The architecture of fundamental service delivery reform in the Indigenous policy domain

They durst not do’t;

        They could not, would not do’t.

         King Lear Act 2, scene 2.

Last week, the Productivity Commission (PC) released a study report into the Expenditure on Children in the Northern Territory (link here). While technically a report about all children’s services funding in the NT, it is overwhelmingly a report about the services to Indigenous children given the over-representation of First Nations children in these programs.

The genesis of this study was the Royal Commission into the Protection and Detention of Children in the Northern Territory (link here). The study report notes (page 3) that the Royal Commission found that expenditure on children and family services is not rigorously tracked, monitored or evaluated to ensure that it is appropriately distributed and directed. It identified a need for greater coordination and transparency of government funding decisions.

The PC study report is a stunning document. It focusses on one strand of government service delivery (children’s services) in one jurisdiction (the NT), and lays out in forensic and stark detail the extraordinary complexity of the funding and service delivery arrangements, the extent of the overlapping funding, the ongoing existence of gaps in funding, the absence of coordination both between jurisdictions and within jurisdictions (see pages 112- 116), the underutilisation of agencies’ regional networks who of course have most direct contact with citizens, and the lack of internal coherence in funding decisions by both levels of government.

I recommend readers have a look at the report, at the summary findings and recommendations and especially at figure 2 on page 8 and figure 2.5 on page 68. What is crystal clear — even from a cursory reading of the report — is that the system for funding and delivering children’s services in the NT is not fit for purpose. What is particularly arresting is the PC’s documentation in various places (eg page 306) of the long history of previous reports and inquiries whose analyses and recommendations have not been taken on board by governments.

I don’t propose to analyse and critique the PC’s study report in detail. Suffice to say that in terms of children’s services, the study report identifies the need for a huge policy reform agenda both within and between the two jurisdictions. The PC’s Findings and Recommendations are well argued and thought out, cogent, and appropriately targeted. While I disagree with some recommendations, and would have framed others with different emphases, it is fair to say that if they were to be implemented, or even substantially implemented, they would make a huge difference to the quality of children’s service provision in the Northern Territory, and would thus lead to better life opportunities for many, if not most, of the NT’s most disadvantaged children.

Instead of taking a deep dive into the detail of the report, I want to take the opportunity to step back and ask the larger and arguably more fundamental question: what are the implications of the findings in this report for Indigenous service delivery more generally? And once we understand, or just have an inkling of those implications, how should governments and policymakers respond?

The first point to make is that this detailed and sophisticated analysis of one thin sliver of the service delivery spectrum suggests that similar issues are likely to arise in every other sliver. Having previously been a senior public servant in both the NT and the Commonwealth, I can attest that the detailed dynamics that pervade the children’s services programs and which have been identified by the PC permeate (to one degree or another) every other service delivery sector. Whether it is health services, education services, local government funding, housing provision, disability services, interpreter services, land management services, or arts and craft support services, the same issues of overlap, duplication, gaps, lack of coordination, poor data collection, poor data analysis, lack of transparency, ineffective contracting arrangements, and so on exist. Not only do these issues exist, they are deeply embedded in the institutional and political cultures of both the Commonwealth and the NT. In other words they are structural issues, not merely deficiencies in day to day administration. This means, too, that good people, working hard, across all parts of the system, contribute to poor outcomes.

Given that these structural dynamics are pervasive across Indigenous service delivery in the NT, and the accumulated impact of these service delivery dynamics is to create to deep-seated disadvantage, what is the point in focussing merely on children’s services. If a child doesn’t have a house, or lives in a grossly overcrowded house, or her education is effectively non-existent, and so on and so on, why are we surprised when neglect or even abuse occurs.

Second, the same points made by the PC about programs can be made regarding many policy settings: if policies regulating the consumption of alcohol are ineffective, or building regulations are ineffective or non-existent, or police are not stationed in larger communities, then why should we be surprised when children end up suffering.

