Give power to Indigenous communities, bureaucrats told

“They are ready to lead. What they want is a say in local decisions.”

His comments follow a recent damning Productivity Commission draft report on the Closing the Gap Indigenous program that was highly critical of federal attempts to work more collaboratively with communities.

It described engagement as “tokenistic”. Agencies often gave unrealistic time frames for meaningful community input, and provided limited feedback on how input has shaped policy decisions.

Outsourcing works, sometimes

Professor Davis predicted the move away from outsourcing would result in a “broader mix of public and private provision funded by government, delivered by networks of government agencies, not-for-profit partners and private companies”.

“Several decades on, the evidence is in about the shift in service delivery, and the consequences,” he said.

Citing the privatisation of employment services, Professor Davis said contracting had promised better customer care, value and shorter queues.

“The costs of contracting have become more apparent over time. Many long-term unemployed still struggle to find jobs. The high churn in short-term jobs delivers a margin to the private providers, but not necessarily fulfilling and reliable employment for Australians.”

A 2019 study by Britain’s Institute of Government had concluded that outsourcing delivered “meaningful economies and improvements” in standardised services such as waste collection and cleaning.

However, Professor Davis said the same study found mixed results for frontline services including prisons, hospitals and employment services. There were measurable gains in cost and service quality, but sometimes those were achieved by pushing the most difficult, and expensive, cases back to government.

The study said private provision of construction showed poor results, and outsourcing of probation had been a conspicuous failure.

“Evidence over four decades shows that outsourcing can be a valid choice, but is not intrinsically a better option,” said Professor Davis. “There is a case for governments to outsource if the economics and the expertise and the technology all line up to deliver better services.

“It takes judgment and evidence to know when a service is best provided by government, and when others are better placed to deliver. This is an argument for informed pragmatism over ideology.”

Professor Davis said there would always be a need for governments to contract out, noting the need to buy in technology support.

“There will be services, as now, for which government relies on competitive markets and external advice.

“The use of consultants in government will rebalance in light of public opinion, but we can never retain all necessary expertise within the public sector.”

Place-based strategy

Professor Davis previously ran the Paul Ramsay Foundation, where he championed giving local communities a much stronger role in service delivery.

“This model has already produced important improvements,” he said. He pointed to the Maranguka Just Reinvest program in Burke in western NSW, where community, government and philanthropic bodies pool funds to reduce incarceration and crime, notably domestic violence.

“The Maranguka model works because community sets priorities and directs expenditure. Government follows, not leads.”

He said this required very different structures, practices and accountabilities.

“In a placed-based approach, local needs and priorities set the agenda. Participation, co-design and shared delivery all become essential.

“A place-based approach requires government not just to co-operate but, in many cases, to surrender control of funding and program design to community leadership.

“This does not sit comfortably with electoral cycles, or with ministers keen to make announcements. Instead, it makes officials truly servants of the public.”