Some aspects of the Budget process can have unintended consequences for APS collaboration, experimentation and long-term thinking. This risks undermining both the quality of advice to government and the implementation of government decisions. A cross-portfolio approach to allocating resources and prioritising investments presents an opportunity to deliver better outcomes for all.
What we think is needed
- A budgetary framework that: retains fiscal discipline and aligns spending with government priorities; enables faster resource reallocation and improved collaboration; and ensures the APS is sustainably resourced to serve the government, the Parliament and the Australian public.
- Clear alignment between government priorities and public service resourcing. This could include agreement on a small number of cross-portfolio policy priorities (guided by government and supported by Secretaries Board) and reprioritising existing spending to reflect these.
- Processes to ensure ministers receive the best Budget advice from an investment and policy perspective, taking a whole-of-government approach to funding and incorporating long-term assessments of program and investment outcomes.
- A sustainable approach to departmental capital funding, including greater capacity to invest in long-term projects.
What is shaping our thinking
- The important role of government in setting Budget rules that best support its fiscal strategy and policy priorities.
- Governments’ expectations that APS systems, and structures and resourcing enable both the development of good policy and budget advice, and the effective implementation of government decisions.
- Feedback that some processes are impeding the APS’s ability to reallocate resources to shifting priorities, or to work across agency boundaries to design or implement policies that reflect cross-government priorities and deliver the best results for people.
- Concerns around the approach to investment in APS infrastructure and systems, including: the way offsets work in practice; challenges presenting the benefits of longer-term investment; and the steady decline of departmental capital budgets.
- Recent efforts to address internal APS capital investment priorities, including initiatives such as the Modernisation Fund.
- The experience of other jurisdictions in aligning whole-of-government priorities with civil service resourcing, including through long-term results frameworks and outcomes-based budgeting (e.g. New Zealand, NSW and the UK).
What we are still exploring
- The best approach to funding for APS capital investments and sustainable departmental capital allocation models.
Comments
Thu, 02 May 2019
This proposal is biased towards changing the system, rather than how can we operate better within the system, which is driven by bugetary process and financial acts and regulations. Suggest we should focus on our area of control fiirst rather than what lies outside it. Suggest that renewed business acumen education campaign that includes budegtary process (inc good reasons behind them), project management, contracting, negotation and faciltation should be included here. The sought outcome is to create both stronger buiness soft skills in staff and also business skills.
Wed, 01 May 2019
If an agency or department can achieve government priorities for less money than anticipated, why cannot that saving be then re-allocated within the agency to other priority policies, programs and services? APS efficiency and innovation might be better incentivised or rewarded this way.
Wed, 01 May 2019
Budgets, resources dictate how departments operate - they are rewarded for spending their exact allocation. This is perverse and counter to how the private sector operates - we could learn more from the private sector many of which still have the scrutiny of regulators and shareholders. There is no flexibility in how an organisation uses its funds - there is ASL and supplier budgets which provides a false economy ie departments use supplier funding to prop up ASL and in doing so pay through the nose. This stems from the budget process - PM&C, Treasury and Finance need to take a fresh look at this.
Wed, 01 May 2019
The present approach to costing and offsetting proposals is fundamentally flawed.
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The focus on offsetting from within a portfolio drives perverse outcomes. Rather than accurately costing policies, costs are made to align with available offsets, irrespective of whether those costs actually represent the real cost of the program. New priorities should be costed to provide a realistic estimate of what it will actually take to deliver them, with offsets identified from lower priority spending across government, if available/necessary. This would encourage departments to offer more accurate estimates of costs.
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Finance's incentive is actually to misrepresent new policies as costing less than they do to a) make it seem they are controlling costs and b) improve budget outcomes. Agencies then shuffle resources around internally. This gives the government a false understanding of what programs actually cost.
c) There is a massive overestimation of both Finance's capacity to understand and accurately cost a program in all the different agencies and the quality and accuracy of the results it produces. Finance's costs should be seen as an estimate. Instead, those figures are trotted out as fact, and then agencies need to make reality fit a media release.
d) the Budget documents are impenetrable. The Budget documents should clearly show budgets and actuals for each measure a portfolio is working on, whenever that measure was enacted. That gives a baseline for its funding. Then it should show new spending/saving for each portfolio. At present, if you wanted to know how much an agency spent on measure A in the 2014 Budget in 2017, you'd have no chance.
