The Spectrum of Contestability Spectrum of Contestability Approaches Many people incorrectly presume that contestability and competition equates with System Improvement outsourcing. However, contestability is based on research and experience which Improve structures e.g. flatter, less shows that even the credible threat of hierarchical structures, shared service competition from potential providers is arrangements sufficient to motivate public sector providers Improve processes e.g. streamline to perform better – at potentially a lower reporting requirements, joined up cost. government Within contestability there are a range of Improve requirements e.g. reduce alternative approaches, including unnecessary red tape/regulations cooperative and competitive arrangements, Improve products or services e.g. adopt to consider and pursue. Contestability user-centric design, move to digital approaches range from improving internal solutions available 24/7 processes; partnering with, or transferring functions to other organisations inside or Engagement Improvement outside of government; through to Improved government relations e.g. fundamentally restructuring how the shared footprint, integrated services function is achieved. Improved contractual practices e.g. The Evolving Role of Government payment by outcomes Innovative public investment strategies The role of government is changing from a e.g. social investment bonds time when a government entity was solely responsible for the design and delivery of the Develop behavioural and policy services it was responsible for. incentives to promote higher compliance or take-up of government initiatives Increasingly, governments are adopting ‘hybrid’ delivery models with greater Market Improvement involvement from other service providers drawn from other levels of government Build a market (including state and local government) and Partner with others e.g. Public Private the private and not-for-profit sectors. Partnerships, cross-sectoral alliances Adapting to the new service delivery models Government Business Enterprise available requires a shift in the government’s Mutualise traditional role of funder and provider (or Privatise procurer) of services, to a new role as and regulator of a transaction Outsource environment between clients, government, and service providers. It is recognised that changing to new models involving arrangements may require new For more information about the regulatory and policy structures. Contestability Programme W: E: T: 02 6215 2991
The Spectrum of Contestability Many people incorrectly presume that contestability and competition equates with outsourcing. However, contestability is based on research and experience which shows that even the credible threat of competition from potential providers is sufficient to motivate public sector providers to perform better – at potentially a lower cost. Within contestability there are a range of alternative approaches, including cooperative and competitive arrangements, to consider and pursue. Contestability approaches range from improving internal processes; partnering with, or transferring functions to other organisations inside or outside of government; through to fundamentally restructuring how the function is achieved. The Evolving Role of Government The role of government is changing from a time when a government entity was solely responsible for the design and delivery of the services it was responsible for. Increasingly, governments are adopting ‘hybrid’ delivery models with greater involvement from other service providers drawn from other levels of government (including state and local government) and the private and not-for-profit sectors. Adapting to the new service delivery models available requires a shift in the government’s traditional role of funder and provider (or procurer) of services, to a new role as and regulator of a transaction environment between clients, government, and service providers. It is recognised that changing to new models involving arrangements may require new regulatory and policy structures. Spectrum of Contestability Approaches System Improvement Improve structures e.g. flatter, less hierarchical structures, shared service arrangements Improve processes e.g. streamline reporting requirements, joined up government Improve requirements e.g. reduce unnecessary red tape/regulations Improve products or services e.g. adopt user-centric design, move to digital solutions available 24/7 Engagement Improvement Improved government relations e.g. shared footprint, integrated services Improved contractual practices e.g. payment by outcomes Innovative public investment strategies e.g. social investment bonds Develop behavioural and policy incentives to promote higher compliance or take-up of government initiatives Market Improvement Build a market Partner with others e.g. Public Private Partnerships, cross-sectoral alliances Government Business Enterprise Mutualise Privatise Outsource For more information about the Contestability Programme W: E: T: 02 6215 2991