Better welfare-to-work contracting-out practices? Evidence from Job Services Australia (2009-2015)

Informed by New Public Management (NPM), the employment services sector in Australia has undergone radical changes since the 1990s. From a starting point where employment services were solely provided by a public agency, the... [ view full abstract ]

Informed by New Public Management (NPM), the employment services sector in Australia has undergone radical changes since the 1990s. From a starting point where employment services were solely provided by a public agency, the government started contracting out service delivery to numerous private providers, and by 2003, the market was fully privatized. However, operationalizing NPM principles in the context of Australian welfare-to-work proved to be not an even journey, with the sector being persistently subject to design, redesign, regulation and reregulation. It has undergone four waves of reform so far: Working Nation (1994-1996), Job Network (JN) (1996-2009), Job Services Australia (JSA) (2009-2015) and jobactive (July 2015-present). Underlying the sector’s constant flux is the fact that each program while designed to address problems embedded in the preceding program, simultaneously creates additional barriers to effective and efficient service delivery, which in turn necessitates a new reform agenda.

We argue that empirical research which touches on all aspects of the commissioning framework at grass root level is critical to breaking such a seemingly never-ending reform cycle. This paper contributes to the research genre by employing an open approach to exploring JSA (the program ran from 2009 to the end of June 2015), at the frontline, a critical point in the system where ‘policies are translated into a client’s individual experience’ (Smith and Lipsky 1993: 98). Specifically, in the survey of Australian employment services frontline staff in 2012, we asked participants, from their own experience delivering JSA services, to freely identify potential measures that could be implemented to improve the program.

The analysis of nearly 800 responses captured different problematic areas of JSA, for instance, jobseekers classification, staff knowledge/ skill base, collaboration among multiple parties involved in employment services delivery, compliance and administration. We also found that the policy instruments underpinning the framework (i.e. incentives, payment structures) were not designed to sufficiently handle the trade-off between quality and cost dimensions of service delivery. The findings provide suggestions on how to effectively address JSA’s shortcomings, which is arguably critically important when jobactive - JSA’s successor is still in its early existence.