TOPIC 5.1: Contestability – a definition
In 2013, Commissions of Audit (Federal and in Queensland)[1] into government services identified contestability as the means to provide better value for money in the delivery of front-line services.
A comprehensive framework was developed to encourage the investigation of more efficient and more innovative service delivery approaches, whether by the public, private or the not for profit sector.
Contestability is described as a process where government tests the market to ensure that it is providing the public with the best possible solution at the best possible price. Contestability challenges the way services are delivered by reviewing the service system and looking for new and better ways to deliver the services that citizens want and need.
One of the challenges is not to automatically equate contestability with outsourcing. A contestability review will consider a whole range of service delivery options to ensure all possible options are considered.
These include:
- Process redesign
- Keep and improve the service
- Joint ventures
- Performance-based contracting such as payment by outcomes
- Mutual and employee-owned organisations.
15 min
The following short video interview with Professor Gary Sturgess, the NSW Premier’s ANZSOG Chair of Public Service Delivery gives further explanation of what contestability is and what it is meant to achieve.
The term ‘Commissioning’ has been borrowed from the UK where it has a broad application including strategic needs assessment, selection and prioritisation of program objectives and the exploration of alternative models for service provision. The process of commissioning redefines government’s relationship with the market.
Public officials purchase services on behalf of the community through a diverse range of competitive tendering and contracting mechanisms including outsourcing, joint ventures, partnerships and alliances.
‘Strategic procurement’ involves the long-term co-operative development of inter-dependent relationships which benefit the partners. Contestability, for our purposes is the process of testing the market to ensure that we are providing the public with the best possible solution at the best possible price.
The contestability process:
- Encourages innovative thinking
- Focuses on building partnerships
- Aims to improve the affordability of public services
- Exposes business functions to the credible threat of competition
- Provides a means for robust performance benchmarking with agency consequences for success or failure
- Guards against stagnation with incentives for continuous improvement
- Uses planning and competition together – with contracts moving only when other means of improving performance have failed.
Have a look at the required reading below for some of the ways in which stakeholders have influenced public service innovation – often creativity comes from the outside in. You may find opportunities for social innovation and co-design as part of your contestability processes.
35 min
Have a look at the required reading below for some of the ways in which stakeholders have influenced public service innovation – often creativity comes from the outside in. You may find opportunities for social innovation and co-design as part of your contestability processes.
Reflection
- What’s driving the contestability agenda in the public service?
- Can we reconcile the pressures to reduce the cost of services with opportunities for innovation?
- Queensland Commission of Audit. (2013). Final Report - February 2013: Volume 1 - Executive Summary and Recommendations. https://queenslandeconomywatch.files.wordpress.com/2016/10/qld-coa-executive-summary-report.pdf ↵