is to make a significant input into policy; but open government is something which this Government has frequently opposed. Indeed, the Government specifically opposed Thodey’s recommendations for reform of the Freedom of Information Laws to improve public access to information.
Finally, the Government has no intention of getting rid of staff ceilings which have encouraged the use of consultants, even when public servants would be cheaper.
In sum, one wonders therefore if much at all will really change to restore the policy advising capability of the APS.
Relations with Ministers and Frank and Fearless Advice
The other main concern about the APS’ role in policy advising is the extent to which it still offers frank and fearless advice and is able to speak truth to power. Although the Thodey Review did not use such blunt language to describe this concern, it discusses two changes in the last couple of decades that have reduced the access and independence of APS advice.
First, as the Review concluded, “the APS cannot be effective if it does not have an effective partnership with the elected government”. Accordingly, a “major issue for this review is the drifting apart of the APS and elected governments”, and “the proliferation of advisory networks available to ministers”.
As the Review points out contestability in policy advice is on the whole a healthy development in Australia’s democracy. Nevertheless, there are good reasons why, as specified in the Act, the Department Secretary should be the principal source of advice to each Minister. This is because the Department’s advice should be highly professional and knowledgeable. It should also be independent as the Department does not represent any vested interest, nor should it be deliberately political, although it should take account of the values and priorities of the Government of the day.
As the Thodey Review recognises there is a role for Ministerial advisers, and in my personal experience the Minister’s Office staff and the Department can work well to complement each other. But today there is a concern that the proliferation in the numbers of Ministerial advisers, and their lack of training and policy substance, means that these advisers often compete with, and even supplant, the access of the Department to the Minister.
The Thodey Review made a number of recommendations to improve the quality of Ministerial staff, but to my mind they didn’t go to the heart of the problem, which is the extent to which Ministerial advisers have now taken over and even have the final say in what policy advice is presented to the Minister. A telling example is that even the Treasury – historically a most independent Department – was told to stop making recommendations for tax reform, as that would be done by the Treasurer’s Office (see Andrew Podger’s accompanying article in Pearls & Irritations.)
The other key issue, identified by the Thodey Review, as possibly impacting on the ability to deliver frank and fearless advice, is the appointment and termination processes for Department Secretaries.
The Review expressed its concern about “claims that, at times, the appointment of secretaries reflect political patronage and do not follow due process — that who you know can be more important than what you can do. Likewise, discourse on terminations can focus on perceived political loyalty rather than the quality of a secretary’s performance. There is little transparency in current processes for senior APS appointments and terminations. Without this transparency it is difficult to refute these claims.”
The Review went on to conclude that “The effect of such reporting, and the inability to counter their implications, is loss of trust by the public and fear among public servants. Submissions and consultations have highlighted fears that public servants at times struggle to speak truth to power for fear of losing their jobs in the same way their predecessors and former secretaries did.”
In response, the Review recommended a more robust and transparent process governing the appointment and termination of Department Secretaries. Drawing on my own personal experience from having been involved in such decisions I am somewhat sceptical that such processes can be made to work, unless the Prime Minister wants them to.
In any event, the Government also rejected these recommendations, declaring that this was consistent with the advice of the Secretaries Board, which frankly amazes me.
Reluctantly I am forced to conclude that the Morrison Government doesn’t really want high quality independent policy advice based on evaluation and research.
Instead, what we have is an essentially populist government, and a feature of populism is a mistrust of experts; be they climate scientists or public servants.
Unfortunately, this populism is leading to policy failures that are undermining the trust in government solutions, and specifically in the APS; with the Thodey Review reporting that “only 31 per cent of people trust public services provided by the APS”, and that “Fewer than 41 per cent of Australian citizens were satisfied with the way democracy works in Australia in 2018 — down from 86 per cent in 2007.”
On the other hand, a true conservative government has always seen that it had a special duty to maintain and improve the standing of the institutions of governance. A good example is John Howard, who in his 1997 Garran Oration said that: ‘The responsibility of any government must be to pass onto its successor a public service which is better able to meet the challenges of its time than the one it inherited.’
But clearly, Scott Morrison, is nothing like the man he calls his mentor: John Howard.
Michael Keating, as Secretary of the Department of Finance, led the reforms in the 1980s, involving improved budgeting and more devolution of financial management, accompanied by greater accountability. Subsequently, in the 1990s he was Head of the APS.