Report: Public service lacks capacity for oversight of outsourced services

The expertise of government workforces is so badly depleted they can’t keep tabs on outsourced services, warns author of bombshell Queensland report.

Former university boss Peter Coaldrake was the author of the bombshell report that this week put Premier Annastacia Palaszczuk on the ropes.

The expertise of government workforces across the nation is so “hollowed out” they don’t even have the capacity to keep tabs on outsourced services, warns the man who exposed failings of culture and accountability in Queensland’s public sector.

Former university boss Peter Coaldrake, author of the bombshell report that this week put Premier Annastacia Palaszczuk on the ropes, said the problem was particularly acute in the executive ranks of departments at both federal and state levels.

“I think for some time there has been an in-built assumption that some of these activities would be better conducted and more efficiently conducted outside government,” he told The Weekend Australian.

“This is not an ideological question, and certainly not one confined to Queensland. There is always a case for government to outsource certain key functions – for example, in areas where it might not have any prior experience, which might include some IT or perhaps the arts … where there is significant funding that has to be determined on a competitive basis.

“But it’s the cumulative loss of expertise in the public service, which comes down to a very significant issue if the public service doesn’t have the capacity itself to oversight matters that have been outsourced.”

Three of the 14 recommendations put forward by Professor Coaldrake and accepted “lock, stock and barrel” by both Ms Palaszczuk and her opposite number, LNP leader David Crisafulli, involve public service reform.

The increased outsourcing of government functions to consultants and contractors had a “circular” impact, he found in a review that laid bare leadership deficiencies at the top of the Queensland government and deepened the integrity crisis dogging Ms Palaszczuk.

“The more work is outsourced, the less capacity is developed within the ranks of the public service, and the more public service roles default to ‘contract management’ rather than the hard but rewarding work of policy analysis, testing and costing options, making and defending recommendations, or the challenges of on-time on-budget project management,” Professor Coaldrake reported.

He urged that departments “more robustly account” for engaging consultants and contractors, with regular monitoring by a beefed-up auditor-general’s office.

On stability of public service leadership, he proposed that department and agency heads be appointed on fixed five-year terms, unaligned to the four-year electoral cycle.

David Thodey led the commonwealth public service review in 2019. Picture: Sean Davey

This was an important departure from a 2019 review of the commonwealth public service led by former Telstra CEO David Thodey – also involving the newly minted secretary of the Department of Prime Minister and Cabinet in the Albanese government, Glyn Davis – and would end the customary purge of top bureaucrats by incoming governments, Professor Coaldrake said.

He acknowledged this could be abused by a losing outfit that locked in its appointees before the election. “The point I am trying to make is that we are not on a good path where every time there’s a change of government, there is a ritual set of beheadings of the public service leaders,” he told the Weekend Australian. “We don’t have an endless reservoir of talent to draw on for the top jobs. Of course, there will be risks in the implementation but governments should work through those risks.”

The “rejuvenation of the capability and capacity” of the Queensland public sector must be a “major and concerted” focus of the political leadership, he urged.

He said his findings should be read in conjunction with Mr Thodey’s review of the Australian Public Service – even though this was effectively binned by Scott Morrison – at a time when APS reform was a priority of the new federal Labor government.

“I certainly think they interface,” Professor Coaldrake said of the two reports.