Centrelink Experiment and Its Planning and Implementation of Reforms - Case Study Example

Contents Contents 1 Introduction 2 The Centre Link Experiment: History and Context 2 Role of the Centrelink 3 Audit Process 4 Framework for Evaluation 5 Lessons Drawn 9 Conclusion 10 Annotated Bibliography 12 Table 1: Balance Scorecard for Centrelink 19 Figure 1: Business Model for Centrelink 20 Chronology 21 Event 21 Significance 21 Comment 21 Reform Case Study Introduction Reforms in public management have over the years continued to change the public sector structure as well as the existing relationships between the private and public sectors. In most cases however, gaps have been identified between what the reform intends to attain and what has actually been attained. This paper focuses on the Centrelink experiment and its planning and implementation of reforms. The paper is a deep analysis of Centrelink with focus being on the various models that explain its functioning, the risks and benefits of the frameworks used, the various roles played by the agency and lessons that can be drawn out from the agency. The Centre Link Experiment: History and Context Centrelink experiment was launched as the commonwealth Service Delivery Agency in 1996 in the month of September and was officially established as an “independent statutory authority” in July 1997with its CEO being Sue Vardon. This new agency got the responsibility of distributing the government services to some of the 7.8 million beneficiaries of the social warfare services as well as benefits, which accounts for roughly $40 billion which is about 30% of the total expenditure of the commonwealth. In the year 2002 Centrelink employed a total of 23,000 staff spread all over across the 1000 service delivery areas. These varied from the full customer service centers to agents visiting the remote zones. The agency was initially situated at the Social Security Portfolio which was later known as; family and community services, due to the fact that most of its tasks would entail administering the entitlements under legislation of the Social Security (Scott, 1999). On its formation, the agency aimed at establishing effective structures of governance, creating one common culture among the staff members and developing a brand that is easily identifiable. One major challenge that Vardon faced during the early implementation of the project was on how to create a working culture capable of meeting all of the organization’s expectations of being a firm that is oriented towards meeting the very needs of their customers (Vardon, 2006). Sue Vardon left Centrelink on December 2004. It is also during this period that Centrelink made changes from the modern way of adapting to the government agendas and market forces that were constantly changing to what was seen as a convectional approach. Role of the Centrelink Centrelink was set up as a part of the ‘Howard Government’s’ experiment in reshaping the delivery of services as well as reframing the social policy. It served as an embodiment of the key principle to the Howard Vision for the public service; it was a specialized agency of service delivery separated from ‘purchasers’ policy functions. The establishment of Centrelink was along other business lines that operated ‘320 service centers’ as well as those that delivered payments of upto ten million to Australians (Figure 1 presents the business model for the agency). However as much as the organization enjoyed its monopoly provider status, it was obligated to deliver the services to various clients on behalf of the purchasing departments (up to a total of 25) in accordance with the terms of the- Quasi-Contractual Service Agreement. This was meant to show a larger level of transparency as well as accountability in the administration of the payments totaling to over 60 billion US dollar expenditure of the commonwealth. For several years the clients and staff at the Centrelink have generally been eager over the transformation (Pollitt, 2000). However, the experiment was reined in after eight years and centrelink was positioned under a fresh managing department and also closer ministerial path. Although the experiment is still on its course, it reflects the impacts of pressure to the service delivery agencies (Rowlands, 2002). The second phase of structure reform was marked by a return in to what was a convectional method of public- administration which covered areas to do with bureaucracy, responsibility and accountability (Hughes, 1998). The period between October 2004 and 2005, October was marked by setting of new strategies for the agency as well as by its internal restructuring. This was a step towards the agency’s transformation into the position of a statutory agency. The period of October 2005 upto December 2006 was marked by the agency’s struggle to attain its set out priorities in service delivery. The minister in charge of Human services at that time, Mr. Joe Hockey, took a lead role in setting out these priorities (Howard, 2004). Audit Process As a way of assessing the performance of Centrelink against its goals, a balanced scoreboard method was adopted by the board. Table 1 in the appendix presents