Wed, 01 May 2019
This culture of making sure the allocation is spent because we wont get it next year is crap, It has to change, we are all taxpayers and should think like that, using up the travel budget , or spending money becaue it's avaialable is wrong, just as a bean counter saying you cant have funds if a project is worthwhile and truly in the public good is also crap. But its not an unending bucket, think like a taxpayer- is it worthwhile?where is the incentive for that?
Wed, 24 Apr 2019
How much money, how many people, and how long does it take to get a basic approval through to purchase a part that's required to be able to continue a project? Less than twenty bucks, what is seeming like a lot of peeps, for something that's non-controversial, and it ain't done yet either.
It seems like some projects worth millions of dollars - that we all seen in the media, up for Auditor-General scrutiny, review via Royal Commission or a government-initiated review - could have been decided in what is sounding like much less hassle.
Needs to be round the other way? Doesn't it?
Wed, 17 Apr 2019
Just do it
Wed, 17 Apr 2019
Resource allocation should never be based on staffing caps and should always favour developing in-house capability over contracting out. Agencies should be able to utilise their budget to bring expertise into the APS with as many staff as is appropriate to delivering the outcomes required with the resources available. The efficiency dividend must also change.
Ultimately, I think the biggest weakness of this project is that it is at the whim of politicians who may find it expedient to attack public servants or the Canberra as the nexus of policy and program coordination in this country. An example of this problem was in 2013 when the Liberal Party came into government with a promise of depriving the APS of 12,000 jobs. This was part of a bid to win over voters. We need our politicians uphold the value of the work public servants do and the professionalism with which we do it.
To get this, I think we need:
- the APS review to send a message to the parliament that public servants want them to recognise the important role they play and to commit to providing the resources necessary for us to perform it to the standards the community should expect; and
- some form of formal institutional change that puts APS staffing levels firmly out of politicians' hands and into the hands of the agency heads.
Mon, 08 Apr 2019
This is a good priority. In order to achieve it one thing that needs to change is the Department of Finance's approach to costing proposals for a couple of reasons:
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it is based upon a Programme Management based model for business which does not reflect the current reality of Government - so it focuses very heavily on how many staff it would take to manage a grant type activity, but is really poor at dealing with complex technology investment, business model changes, new business activities ...etc. In practice then agencies spend their time haggling over how many EL1s and APS 6s are in a costing, rather than looking at the overall value proposition.
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The costing is treated as an absolute rather than an estimate - meaning that as reality comes in and we find that something costs more or less than the estimate, we don't have good levers to deal with this.
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There is no contingency - finance treats contingency as if it is a slush fund for agencies. In fact the purpose of contingency is to provide the decision-maker (in this case the Cabinet) with a risk-based view of the investment and ensures that they can see the potential full costs of doing something, and would still decide to go ahead with an investment. Stripping contingency in practice means that you are undercosting a proposal and generally speaking Government will be asked for more money down the track because for example you would look silly if you had half a car and so you're essentially forced to pay the other half.
in my view the contingency Reserve should be used better to factor real contingencies into forward estimates, without just giving it to agencies. approval to access should be between Finance Minister and responsible Minister - to save cabinet process.
Wed, 03 Apr 2019
This proposal should also cover the allocation and expenditure of funds between financial years. Currently there are many instances of expenditure that doesn't represent value for money for the APS late in a financial year, due to the money not being available to spend after 30 June. There should be capacity for unspent money to be rolled over to the following financial year, especially for one-off projects that run across several years.
Wed, 03 Apr 2019
The way NPPs are managed leads to a significant number of consultants - they build their knowledge and move on. The public service and corporate knowledge is poorer for this outcome. If the NPP is expected to lead to an ongoing/BAU piece of work ASL needs to be factored into the initial allocation to be carried on as BAU going forward. We should not expect the agency to find the ASL wholly from within its current allocation.
Wed, 03 Apr 2019
The proposal doesn't go far enough to look at why the current budgetary process provides perverse outcomes for the APS and the Australian community. The APS is rewarded for spending the money allocated - if there are underspends this is frown upon. To address this agencies would need to be rewarded for savings.