Third, the PC correctly notes that the Commonwealth has a proportionally larger presence in children’s services and Indigenous issues in the NT than in other jurisdictions. However, the same dynamics are evident in other jurisdictions, at least in relation to Indigenous children. How do we know that? Look at the out of home care data (link here), and the over-representation of Indigenous people in the prison population across virtually every Australian jurisdiction (link here). If the Commonwealth decides to implement some or all of the PC recommendations, (a big ‘if’), there is clearly not a  persuasive rationale for limiting it to the NT. Any reform agenda should be rolled out on a national basis.

To sum up the analytic component of this post, the PC analysis is sophisticated, persuasive, and deeply shocking. It effectively tells us that in the NT, disadvantaged children, who are predominantly Indigenous , are being structurally neglected (at best) and structurally abused (at worst) by the service delivery systems that have been put in place to mitigate neglect, abuse and family violence. Those service delivery systems are not fit for purpose. Moreover, the systemic and structural incompetence of governments documented by the PC in children’s service delivery extend to other services, and these flawed dynamics are self-reinforcing and thus systemically drive further deep-seated disadvantage.

Moreover, government failures also extend to policy formulation and the overall policy and program failures extend to all other jurisdictions. The reason for the focus on the NT in the terms of reference for this report is that there is a critical mass of (Indigenous) disadvantage there, reinforced by poor policy and program delivery across the whole spectrum of government activity. This political salience of this critical mass is such that the nation’s political system has been unable to ignore it. Yet in other sectors, and other jurisdictions, similar levels of disadvantage and concomitant despair exist, albeit not in politically salient concentrations. It follows, as day follows night, that any reform agenda must reach beyond children’s services, to other program and policy areas, and must also have a national footprint.

So how to develop a reform agenda?

The fundamental paradox we face in the Indigenous policy domain (and elsewhere) is that governments react when events conspire to put issues on the public agenda, as was the case with the genesis of the Royal Commission in the NT, and then this follow up study by the PC. However, the reaction is invariably an involuntary impulse, a knee-jerk reaction, to establish a review, a commission, or a study, and to ride out the immediate pressure for reform. This is what has occurred here. To its credit, the PC has not produced a white-wash, but laid out a devastating critique of the current ways of doing business.  Notwithstanding the PC analysis, the fundamental challenge is to persuade governments to commit to substantive reform. For this problem, the PC has no persuasive answer. And to be fair, neither do I.

A second challenge that reinforces the paradox above is that comprehensive, step change, structural reform is complex and susceptible to implementation failure, to unconscious degradation as policymakers move on to greener pastures, and to deliberate undermining at critical junctures from interests who see benefit in reversion to the status quo ante. The inherent incremental complexity means that any reform process has to be sustained over time, and concomitantly, it also means that there are numerous potential veto points, where governments (often encouraged by interests in favour of the status quo ante) have the opportunity to change direction, or withdraw support. (The PC makes similar points at page 305). Substantive reform requires sustained political leadership and commitment.

Consequently, notwithstanding circumstances where virtually all stakeholders recognise that the status quo is sub-optimal, and even in the face of evidence of extraordinary government dysfunction, policymakers often fail to drive comprehensive sustained reform aimed at re-engineering the flawed processes for which they, and only they are responsible.

The underlying reasons for this governance incapacity are themselves complex and beyond the scope of this post to explore in any detail. I would point to the central role of dominant interest groups in the operation of our political system, and the progressive weakening of oversight institutions especially the parliament vis a vis the Executive, leading over time to the consequential exclusion of less powerful interests. See the analysis in my 2019 publication with Neil Westbury for a fuller consideration (link here).

So I am extremely conscious of the barriers to any reform, let along comprehensive reform. In the current pandemic crisis environment, these barriers are perhaps even more substantial. Who wants to think about government systems for service delivery when the threat and uncertainty of a global pandemic hangs over us?

Yet it seems to me that it is worthwhile to lay out at a high level some of the structural reform options that flow from the recent PC report and the more expansive analysis of its implications as laid out above.

