by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
Public Sector Informant : PSI
[MAY 2010] 8 THE PUBLIC SECTOR INFORMANT [PUBLIC A DMINISTRATION:RICHARD M ULGAN] A pointless sacrifice to feed the sharks The Hawke report The insulation scandal failed to answer who is responsible for whole-of-government initiatives The design faults, as Hawke makes clear, were almost entirely due to the speed with which the insulation program was rolled out. Equally clearly, the pressure for speedy implementation came from outside the department After the sensationalised media coverage, Allan Hawke's review of the Home Insulation Prog- ram, published last month, helps put the program in a more balanced perspective. As one would expect from an experienced and respected former departmental secretary, Hawke clearly puts his finger on the key causes of failure, while giving due credit to those who strove conscientiously to make the program succeed. Much of his analy- sis, he freely admits, can be seen as being wise after the event, when factors that were far from clear at the time now emerge as critically import- ant. But wisdom after the event is much better than no wisdom at all. Hawke's account will provide an excellent basis for studying what will become a classic case study in policy failure. The Home Insulation Program had two main objectives: to generate economic stimulus, by supporting small businesses and providing jobs for the unskilled and unemployed, and to improve the energy efficiency of homes. How far the program was successful in achieving these outcom- es is beyond the scope of the report. But Hawke does note that a large number of people were employed under the scheme before it was axed. He also points to the possible long- term energy-efficiency benefits that the insulation will produce, though that result will be partially comprom- ised by the poor quality of some of the installation work and materials (let alone the ultimate cost). The more immediate failure, and the reason for axing the program, lay in the four deaths and numerous fires and fire-risks that were associated with the program. Hawke rightly reserves judgment on the causes of the deaths, which are subject to police and coronial inquiries. He notes that ''political wrangling'' has ''over- shadowed the duty of care of em- ployers'' but does not question that government actions also helped cause the loss of life and property. A number of administrative deci- sions taken by the Department of Environment, Water, Heritage and the Arts contributed to the failure. The department eventually settled on a business model designed to save time and reduce red tape. The Government would not enter into contracts with insulators, the more normal model of government pro- vision, but would instead refund insulators directly, using the Medi- care network. Insulators would need to register but, on a self-assessment system, initially without providing evidence of qualifications or training. Checking for satisfactory compliance would not be a condition of payment but, as with other Medicare refunds and tax returns, would be post hoc and by assurance sampling. The streamlined business plan meant that state and territory govern- ments were bypassed in the adminis- tration of the program, even though they had the main responsibility for safety and OH&S standards. The appointment process for a com- pliance and audit contractor was drawn out, meaning that the full compliance and audit system was not operating until three months after scheme was up and running. Even after the compliance and audit system was in place, it was swamped by the unexpectedly high level of completed insulations. The department was clearly taken by surprise by the enormous demand for the program. Indeed, the risk assessment provided by Minter Elli- son seems to have given more weight to the dangers of insufficient take-up rather than of over-subscription. Moreover, the details of the scheme were constantly evolving, as the department responded to complaints and suggestions. As a result, the level of departmental resources initially allocated to the program proved inadequate. Officers were over- stretched by the problems of dealing with a complicated, rapidly changing and massively popular scheme. For example, it was not until November 2009, five months after the program began operating, that a deputy sec- retary was assigned full-time res- ponsibility for energy efficiency (an arrangement that, in hindsight, should have been made much earlier, Hawke says). Also notable is the significant role played by consultants in both plan- ning and implementing the program: Minister Ellison for risk assessment, KPMG for the business model design, Protiviti and Pricewaterhou- seCoopers for compliance and audit, Ernst & Young for a fraud control plan and Datacom for call-centre facilities. Reliance on outside exper- tise was inevitable for a program that was beyond the department's existing resources. Hawke does not comment on whether the extensive use of consultants hindered the depart- ment's capacity to exercise control over a quickly evolving and danger- ous situation. In spite of the obvious shortcom- ings, Hawke finds some features to commend in the department's approach to administering the program. The supervising committee, the project control group, was well constituted, chaired by the Environ- ment Department and with represen- tatives from the office of the coordinator-general in the Depart- ment of the Prime Minister and
PSI - September