Lessons from a land down under…

For starters, Moran explained, the Australian economy is doing really rather well – at least on conventional measures - with growth of 4%+ and a looming budget surplus. Nonetheless, the population was still grumpy and distrustful of its politicians and official policy makers, despite a deep and enduring attachment to state solutions. First, the Australians had aimed to attract real talent into the public service- and were prepared to pay top dollar. The day after Gus O’Donnell had used his maiden Lords speech to call for better pay for Treasury officials, he heard Terry Moran explain how the Australians had agreed to move to almost “Singaporean” levels of pay for top officials. The secretary of PM&C – the equivalent of cabinet secretary – will see their pay rise over the next three years from AUD 625,000 to AUD 825,000. At current exchange rates that is well over £500,000 – double the rate Gus earned (the Cabinet Office website has yet to update for the new top team) – and well ahead not just of the UK prime minister but almost double what the Australian prime minister is paid. Second, many of the most successful people at the top of the Australian public service had come in from outside. This was a big contrast to the UK where Gus revealed that senior external recruits, usually into professional specialisms like HR and finance, underperformed compared to those who had been brought up in the system. One difference could lie in the way in which the Australians brought people in – “laundered” into the system, by being given a non-line management function during a managed transition and brought in lower down the organisation before being given a management role and then accelerated upward. Moran said he thought the recent Australian reform of public hospitals could not have been done by a traditional civil servant. They would have been too tied down in the legal niceties and detail – and lost sight of the strategic objectives. But third, there was a growing fissure between ministers and their departments. The numbers of political advisers had swollen – so there were now 500 working in Canberra. And whereas earlier ministers had civil servants in their private offices, and desks in their departments, that was increasingly rare. And that in turn blurred ministerial responsibility – since it was never clear what messages from the department had penetrated through the adviser wall – and which hadn’t. Both agreed that they would like to see more direct accountability of civil servants to Parliament – but whereas Moran thought that many civil servants were in practice responsible now, Gus thought there were too many grey areas between ministers and officials to make this work yet in the UK. Personal accountability could only come with a clearer demarcation of responsibility – an issue that had been ducked in the public body reform with too many “quasi-independent” bodies. But perhaps the biggest contrast came not in what the two public service leaders said but in what they had done. Gus arrived as cabinet secretary through the classic UK route of HM Treasury and No.10 with no wider Whitehall or outside experience. Moran said his career highlight was using management information to raise standards in an underperforming public service (something we pointed out most UK permanent secretaries have little experience of), and leading reforms to change the financial relationships between national and state governments. He was asked to go to back to Canberra by Kevin Rudd on the back of his track record of introducing reform in Victoria. At least lower salaries in the UK mean we can afford two people – Sir Bob Kerslake and Sir Jeremy Heywood – to match that range of experience in the top job.