an example of a balance score card from an audit process. This became the main tool for performance management as well as an instrument for accountability and for tracking the performance of Centrelink towards attaining its goals. In this case, performance was directly measured against the goals. As an agency of the public service, Centerelink was the focus of the early investigation of Auditor General. The report given by ANAO gave third party support to the administration of Centrelink. The development of a customer Relations Unit in each of Centrelink’s office allowed customers to air out their various grievances, complains and ideas (ANAO, 2002a). The complaints were received by the Ombudsman, who then referred most of them to Centrelink for them to be solved (Halligan, 2008). Framework for Evaluation The main task that centrelink aims to attain is that of service delivery. There are four main frameworks that can be used to evaluate the various benefits and risks related to the reform. This paper will look and use only three of the frameworks. The frameworks can also serve the purpose of assessing the functioning of the organization which will then form a basis for identifying the various positive impacts as well as risks (Halligan, 2004). The first framework is that of politics/ politicians and emanates from being subject to the ministerial- direction, which be direct or indirect, despite the fact that it operates under special arrangements by and from the government. It is a requirement that centrelink act in adherence to the top bottom kind of authority association with government agendas and ministers as well as function as an organization within the public service and that is subject to the legislation of the public service as a legal or constitutional agency. This framework evaluates on the basis of convectional ideas related to responsible form of governance (Aucoin et al., 2004). Another important and second framework is that which regards Centrelink as a service provider and agent within a purchase provider relationship whereby, it is projected to act in ways that are quasi contractual. Here, the organization’s operations are built on the basis of existing relationships with the various client departments that entail the buyers of the various services provided. A strong association exists between the organization and the new form of public management, like in the case of contractualism and disaggregation, though this is highly influenced by the theory of principle agent and most especially the executive agencies theory (Halligan, 2008). The third framework looks at Centerlink as an organization that is customer driven and that responds to the various and specific needs of its customers meaning that it is driven by promotion of customer satisfaction and establishing good relationships with its clients. Conducting surveys and placing benchmarks are two major ways through which feedback to assess the organizations progress in terms of ensuing customer satisfaction is obtained. The assessment is important in such a way that it allows for realignment and progress within the firm. Analysis Each of the three frame works above is very essential in understanding the empowering legislation of the Centrelink. All of the frameworks have differing external drivers which include customers, politicians and service provision. They signify a top bottom form of authority, contractual relationships as well as pressures that are environmentally friendly and that are from quasi markets where choice operates (Halligan, 1998). Another form of benefit is evident in such a way that a given public- sector agency operating within the central public –service is under the central agencies’ administrative requirements and budgetary. Such agencies include the Department of Finance and Administration and others like the Ombudsman, parliament and the Auditor General whose focus is on external accountability. Such a large agency and that has extensive interactions with the people faces constant scrutiny from different external organizations (Hulligan, 2008). Australia’s centrelink was started as a versatile delivery agency to deliver services to various purchasing departments, Centrelink services that is: unemployment and social security account about 30% to the commonwealth budget. The experiment differs from the” strict agency model” which was trendy in the 90s which associates an organization to a specialized function, these has attracted attention internationally (Scott 1999). Centrelink has been identified as being a risk, through the frameworks related to purchase provider and customer service where the major agreement is on the maintenance of accountability. The agency is exposed to many challenges both internal and external. One of the major challenge involved ensuring that the rules, policies and directions set out by the government were fulfilled and that everything was done in accordance with the law. Other challenges included difficulties in ensuring that all stakeholders effectively worked together, enhancing the unification of the different cultures from the different staff members to make up one common culture, maintaining quality services