Governments have huge budgets and an ongoing challenge is to ensure that the greatest possible value from spend is being created for tax payers and the community more generally. There are timeless philosophical debates around the role of government but fundamentally we should all agree that if money is going to be spent it should be spent so we are all getting the best possible bang from our tax buck.
Business cases, cabinet submissions and budget bids are key tools through which governments can make the case for investment. These tools are supposed to be the ‘check’ and screen to ensure that taxpayers and the community are gaining greatest possible value for money. Unfortunately these tools and the processes around them can drive the wrong behaviour from both the public servants trying to build the case and the consultants who are often engaged to write the business cases. There are a number of critical factors that need to be considered if we are going to drive a more value and outcome focused approach to government investment.
- Remove the politicisation of investments – many of the business cases and budget bids on which I have worked have already been decided before a sound investment case has been developed. This means that government business cases are often the justification for a political decision rather that for a sound investment decision. In a State like South Australia, where our economy is in very poor shape, the impact of more independent, commercial, strategic investment decisions could be game changing.
- Improve capabilities – there are critical gaps in both the government and consultancies regarding commercial acumen and systems thinking which means that the focus of business cases is often highly technical and miss the point in terms of the value that could be generated by viewing things through a more commercial and holistic lens. What would you do if this was your money is a key mantra when working through investment decisions in an objective and outcome driven manner.
- Develop a longer-term, strategic approach to investments – major investment decisions should be part of a strategic, planned process, not undertaken reactively. Many of the public servants with whom I have worked are highly critical of how investments are approached however do not feel empowered to change this. Having longer-term, strategic plans and a more independent system of review of major investments that enables the screening of ideas long before they get to budget submission or business case development, is critical to changing this.
- Clearly define investment logic – often broader government visions and growth objectives, such as “create jobs and export growth”, are so high-level that there is no real framework for guiding idea commercialisation and investment decisions. Developing a sound investment logic, through which major investments are framed and screened, would greatly enhance the quality of ideas and projects developed and business cases put up for investment. The investment logic should be created collaboratively at the very initial stages of idea / project development, and alignment within and across agencies should be gained long before the commencement of the writing of a business case (particularly if consultants are doing the business case writing as if there is not a clear investment logic this is likely to lead to plenty of variations).
- Be open with external stakeholders early on – governments often do not engage with external stakeholders at the very initial, concept design stage of potential projects for fear that if expectations are not met, projects are not funded, or issues arise, there could be political fall-out. As a result many projects and investment ideas are developed in a vacuum – without the critical collaboration that must occur to generate innovative thinking and solutions that actually meet industry or community needs. This often leads to a flawed design, misaligned objectives with key partners and wasted time and energy because significant investment is required at later stages of the process to fix design. This lack of openness and engagement with external stakeholders also leads to stakeholder and community frustration and disillusionment.
- Improving collaboration – whether it is internally, across agencies, with potential suppliers, or with external stakeholders, there is a huge opportunity for government to become more open and collaborative. Critical to this is freeing up the energy and time of public servants to invest in effective communication and collaboration by ensuring they have adequate timeframes, are not pulled from pillar to post based on short-term political interests, and have the authority to take ownership and make decisions.
Many of the obstacles mentioned above require a significant mind-set shift and cultural change by both the public and private sectors. To move forward we shouldn’t focus on allocating blame for why things aren’t working but rather should look at how we can work together and shift to much more outcome focused thinking.