Efficiency through Contestability Programme – Contestability Reviews
This fact sheet describes Contestability Reviews and provides an overview of their purpose and intended impact. In the 2014-15 Budget, the Government introduced a Commonwealth-wide Contestability Framework to be applied through the Efficiency through Contestability Programme (the Programme) led by the Department of Finance (Finance). The Programme aims to simultaneously reduce costs, and meet the Australian community’s increasing demand for better quality government services. To do this, it is important to ensure that government functions are undertaken by the organisations most efficiently and effectively able to do so. In 2015-17, Commonwealth entities will apply contestability and competition in a phased programme of Portfolio Stocktakes, Contestability Reviews and Functional and Efficiency Reviews.
Contestability Reviews Contestability Reviews provide an opportunity to consider whether identified functions can be improved through delivery by alternative means. In conducting Contestability Reviews, entities will play a leading role in exploring how government functions can be delivered more efficiently, effectively and innovatively.
Contestability Reviews will look at specific functions and consider: the objective of the function, how it is currently provided, and the associated costs what other alternative approaches are available (including provision by other organisations, and approaches that improve the efficiency of the current provider) the costs, benefits, risks and any other considerations for each alternative. Any reasonable scope for change may be explored, such as removing existing barriers to efficiency or exploring innovative approaches (such as payment by outcomes) in order to achieve government priorities. Functions that exist across one or more entities may also be subject to Contestability Reviews, providing the opportunity to consider greater efficiency for whole-of-government outcomes. Contestability Reviews will identify and recommend the most efficient approach to providing the function, including a proposed implementation plan.
What is Contestability? The prospect of competition in public sector activities, to motivate efficiency and performance improvements in policy, programme and service delivery.
Contestability Review Key Steps The Reviews will be conducted in a staged process. These are: 1. Scope Select a Review Leader for the entity Confirm Terms of Reference with Finance and the Contestability Programme Steering Committee (CPSC). 2. Analyse Consider and select alternative approaches for the function from the spectrum of contestability. 3. Assess Options Assess the shortlist of viable alternative approaches for contestable provision including:
Risks and opportunities Costs and benefits (theoretical and practical) Assess market maturity Consult with stakeholders.
4. Recommend Actions Analyse implementation and management of the recommended alternative approach/es over the short, medium and long term. Identify the best alternative approach/es and make recommendations about potential implementation. 5. Submit Submit a draft report to Finance to confirm it complies with the Terms of Reference and Contestability Framework and is sufficiently rigorous.
Conducting a Review does not imply that a function will necessarily be modified or that it will be transferred outside of government. Instead, a Review should consider how the functions can be delivered most efficiently in the future. This will require considering whether functions need to move from within to beyond the boundary of government.
Roles and Responsibilities Entities will be responsible for the conduct of Contestability Reviews. A lead entity will be determined where a Review covers multiple entities. Entities are to nominate a Contestability Review Leader, usually a senior executive, to be responsible for the conduct of the Review and for liaison purposes. Finance will provide an assurance and support role to entities conducting Contestability Reviews. Governance for each Contestability Review will be provided by the CPSC. The CPSC consists of First Assistant Secretaries from four departments and is chaired by Finance. The CPSC will assess the Review to ensure it meets the required standards in line with the Terms of Reference, the Contestability Programme Guidelines and its analysis is robust and sound.
Submit the final report to the CPSC, and in turn, to the Finance Minister.
The Finance Minister and relevant Ministers will receive advice from the CPSC about the Contestability Review and its recommendations. Depending on the Review’s recommendations, subsequent action may be required to agree and implement the recommendations.
6. Implementation Pending approval from the Government, implement the Contestability Review’s recommendations.
For more information about the Contestability Programme W: http://www.finance.gov.au/resourcemanagement/governance/contestability/ E: [email protected]
T: 02 6215 2991