to customers and gradual minimization of risks and building on successes (ANAO 1997b). In the earlier years, significant tensions in the relationships are seen as we look across Centrelink’s life. Questions from the early stages were understood in the conditions of partnerships although the source of the relationship operated and was defined in the Formal purchaser-providers conditions. Partnership conception has obtained more centrally over time. In 1999, the official view was that the relationship was that of ‘purchaser-provider’ through which both organizations decided to operationalize “through a partnership” (Rowlands 1999). However, continuous problems arose from the shared concern and the middle ground competition that the two organizations were either caught up in their roles or inadequately engaged in the each others key responsibilities. The existence of conflicting approaches towards a particular reform or model in an organization has been found to bring out effects that are unexpected. There have been attempts to resolve a part of the conflicts (sharper) that have arisen from the three of Centrelink’s frameworks while others have remained unresolved. Other than the framework’s internal constituency difficulties, conflicts between the frameworks have continuously been centered on the various expectations that fall under the political framework and the ones under entrepreneurial and contractual frameworks (Mulgan, 2002). It was alleged that the tension was creative and bearable although it turned out to be destructive during the 1990s. The model transferred them to a partnership which is underpinned by the constituents of purchaser provider, from being a pure purchaser provider (Halligan, 2008). The business partnership agreement where the official views are expressed involving the FaCS and the Centrelink states that the relationship had grown to a dynamic and mutually beneficial organization which is quite a unique arrangement over the four year phase. This unique relationship blends the elements of partnership, alliance purchaser responsibilities and (DFaCS 2001). This was different from the relationship where movements were geared towards attaining a partnership that is more mature though on the other hand this was yet to be attained and was highly destabilized by the continuous arguments related to the funding for service delivery (Rowlands, 2000). Centrelink as the government’s key agency oversees the workfare, more so in the job market where it is the main gateway. In 1941, it was first set up as a department in social security and later on changed to centrelink. It is the Federal Government’s main “service delivery agency” a one stop shop that provides services for a group of the government departments on contractual basis (Rowlands, 1999). Centrelink establishes who is entitled to the social assistance and also the conditions attached to the forms of social assistance (Rosalky, 2002). Social workers have been employed by Centrelink in the last 60 years; currently the social workers are roughly 600 of who a considerable number is in the management positions whereas others are in the social work related positions (Centrelink, 2006). This agency offers referrals, where appropriate, to the “job network agencies”, it is highly technologized and services are provided through call centers, the web and also computers. Lessons Drawn In the mid 1990s Centrelink was a product, at that time, an organization came up as a result of combining opportunities, personalities and agendas with the voting in of a new government committed to cut backs and the rationalization. While answers to the departmental problems of confronting the reformist government were continually sought, the existing policy alternatives were now more concrete (Kingdom 1997). A different organization from the other well known international experiments with the executive agencies came up out of the convergence of the options. In the course of formulating acceptable options by the government, there were containments of freedom of choice by the reformers preferences and the government agenda which reflected the existing institutions (Hood, 1994). However, the conditions were adequately favorable for a breakthrough to happen in the organization (Brunsson and Olsen 1993). It is at this point that a basis for the debates concerning the responsibility of the provider agency and also the purchasing department were put down, by combining the models that would be recognized in the “centrelink’s organizational” imperatives. There are varying interpretations concerning the importance of managerial dimensions and political dimensions which is expressed through partnerships, political direction and purchase provider principles. The earlier differentiated models are still relevant and contribute largely to Centrelink’s environment ambiguity. Attempts have been made to mitigate Centrelink’s environmental ambiguity by reworking the key features of those models. Other productive relationships have been facilitated as a result of emphasizing more on partnership. However some structural features in the original plan of Centrelink imply that there will be continuity of tensions