'Eroding' APSC forks out $1m to private contractors for public service hierarchy review

Decades of public sector bargaining has resulted in inconsistencies over pay and responsibilities between the departments and agencies, triggering the need for a system overhaul.

The Australian Public Service Commission announced in mid-March it was looking to undertake a review of the current system in order to "reduce hierarchy, improve decision-making, and bring the right APS expertise and resources".

It will include both SES and non-SES classifications.

The scope, however, does not extend to each classification's pay scales but the commission admitted future changes could not be ruled out but would depend on the review's recommendations.

"If the review panel recommends changes to the APS classification structure, remuneration would have to be considered in the implementation of any change and handled consistent with government policy," an APSC spokesperson said.

But the skills to deliver the review were also "unavailable within agency", according to a government contract notice.

The Nous Group, an international management consultancy firm, has instead been tapped on the shoulder to undertake the review, receiving $807,950 to complete the job until mid-August.

A draft report is expected to be delivered to public service commissioner Peter Woolcott by June 2021.

Two separate contracts, published in mid-March and totalling $114,000, were issued by the commission to gain specialised skills and independent assessment.

Labor spokesperson for the public service Senator Katy Gallagher said the nearly one-million dollar total was a large price to pay for a "basic" task and was evidence of the sector's deteriorating capability.

"Over the past eight years the Liberal government has eroded away internal departmental capacity and capability from the public service," Senator Gallagher said.

"This has been a deliberate strategy and has come with an enormous price-tag.

"We are now in the situation where departments like the APSC can't even do the most basic of tasks expected of them."

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Former senior public servant Professor Andrew Podger has also long argued the public service is in need of a large-scale review to address the discrepancies between pay and responsibilities across agencies and departments.

Analysis in March by The Canberra Times revealed the pay scales for some classifications had differences of nearly $30,000, which Professor Podger said was a result of an "artificial" system set by decades of bargaining.

An overall shift in the seniority of public service positions had also been a significant factor, he said.

"The huge change in the classification profile over the last 40 years raises important questions," Professor Podger said.

"In 1980, around three-quarters of the APS were at levels now comprising around 5 per cent of the APS; there has been a commensurate expansion at upper middle levels, and some expansion also towards the top.

"Hopefully, however, the review will provide further evidence as to why remuneration arrangements in the APS need to be fixed through closer linking to the market for different occupations and skills and not through so-called 'enterprise' bargaining and spurious agency-based productivity offsets."

The long-awaited Thodey review, published in December 2019, outlined the public service's capability was being held back by crowding at the top rungs among other challenges.

"Siloed approaches, rigid hierarchies, and traditional ways of working have created barriers to providing joined-up services and integrated policy advice, and to sharing data, information and resources to best delivering government priorities across agencies," the report read.

"[Change is needed] to empower people and [for] teams to deliver outcomes, not deal with process and hierarchy."

The public service commission has said it was too early to tell what the review will reveal but Professor Podger predicted it could result in a differentiating pay for those with specialist and professional skills.

"I am not sure a 'flatter' structure will emerge," Professor Podger said.

"Perhaps a tighter top tier [with] more responsibility for middle managers and more differentiation based on professional skills and experience."

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