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Shergold: Let Outsourcing Suppliers “do it their own way”

by Chris Huckstepp •
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Peter Shergold, the high profile Howard-era public servant, has told the Australian Financial Review that government outsourcing models have failed to encourage innovation.   

He argues that:

  • Focus should be shifted towards outcomes, and industry should be given greater responsibility to design;
  • Outsourcing by Human Services to Not-for-Profit organisations has led to better value and higher service standards, but still hasn’t encouraged co-design or maximised shared use of knowledge.

Shergold suggests that governments step back, “say we’re going to focus on outcomes, we are going to commission delivery but we’re going to let different organisations do it their own way.”

“More than that. . .we’re going to let them help co-design the program. Not just assume that we’ve got all the knowledge in the public service.”

Nevertheless, Shergold is optimistic about a ‘second wave of reform’, citing outsourcing of care services to Not-for-Profits, especially by Human Services.

“On the whole you’ve got better value for money. It has been delivered at lower cost and with higher service ­standards. The trouble is, until now – and I was a part of this – it has been almost entirely transactional. It’s been a contracted relationship. So the government decides on programs and then we go out to tender.”


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