and much energy will have to be directed through the creative possibilities into working. Conclusion From the above discussion, Centrelink can be seen as an agency that focuses on enhancing effective service delivery. The agency’s role and functioning, has been deeply brought out by three main frameworks. The three frameworks identify Centrelink as being customer driven, as an organization that operates under the principles of purchase provider hence expected to in ways that are quasi contractual and in terms of politics whereby it still functions under political directives. The frameworks have been identified as an effective way of assessing and understanding existing conflicts between the values and priorities at Centrelink. Though beneficial, these frameworks or models have been found to conflict with one another. The main question is hereby how Centrelink was able to meet the many presented demands and with the existing conflict. The organization has managed to successfully solve the existing tensions while others are still being worked out. Reworking the main features of he laid out frameworks has been used as one strategy of reducing the existing conflicts and ambiguity within the agency. Annotated Bibliography “Aucoin, Peter, Smith, Jennifer and Dinsdale, Geoff (2004) Responsible Government: Clarifying essentials, dispelling myths and exploring change. Ottawa: Canadian Centre for Management Development.” This source presents a true meaning for what responsible and effective governance with focus being on the existing myths related to governance and that need clarification. In the above report, this source has been effective in explaining the role of centrelink in relation to the government agendas and ministers. It clearly brings out the political model or framework in evaluating centrelink. Australian National Audit Office (ANAO) (1997b) Management of the implementation of the Commonwealth services delivery arrangements, Audit Report 18, 1997–98. This report focuses on common service delivery for commonwealth. It analyses on the various challenges facing the implementation of the Centrelink experiment bringing out the risks associate with the implementation process. “Australian National Audit Office (ANAO) 2002a, Centrelink’s balanced scorecard, Audit Report 9, 2002–03. Canberra: Australian National Audit Office.” This report was as presented by the Australian National Audit Office presents results from an audit or assessment done on the implementation of the centrelink experiment and that measured performance against the set goals for the agency. The report has been effective in explaining the audit process used by the agency to measure its performance. “Brunsson, Nils & Olsen, Johan (1993) The Reforming Organization. Norway: Fagbokforlaget.” This source has been used in this report to bring out Centrelink as an agency of service delivery and that focuses on meeting customer needs. Information from this source has been used to analyze on the three frameworks used in describing the Centrelink experiment as well as in making a conclusion. “Centrelink (2006). Centrelink Annual Report 2005–2006. Caberra: Commonwealth of Australia.” This yearly report presents the performance of Centrelink during the fiscal year 2005-2006.the report analyses the performance of the agency during that particular year and brings out comprehensive findings through which other decisions can be made. The report has been used in this report as evidence for the agency’s composition in terms of number of employees as well as their various roles and responsibilities. “Department of Family and Community Services (DFaCS) ( 2001) Australians Working Together—Helping people to move forward. Canberra: Department of Family and Community Services.” This is yet another report from the Department of Family and Community Services and that focuses on the working culture of Australians as one with an aim of promoting development. It is through this source that a clear understanding of the purchase provider model and the existing partnership, the conflicts arising from this model and the benefits of having Centrelink as a purchase provider agency. “Halligan, John (1998) Agencification: A Review of the Models, Lessons and Issues. Tokyo: Institute of Administrative Management.” This study report reviews different reforms and draws lessons from the process planning and implementation of the reforms with the main focus being on Japan. It is from the report that I have obtained important information on centrelink as an agency and the various models, issues and lessons related to the related reforms. “Halligan, John (2004) ‘The quasi-autonomous agency in an ambiguous environment: the Centrelink case’. Public Administration and Development, 147–56.” This is yet another report that analyses the Centrelink as an agency that is quasi autonomous and that has been useful in bringing out this concept within this report. The source has best been used in creating a better understanding of the frameworks or models for evaluating Centrelink. “Halligan, John (2008) The Centrelink Experiment Innovation in service delivery. Canberra: The Australian National University.” This is comprehensive