The Siren Call to Reduce Reliance on Consultants: Missing the Point?

By ANZSOG Dean and CEO Professor Caron Beaton-Wells 

As public services go about reducing reliance on external contractors, while at the same time being under pressure to keep a lid on staff numbers, an oversimplistic focus on outsourcing versus insourcing misses the opportunity to fundamentally rethink how governments source advice, input and feedback. 

Resourcing choices should not be caught up in political debate over the size of government or seen as a binary choice between resourcing in-house versus procuring external support.   

If we fall into that trap, we risk overlooking the deeper questions that many scholars and practitioners are grappling with – questions as to the role government should play and the operating model it should adopt in an era of transformative economic and social upheaval and change. 

New Public Management has been abandoned as the dominant paradigm for the public sector. While debate will continue about what should replace it, including ‘New Governance’, ‘Problem-Solving government’ and ‘Relational public services’, we are clearly working in a much more uncertain and complex environment.  

It’s an environment that demands a role for government that is both greater AND different.  The difference lies in the recognition that effective public administration requires broader more diverse sets of knowledge, skills and mindsets. That diversity will only be achieved by more meaningful engagement, collaboration and partnership with stakeholders outside of the sector. 

The need to rebuild public sector capability is a widely accepted mantra, at least within the sector and amongst many public administration experts. Making change will be a marathon not a sprint, because it is as much about changing culture as it is about building capability.  

Governments have spent several decades stripping the public sector of the expertise needed to develop robust, effective policy and deliver high-quality services responsive to, and anticipating, public needs. In many cases, the expertise that has been lost has been in capability areas that should be at the core of public administration including: research and analysis, policy and program evaluation, strategy development and planning, data and digital, and understanding of the legal and ethical obligations of government. 

It is hardly surprising then that not only has the public lost confidence, so too have some public servants themselves and their political masters. All too often, bringing in the consultants has been the band aid solution. 

Restoring confidence in government by focusing on public value, not cost savings

Confidence in the public service will not be restored if the central focus is savings gained from greater insourcing. A costs-focus will be vulnerable to changes in political fortune and, with them, invariable ideological shifts relating to the size of government and approach to economic management.   

 A better starting point is to assess the optimal resourcing mix in any given context, with a clear sense of what government wants or needs to achieve for the community. Such assessments should be informed by data (procurement, finance and workforce-related) that exposes not just where the capability gaps lie but the economic impact (at least) of decisions about how to address them, based on government purpose and public need.   

At the same time, we need to be experimenting with creative ways in which to unlock resources through collaborative approaches that leverage collective intelligence and ingenuity to broaden the advice governments receive. Providing the tools and skills for, and creating an environment conducive to, this kind of creativity should be part of the capability renovation of our public services. 

Across these endeavours, there is opportunity to draw on greater support and participation from the academic sector, civil society organisations, private business and communities themselves.  

Harnessing that opportunity would not only alleviate the pressure on inhouse resources (in both the short-term and longer run) but would also go some way to addressing concerns about service providers acting contrary to public sector values or being remote from the communities they serve.  

None of this is obvious or easy in practice. As someone who has worked as an academic for more than two decades, the vast expertise that our universities have to offer is obvious.  Equally obvious is how hard universities can be to work with.  

Academics operate in accordance with particular incentives and employ a particular modus operandi, neither of which readily align with providing ready-made or rapid solutions to the daily challenges of public service work. Institutionally, universities struggle with resource constraints and while most aspire to produce engaged applied R&D, there are structural and cultural impediments to delivering on the aspiration.  

There are models to address some of these challenges, including exchange schemes that foster reciprocal mobility between public services and academia and Australian Research Council Centres of Excellence that bring leading researchers together with governments and industry to produce innovative transformational research on questions of national importance. 

With the renewed focus brought about by consultancies ‘gone wrong’, we should seize the opportunity to broaden and deepen the debate about what modern public administration entails and chart a course together in its construction.  

If we miss that opportunity, there is every likelihood we will be hearing the same siren call concerning consultant over-reliance in a decade’s time.