Issues in market-based reform of public services accessed by citizens vulnerable to exploitation or neglect: the Australian experience of outsourcing employment services

In 1994 the Australian Government opened case management services for the long-term unemployed to the market, laying the foundation for its now fully privatised employment services system. The system was a pioneering exemplar... [ view full abstract ]

In 1994 the Australian Government opened case management services for the long-term unemployed to the market, laying the foundation for its now fully privatised employment services system. The system was a pioneering exemplar of New Public Management and is widely hailed as a successful model of outsourced service delivery. But this paper argues that its measures of success, focused on aggregate outcomes and service delivery costs, mask the adverse impact of its marketisation on ‘hard to place’ jobseekers and ignore the flow-on costs of their persistent unemployment. Counter to predictions and despite calibrated incentives, the prospects of the long-term unemployed moving from welfare to work have not improved through two decades of radical institutional change underpinned by market-based instruments. This paper examines the complex and multi-disciplinary nature of interventions encompassed in activating these jobseekers and the challenges of coordinating those interventions in contestable funding environments and thin markets.