report presented from a study on the Centrelink experiment. The source explores on Centrelink, its planning, implementation and progress. Basically, it analyses the life and performance of the agency and presents all necessary information regarding it. The source has served as key in writing out this report as it has acted as a basis through which the Centrelink experiment has been analyzed and its risks and benefits identified. Hickey, Paul (2004) Centrelink service delivery. Paper presented to the Guiding Coalition, 12– 13 May. This paper focuses on Centrelink as an agency focusing on service delivery. It has especially been useful in providing information on Centrelink’s second phase reform process. Hood, C. (1994) Explaining Economic Policy Reversals. Buckingham: Open University Press. Hood in this book looks at policies related to the economy. He assesses on the existing gaps between the expected benefits associated with these policies and what the policies have actually attained. The author looks at the Centrelink as an agency playing an economic role through its reforms. Hughes, O. (1998) Australian Politics. Melbourne: Macmillan Pub. In this book, the author brings out deep issues on the politics of Australia and the role this has had on the reform process. “Kingdon, John (1997) Agendas, Alternatives, and Public Policies. 2nd edition, Boston: Little Brown and Co.” The author in this book analyses on the different public policies. It is from his analysis that information for this study has been obtained and used to develop a conclusion for the paper. “Mulgan, Richard (2002) ‘Public Accountability of Provider Agencies: the Case of the Australian “Centrelink”’, International Review of Administrative Sciences, 68 (1):45-59.” This journal article focuses on the audit processes within the various provider agencies and has been useful in giving insight on Centrelink’s process of public accountability. “Pollitt, Christopher (2000) The Idea of Agency: Researching the agencification of the (public service) world. Paper presented to the American Political Studies Association Conference, Washington DC, August.” In this paper, the author explores on the performance of Centrelink as an agency within the public service. “Rosalky, David (2002) Ministers, Secretaries and Boards: A Perspective from a Seat on the Centrelink Board. Paper, 7.” This source is a paper presented by the centrelink board and that has been helpful in analysing Centrelink as the government’s key agency. Rowlands, D. (1999) ‘Institutional change in the APS – the case of DSS and Centrelink’, Australian Social Policy 1999 (1), 183-201. Here Rowland places a specific interest on occurring changes in Centrelink and critically assesses the relate roles and impacts within the agency. “Rowlands, David (2000) ‘Purchaser-provider in social policy delivery: How can we evaluate the Centrelink arrangements?’ Australian Social Policy 2000/01 Department of Family & Community Services, 69-87.” This policy report has been helpful in analysing centrelink in terms of the purchaser provider framework. “Rowlands, David (2002) Agencification in the Australian Public Service: The Case of Centrelink. Unpublished study.” This has been used in providing more information and creating a greater understanding on the role and performance of centrelink. “Scott, E. (1999) Centrelink: A Service Delivery Agency in Australia. Kennedy School of Government Case Program C16-99-124.0, Cambridge, Massachusetts: Harvard University.” This source has been used in different parts of this report to bring out Centrelink as an agency of service delivery. Information from this source has been used to analyse on the three frameworks used in describing the Centrelink experiment. “Vardon, Sue (2000) ‘Centrelink: A three-stage evolution’ in Gwynneth Singleton (ed.) The Howard Government: Australian Commonwealth Administration 1996-1998, Sydney: University of New South Wales Press, 96-107.” This is a book written by the Centrelink’s CEO beginning the year 1996. It therefore presents first hand information on the agency, its implementation and performance. References Aucoin, Peter, Smith, Jennifer and Dinsdale, Geoff (2004) Responsible Government: Clarifying essentials, dispelling myths and exploring change. Ottawa: Canadian Centre for Management Development. Australian National Audit Office (ANAO) (1997b) Management of the implementation of the Commonwealth services delivery arrangements, Audit Report 18, 1997–98. Australian National Audit Office (ANAO) (2002a) Centrelink’s balanced scorecard, Audit Report 9, 2002–03. Canberra: Australian National Audit Office. Brunsson, Nils & Olsen, Johan (1993) The Reforming Organization. Norway: Fagbokforlaget. Centrelink (2006) Centrelink Annual Report 2005–2006. Canberra: Commonwealth of Australia. Department of Family and Community Services (DFaCS) ( 2001) Australians Working Together—Helping people to move forward. Canberra: Department of Family and Community Services. Halligan, John (1998) Agencification: A Review of the Models, Lessons and Issues. Tokyo : Institute of Administrative Management. Halligan, John (2004) ‘The quasi-autonomous agency in an ambiguous environment: the Centrelink case’. Public Administration and Development, 147–56. Halligan, John (2008) The Centrelink Experiment Innovation in service delivery. Canberra: The Australian National University. Hickey, Paul (2004) Centrelink service delivery. Paper presented to the Guiding Coalition, 12– 13 May. Hood, C. (1994) Explaining Economic Policy Reversals. Buckingham: Open University Press. Hughes, O. (1998) Australian Politics. Melbourne: Macmillan Pub. Kingdon, John (1997) Agendas, Alternatives, and Public Policies. 