I see two broad approaches to substantive reform that would be worth pursuing. They are conceptually distinct, but could be pursued as complementary approaches.

The first approach would be  for Indigenous interests to implement a targeted strategy that picks out five or six of the key reforms identified by the PC (of course there may be others), and to make them core principles and advocate continuously for their implementation and ongoing retention at both national and jurisdictional levels. For example, the following recommendations all drawn loosely from the PC study report, might provide a template:

·       Support for long term grant funding contracts (minimum of seven years) and a shift to relational contracting models (rather than mechanistic KPI monitoring);

·       Better data at the regional level (including greater local involvement in data collection and analysis);

·       Use of regional forums representing local communities as key planning and priority setting bodies for funding;

·       Adoption of radically greater transparency by governments in relation to program funding allocations to reduce the risk of political rorting and playing favourites; and

·       Guaranteed support for regional Indigenous institutions to allow for independent advocacy, priority setting, planning and so on.

Each of these reforms, if implemented across the board in Indigenous affairs would be significant. Together, they would amount to a major overhaul of the way governments relate to Indigenous interests. But to be properly effective, they would need to be locked in, not be subject to change, degradation or reversal. So they need  some sort of political and/or legislative reinforcement to be truly transformative.

The second (and much more ambitious) approach would involve a fundamental reconceptualisation of the service delivery funding system to take decisions on grants and contracting out of the hands of politicians and place them in the hands of substantively independent service delivery purchasers (SDPs).

Governments would appropriate block amounts of funding over multiple years to say 20 regional SDPs across the nation for key social services, and provide broad (and public) guidance in terms of overall priorities. In turn, the SDPs would make funding decisions on service delivery within their regions, and report on progress to both the public at large and governments. Of course, any change will meet resistance and this would meet more than most as it involves governments giving up the power to reward particular groups, sporting clubs and the like. But it is not radical. Indeed, there are already precedents in various sectors. For example, the North Australia Infrastructure Facility (NAIF) comes close to this model, although the relevant Minister appoints the members and he or she retains both formal and informal veto powers over decisions. Similarly, in the policy realm, Governments are prepared to outsource substantial discretion to the independent Productivity Commission, again while maintain a veto over whether to take up recommendations. Nevertheless, the core architecture already exists as a precedent.

Clearly, there is a lot of devil in the detail: the advantages of such a model would be maximised if both the states and the Commonwealth signed up; the independence of members will be crucial, and there would be a need to develop innovative selection processes that guarantee this as well as ensuring that the Boards include financial and governance expertise, client representatives, funded organisation representatives, and perhaps even elected representation; and of course, the wider the remit in terms of functional responsibilities, the more likely that potential service delivery synergies would be identified and taken up. While it would be possible to start in one sector (say children’s services) the benefits of going wider to more sectors and deeper to incorporate multi-jurisdictional involvement are significant.

So there is a clear choice to be made: we have a system of service delivery funding across multiple sectors which is not fit for purpose. The system doesn’t work. We have a long record of governments commissioning review after review, study after study, but subsequently failing to implement substantive change. And we have thousands and thousands of citizens’ life opportunities being curtailed, constrained, smashed and destroyed. In these circumstances — where positive outcomes are exceptions and not the rule, and are the result of the perseverance, ingenuity, resilience and sheer courage of individuals who spend their lives working in a system designed to fail — is it rational, or even ethical, not to consider different ways of managing the system of delivering services.

Compared to the way in which the major interest groups in society operate, the voices of disadvantaged citizens, particularly Indigenous citizens, are not well organised, not well funded, not well networked into the corridors of power, and ultimately just not listened to.  

The tragedy of course is that designing and building a system that works is not rocket science; it merely takes a degree of will, and vision. Nor is doing so win/lose; it is win /win. The nation’s failure to receive and digest reports like we have seen from the PC, and then to do nothing, reflects poorly on our political system, poorly on our leaders, and ultimately poorly on all Australians. We should do better.