Gov’t responds to Thodey review

The federal government has earmarked $15 million to pay for a rapid planning phase to transform the public sector as part of its response to the landmark Thodey review, with an urgent audit of government ICT capability to be conducted.

But it has rejected a recommendation to make the Digital Transformation Agency a standalone central department in the longer term, and has not committed to embed its decision-making authority in legislation.

Prime Minister Scott Morrison released the near-400 page Thodey review of the Australian Public Service, along with the government’s response to its 40 recommendations, on Friday morning.

The Coalition agreed in full to 15 recommendations, agreed in part to 20, noted two and rejected three outright.

Mr Morrison said the government had agreed with the majority of these recommendations which aim to ensure the APS remains “fit-for-purpose in the decades to come and provides a comprehensive platform for change”.

“The Australian government is not just guaranteeing but transforming the services Australians rely on – using digital technologies and data so Australians can access simple and reliable services, designed around their needs,” Mr Morrison said.

“The opportunities and challenges presented by technological, geopolitical and societal changes demand high quality, joined up policy advice to secure strong outcomes and enable Australians to plan for their future with confidence.”

The Secretaries Board has been tasked with undertaking a “rapid planning phase” at the start of next year, with $15.1 million in funding.

The Thodey review found that “substantive changes” were needed to address current issues in the APS and prepare it for the future, including “deep cultural change”.

It found that the APS was “ill-prepared to grasp the opportunities of the future” as a result of long-running under-investment in people, capital and digital capability.

The APS was at a “watershed” moment and the digital transformation plan is a “once in a generation opportunity”, the review found.

It included a number of recommendations focused on digital transformation, improving digital capability within the APS and the delivery of government services online.

The government has agreed to “urgently” conduct a comprehensive audit of all ICT budgets, expenditure, assets and systems be conducted to establish a baseline before any further reform is undertaken.

The last time such an effort was undertaken was in 2015-16, and there is now “no detailed inventory of the systems that exist across the APS, nor of associated risks, costs and upgrade needs”, the report found.

The audit aims to determine the current and forecast government ICT expenditure and assets, which systems were scheduled to be retired, as well as associated risks and future requirements.

“The audit is urgent and can realistically be completed within six months of being commissioned to enable prompt development of an ICT blueprint to guide investment in digital transformation,” the Thodey report said.

Following the audit, the government would then release a detailed whole-of-government blueprint for future investment in ICT.

Separate digital and data professions will be introduced to the APS in 2020, while the government has further committed to streamlining data sharing within the public service, and making data open by default.

The Thodey report also included a significant focus on strengthening the DTA’s role and handing it more authority over other departments and agencies when it comes to ICT projects.

“The DTA, while well placed in expertise, plays only an advisory role on investment proposals. The business-case process is arduous, favouring large capital projects and traditional waterfall delivery – which sets timeframe, product and deliverables from the outset,” it said.

“For DTA to properly fulfil its important role in Australia’s digital environment, it should be one of the first entities to undergo a capability review.”

It recommended that the DTA be given responsibility to advise on the prioritisation of digital investment and to monitor digital projects, capability and risks, and the authority to enforce Commonwealth digital policies across the APS.

It should also receive appropriate resourcing and capability to discharge these functions, and to assist Services Australia with digital service delivery.

In its response, the Coalition agreed to “strengthen” the DTA and build its scalability and role, but did not include further information on how this would be done, or if the DTA’s authority would be “embedded in government decision-making” like the review recommended.

In the long-term, the government should consider making the DTA a stand-alone department, the report recommended. But the government has merely “noted” this proposal.

The government’s response did not include a plan for longer-term funding for the digital transformation and skills uplift that the report details.

The Thodey review found that at least $100 million per year in dedicated funding is needed to “kick-start the transformation and deliver uplifts in service-wide capability”, while an investment of at least $1 billion a year was required to support better services and outcomes through digital transformation, with the private sector used as a guide.

A bottom-up capability analysis conducted as part of the review also found that $250 to $300 million a year over the next four years will be needed to lift digital and data skills in order to undertake digital transformation.

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