2nd edition, Boston: Little Brown and Co. Mulgan, Richard (2002) ‘Public Accountability of Provider Agencies: the Case of the Australian Centrelink’. International Review of Administrative Sciences, 68 (1): 45-59. Pollitt, Christopher (2000) The Idea of Agency: Researching the agencification of the (public service) world. Paper presented to the American Political Studies Association Conference, Washington DC. Rosalky, David (2002) ‘Ministers, Secretaries and Boards: A Perspective from a Seat on the Centrelink Board’. Paper, 7. Rowlands, D. (1999) ‘Institutional change in the APS – the case of DSS and Centrelink’, Australian Social Policy 1999 (1), 183-201. Rowlands, David (2000) ‘Purchaser-provider in social policy delivery: How can we evaluate the Centrelink arrangements?’ Australian Social Policy 2000/01 Department of Family & Community Services, 69-87. Rowlands, David (2002) Agencification in the Australian Public Service: The Case of Centrelink. Unpublished study. Scott, E. (1999) Centrelink: A Service Delivery Agency in Australia. Cambridge, Massachusetts: Kennedy School of Government Case Program Harvard University. Vardon, Sue (2000) ‘Centrelink: A three-stage evolution’ in Gwynneth Singleton (ed.) The Howard Government: Australian Commonwealth Administration 1996-1998.Sydney: University of New South Wales Press. Appendix Table 1: Balance Scorecard for Centrelink Source: Halligan, 2008 Figure 1: Business Model for Centrelink Source: Halligan, 2008. Chronology Date Event Significance Comment 1996 Sue Vardon becomes CEO Had the responsibility of overseeing the control and administration of the daily operations at centrelink (Vardon,2000). Has been significant in the implementation of welfare reforms (Halligan, 2008). 1997 Introduction, planning and implementation of Dole program Allowed for the involvement of community members in the projects to provide work experience useful for later employment (Halligan, 2008). An effective way of reducing unemployment while enhancing community participation and development at the same time. July 1998 Introduction of Youth Allowance Provided a source of income for the unemployed youths and for students (Halligan, 2008). Benefited many though the selection criteria for the eligible youths and students on the basis of parents’ income excluded some. May 1998 Introduction of the Job Network Helped improve the placement system for those without jobs (Halligan, 2008). Was an effective step towards creating employment opportunities for all. July 1998 Introduction of the mutual- obligation policies Ensured that even the unemployed contributed towards the community, were more focused, self reliant, responsible and more reliant (Halligan, 2008). Taking in the various part time jobs and projects was an effective way of enhancing their growth personally and professionally. 1999 to 2000 Introduction of the welfare review. Entailed principles related to: promoting sustainability, equality and transparency, capacity building and self reliance, active participation in community development, improved benefits for the employed students and trainees (Halligan, 2008). Was an effective way of improving the living standards of people. July 2000 Introduction of family assistance reforms Families with low income were given support through tax and social security systems whereby the families received benefits from the government through centrelink. Another effective way of improving service delivery for all. May 2001 Government implements the welfare reform through the Australians Working Together program. A way of enhancing community members’ involvement in their communities. Created a balance between obligations, incentives and welfare assistance (Halligan, 2008). Helped promote self reliance among community members. Specific needs of members were identified more effectively for relevant solutions to be made. December 2004 Sue Vardon seizes to be CEO This marked a turn in the process of administration for the agency. Convectional method of public administration adopted. October 2004- October 2005 Second phase structure reform New strategies set out Internal restructuring of the agency The strategies and restructuring was done as a step towards creating a statutory- agency (Howard, 2004). October 2005- December 2006 Centrelink works towards attaining its set out priorities on service delivery. This included: Improving accountability Enhancing clients movement from Centrelink agency to the Job-network Enhancing customer oriented network of participation within all government agencies (Hughes, 1998). This was done under the administration of Joe Hockey who was the minister in charge of Human Services Read More