That government has a consulting problem is old news.
The focus so far has largely been on PwC; the other consultancies are mostly keeping their heads down, with an air of ‘there but for the grace of god’. Little attention has been paid as to how the public service itself has contributed to this state of affairs; thus far, it has managed to stake out the role of victim.
True, ministers, especially in the last government, made clear their distaste for public servants and were more open to material that had the fingerprints of consultants all over it. But the Australian Public Service (APS), institutionally, often lacked the will to argue for its own role, the determination to hold consultants to contracts and push back on ‘land and expand’ tactics, and the intellectual capability to assess or contest ideas being peddled by different groups.
The consequences of APS dependency are apparent to any who have dealt with the internal machination of policy and program delivery. As Andrew Podger has pointed out, it has been a long-term slide, not simply in terms of capability, but also with performance, governance, and constitutional implications.
The government is still collecting ideas from other governments, such as New Zealand’s long-term insight briefings, for example. That’s not a bad thing: the APS is in desperate of a sense of renewal and implementation of the Thodey Review, itself probably 10 to 15 years too late, is slow.
Challenges for Australian government consulting
But the government’s solution to its consulting problem—its own in-house Australian Government Consulting (AGC)—does not bode well.
Don’t get me wrong: I am deeply concerned about the loss of capability within the APS and truly hope for its improvement. But while the intent here is understandable, it smacks too much of a one-shot silver bullet.
There’s a major caveat to any critique or effort at assistance: information on the function and the thinking behind the AGC is limited. The government remains opaque and tentative—further cause for concern over APS improvement. And so I can only pose questions that address matters that need to be appropriately resolved to allow such a capability to succeed—for a qualified definition of success.
First, what is the funding model? So much behaviour within the APS is driven by budgeting and funding decisions. The funding model—its size and length—will help determine AGC’s independence and scope of work.
A funding model where it is expected to raise its funding by charging departments for its work might encourage departments to take extra care in their tasking; they may also simply opt out.
Second, who is the client? This question is fundamental—the AGC needs a strong sponsor in Budget deliberations and in arguments over findings and recommendations (which I’m assuming the AGC will make).
This matters, too, because relationships and trust with clients are at the heart of successful consulting practices. That inherently implies that the AGC has to demonstrate clear value to its sponsor, potentially separately to the agency for whom it is doing work.
Third, what, exactly, is its role? There’s a sense that problems in government are well known and defined, and work with the AGC will be smooth and transactional in nature. That’s rare. More likely, the client has difficulty articulating the problem they need resolved, or it’s contested internally and changes with the external environment. That is, after all, the nature of wicked policy problems.
Moreover, consultants often play a variety of different roles for clients, from listening, helping frame issues, testing alternate possibilities, questioning assumptions, making connections, discretely raising concerns over behaviours, broad research and horizon scanning, to internal data corralling, sorting, cleansing, etc that may be needed well before they can turn their hand to the main task. Will the AGC engage in and be funded and staffed for such work?
Fourth, does it have assured independence? And if so, how? This is where it starts to get tricky. The AGC is inside the tent. Its head will be a not very senior public servant. And I’m sorry, but Band 2s can be eaten for breakfast in a serious stoush over policy, regardless of the rigour of the analysis. Standing on principle is not necessarily a good career move and an ambitious Band 2 will be tempted to compromise, potentially threatening AGC’s integrity.
Fifth, what will be in place to ensure assurance and evaluation? How will the AGC be held to account (through the Finance costing process, like the rest of the APS)? On the flipside can it be afforded the time to learn and grow into its role, given the levels of reliability and expertise expected of public policy?
Similar, earlier, efforts, such as the Behavioural Economics Team (BETA) and the push to engage the researchers of CSIRO’s Data61, often foundered on the applicability of their more abstract work to an amorphous, highly pragmatic, fast-changing policy agenda. As such, it’s hard to judge the value of policy-consulting work. External consultants can, and do, resell their ideas, products, services elsewhere; the AGC will be more constrained and under scrutiny by their own peers.
Sixth, how can the AGC ensure it has the right people and skills for its tasked projects at the time needed? Scheduling work is a major issue for any consultancy. The AGC is likely to have only 38 staff in total—a drop in the ocean against the over 19,000 full time equivalent consultants and contractors identified in the government’s Audit of Employment—and will be paying considerably less than market rates.
Starting small and niche might be smart but it’s still challenging, especially in terms of expertise (and security clearances), and contrary to the expectations being loaded on the AGC. Presumably, the AGC may have to look outside, and contract out some—possibly a large part—of its work. That may leave the AGC focussing mostly on problem translation, procurement and contract management, collation, and quality control. Which may leave departments wondering if they could cut the middleman.
Last, how will the AGC retain curiosity, generate contestability, and overcome the inward-focussed insularity characteristic of APS culture? Bureaucracies—of which the AGC will be part—are hardly known for their openness and curiosity about the world. Moreover, ministers are wary of contestability of ideas and advice; their own favoured policy proscriptions and projects may be delayed or found wanting.
Then there is knowhow and knowledge—intellectual property at the core of any consultancy. Once, intelligence agencies and government itself could be considered repositories of specialist knowledge and understanding about the world. But with the internet and data a competitive advantage, consulting companies have long been able to claim that their access to a knowledge base, research, and contacts are well beyond the depth and reach of that present within the APS.
In contrast, the APS has suffered from a form of organisational amnesia over the last two to three decades, replacing libraries and physical file repositories with user-unfriendly, often inaccessible, and limited electronic systems, constraining external interaction and at times forbidding travel, and allowing expertise to wither. Will the AGC be given support to rebuild knowledge stocks and management systems in the APS?
An outwards-in model
Establishing a sustainable, successful in-house consulting capability is a Herculean task. And even if successful, even if it manages to seed and nurture talent, it may not be enough to win the larger campaign—rebuilding policymaking capability inside the APS. An AGC by itself does not address public policymaking frameworks or mechanics—the conception, analysis, development, testing, delivery, and evaluation of public policy, and especially, decision-making. That may need a cleaning out and rebuilding of the Aegean stables first.
Further, the nature of the policy-making environment has changed. Government has fewer means to hand to influence matters; its room to manoeuvre is more limited; its policies are more contested by external, often globalised, parties; and unforeseen foreign events can more likely generate unanticipated cascades affecting Australian interests. A cloistered in-house consulting model—even one with business development and capability uplift—may have served Canberra perhaps 20 years ago. But now, given the pace, pressure, and variability of change in an increasingly complex environment, the government may need a somewhat different approach.
The APS is already having considerable difficulty in securing skills and talent, ensuring exposure to external events, and exercising rigorous analysis and judgement in uncertain contexts. If the government is serious about better policy, it should consider seeding and supporting a large and vibrant external community of think tanks, community groups, individual researchers, and practitioners, and provide links between those, the AGC and the APS.
Such an ecosystem would offer ideas, analysis, outreach, and skills, helping to shore up the AGC’s capability while also providing external feelers into the broader environment. It would need a non-traditional mechanism for support: existing grant processes are overly burdensome, and compliance focussed. Nor is it the consultation theatre currently in vogue, with its endless calls for views, transfer of costs to the community, cherry-picking of ideas, and lack of feedback and accountability.
Even if successful—for a given measure of success—the intent behind the AGC will fail without sustained political support. That the UK equivalent of the AGC has been closed, apparently due to lack of departmental interest, is telling. The question is not simply whether the APS can heal itself—unlikely, given the fundamental change needed. But nor should it seek to return to some earlier form; rather, it needs to adapt and reinvent itself for the challenges Australia is facing over the next three to ten years and beyond.