Mon, 01 Apr 2019
Agency based ASL caps cause perverse outcomes. The secretaries board should be accountable for ensuring appropriate balance of resourcing (including staffing) occurs across the service; lending and reallocating resourcing when required. I've lost count of the number of times I've heard from one colleague that they are absolutely smashed and unable to sustain the pace of work priorities (regularly working 16 hour days), and heard from another colleague with similar skill set that their teams are bored and have nothing substantial to do. Informal, flexible resource sharing can take place but is often frowned upon because it gives a signal that the 'offering' team doesn't need the resources it has.
I also agree with other comments here that annual appropriation cycles and lack of flexibility around longer term or 'non-traditional' procurement processes causes perverse outcomes for the APS. We need a more creative way to account; supporting the important AND the urgent work.
Thu, 28 Mar 2019
Rather than have each agency have recruitment why can't we have 1 recruitment channel into the APS? As we all work under the ILS framework this should allow flexibility to determine the strengths, skills and capabilities of new employees entering the Public Service. This would also be extremely cost effective and impartial in the section and allocation of staff across the APS and aligning them to positions across all government agencies.
We have missed an opportunity to reduce recruitment costs, align people to their core strengths and capabilities, drive engagement and improve retention across the APS. By improving on this process this will also support being more innovative in our approach and improving performance and attendance through employee engagement. To drive a lasting change this will require a commitment from all government agencies to see the benefits of a new recruitment model. By taking a united approach each agency can also review what hasn't worked well in the past recruitment models and bring new ideas and suggestions to the table.
Thu, 28 Mar 2019
If the APS is the custodian of taxpayer funds which need to be directed towards evidence-based, civic good and strategic purposes etc; there are strong reasons to end practices such as 'oh hey it's March/April, we'll loose the $ if we don't spend it before EOFY, quick buy a consultant or contractor'.
Wed, 27 Mar 2019
We need to reframe our whole approach to managing our funding for the provision of infrastructure and services for the Australian people. Tying the funding tightly to each program is very restrictive for the administrators, there is no room for creativity or innovative initiatives. With pre-identified outcomes specific sometimes years in advance rolling out a program is nothing more than an administrative exercise, rather than a purpose-driven, outcome focused activity. In fact, we need to refocus our financial systems to have them PARTNER with program areas to achieve successful outcomes rather than have a regulatory and monitoring function that has no vested interest in the outcomes for the citizens. This would significantly change how things operate.
Wed, 27 Mar 2019
A key point missing from statement of scope is the impact that the budgetary cycle has on achieving value for money.
Funds appropriated in one year typically can't be carried forward to the next financial year unless they are rephased or tucked away in a special account). The rephasing burden provides an incentive to spend the funds in the year appropriated, rather than taking a whole of program approach. I have a suspicion that part of the performance metric for SES Band 2s is whether they have successfully spent all the money that they have been allocated.
However, it may be that the best use of public money is not to spend it all if more was appropriated than actually needed (whether due to poor initial estimates, or change in circumstances). How can this saving behaviour be rewarded and incentivised?
Also, could there be a move to a multi year appropriation model for programs which doesn't need for rephrasing to happen for the funding to be preserved for the future years?
I've seen instances of little scrutiny being given to big spending towards the end of financial year, when there is a great desire to exhaust program budgets.
I've also seen instances where upfront payments are made due to the timing of the budgetary cycle, which greatly reduces the commercial bargaining position of the Commonwealth if there is underperformance by the recipient. Addressing the incentive to rush spending prior to the end of financial year will help alleviate challenges regarding ensuring value for money is actually achieved once funds have been paid to grant recipients / contractors.
Fri, 22 Mar 2019
Strongly agree with this. One additional thing to consider would be including a specific innovation or R&D Budget - like many organisations who want to future proof themselves against the megatrends you have identified above.
This could be done through existing mechanisms of the ARC but with more dedicated effort from core APS, or with direction from the Secretaries Board. To make this useful a proper innovation system for Government needs to be developed which is capable of promoting ideas, filtering them, testing them and aligning them to overall investment priorities.
The budget for each initiative should be kept small and a "fail fast, fail cheaply" mentality adopted for short term innovations, while a more strategic R&D plan developed for longer term over the horizon investment.