7 – ‘Why this obsession with cutting public service jobs?’ The Age, 2 January 2015

I have often wondered this myself. It seems to be part of our culture to get stuck into public servants every now and then. The author says that cutting public service budgets it is politically attractive because ‘everyone hates public service workers and cutting their budgets seems to help balance the budget by removing public sector waste’.

However, in doing so, they are achieving a false economy according to the report cited from the Centre for Policy Development (CPD), False Economies: Unpacking public sector efficiency.

‘Every Australian needs to understand what politicians are talking about when they speak of the ‘efficiency’ of government. Why should we care? Because this is our money, being spent on us and the things that matter to us.’

This report completes a body of work on productivity and efficiency completed by the CPD Public Service Research Director, Chris Stone. Some of his key messages are;

  • A sound understanding of efficiency is needed in public debates on what services to fund, and whether their delivery should be outsourced or not, in order to ensure we are getting public value for public money.
  • There are significant difficulties involved in comparing the Australian public sector performance with the private sector, but the evidence available indicates that the two sectors have a similar level of efficiency.
  • Although Australia’s public sector is comparatively efficient, there is scope for improvement.
  • The government is identifying the public services that will be affected by cuts, but does not appear to be guided by any underlying rationale of what services government should be providing.
  • The heavy focus on cuts without sufficient consideration of the value of services means that other strategies for increasing efficiency are neglected, in particular innovation and professional accountability.
  • Two significant barriers to public sector innovation are an overly risk averse orientation within organisations, and a lack of resources invested in developing and implementing innovative ideas.
  • The current method for managing performance does not provide clear guidance to public servants on how they can work toward their organisation’s goals.

It is a report of more than 70 pages and should be read by every public service manager. The discussion in Chapter 1 about different types of efficiency is enlightening.

The connection between value, public value in particular, and reducing resources to achieve greater ‘efficiency’ is important. When there is a lack of clarity about what is meant to be achieved it is difficult to measure performance and easy to cut resources with a clear conscience. The consequences are only immediately evident to an informed few and may become evident to everyone in the long term. Defining the public value to be created is an essential activity. Then the arguments about efficiency can be held in the knowledge of what impact on value will result from changes to resources.

Colin Weatherby

Stone, Christopher 2014. False Economies: Unpacking public sector efficiency (http://cpd.org.au/wp-content/uploads/2014/06/CPD-OP37_False-economies_-compiled_EMBARGO26June.pdf)