Business
May 7, 2012

The Drummond Report: Breaking a bad cycle

The Commission on the Reform of Ontario’s Public Services, or the Drummond Report, provides a comprehensive blueprint for public sector reform in the province. Included in the recommendations are proposals on how government can become more efficient. Don Drummond spoke to editor-in-chief Toby Fyfe.

 

A theme of the report is that we must administer government better based on managing risk, creating efficiencies and ensuring accountability. This has been going on for years: why hasn’t it worked?

There’s an unfortunate cycle of efficiency in governments. In the good years they tend not to be very concerned about efficiency and become sloppy. Then about every 10 years – and we’re in the cycle right now at the federal and provincial levels and in most of the municipalities – they put a premium on efficiency. Sadly, history suggests that as soon as they get back out of their fiscal hole they start increasing the spending wildly and not being very conscious of efficiency.

I’m quite confident we’re going to see a focus on driving efficiency gains in governments across the land in the next couple of years. The tougher question is: if and when they do get back to balanced budgets will that kind of discipline stay in place? That’s the toughest thing, and that’s where all jurisdictions in Canada seem to have failed.

Are you saying conditions are so serious governments have to make it work this time?

I don’t think there’s a reasonable expectation of a substantial reprieve from the fiscal discipline. If we do get a period in Ontario where recovery is only about 2% real growth with 2% inflation, we get about 4% nominal growth which is about the pace of revenues. You can’t keep running your expenses up by 6.5%, which has been the average over the last 10 years in almost every jurisdiction in Canada. That doesn’t work. So not only the short-term and the initial fiscal restraint period have to be different, but also they have to be different on a sustainable basis as well.

You say service delivery needs to move from reactive to proactive. What do you mean?

Our whole model of policy, particularly in the social and healthcare fields, is to wait until a problem is very apparent and then throw some resources to try to patch it up. Yet we know with fair accuracy which individuals in society will likely run into problems, and can predict with a fair degree of accuracy what kind of problems they will be.

There are different public policy models: you can try to deal with it at the onset and prevent it from spreading or you can do what we typically do right now, which is wait until there’s a severe problem. Health is an example. One of the Senate reports indicated that the issue of heath is only about 25 percent healthcare; the rest is about social and economic conditions. And yet you never hear any discussion about that and have hardly any policies designed to address the 75 percent of the problem.

In your report you write that the government should “let service delivery outcomes adjust the size of the public service.” Explain.

There are certain fixed formulas governments try to follow when downsizing, typically looking for the glaring headline that says we’re going to cut x percent of the public service or we’re going to cut thousands of jobs. Those are inputs and you shouldn’t start off trying to control your inputs. You should decide what objectives you want, what are the financial parameters and operate them in the most efficient manner. The number of employees required for the program will follow from that, but you’ll end up with huge inefficiencies if you start with the number of employees, as you do now in Ontario.

You call on ServiceOntario to use the telephone and the Internet more when delivering services. Is this a cost-saving measure that could badly affect certain people?

It’s not really a cost-saving measure, although it could be. Social assistance and welfare are classic cases. It was put to us that as many as 70 percent of the interactions between welfare case workers and the clientele are over matter-of-fact issues: when is my cheque going to come? Many of these questions could be answered on the Internet or by phone. By doing that you would save money but it would also allow you to divert the resources of the welfare caseworkers to people who need extraordinary intervention. Right now the people are so busy dealing with matter-of-fact issues they don’t have time to do the proper stuff. Not all the people have the literacy to deal with the Internet and the like, but when people do, many prefer to do it that way.

What about managing risk if your proposals were implemented?

You have to have a scientific approach to risk: all it takes is a two-dollar muffin to be claimed and huge troubles occur. Here’s a perfect example: as Commissioners, we didn’t get a per diem. We had to claim for everything. I can’t submit an airline online receipt, which is all I ever receive: I have to submit a boarding card. Why do I have to do that? Well, I guess there’s an infinitesimal possibility I could have booked and received compensation for my flight and not taken it. It would be quite a feat to pull that off since I did show up for all the meetings in Toronto, so you would think you’d have a ready way of capturing that.

It’s a classic example of the enormous amount of effort and taxpayer money devoted to avoid one possibility that maybe I might have taken a meal that I didn’t actually incur. We need the right balance between an audit type of process and an extraordinarily heavy handed administrative and compliance process, which is what we have now, which costs an enormous amount of time for the recipient and for the government.

You want ministers and officials to have “a great deal of discretion” in deciding how to implement reforms. Isn’t this a recipe for slippage?

It’s a leash but it’s not that long a leash. The model I was very taken with was the one we followed in Program Review with the federal government. If your department was given a 15 percent target you could come before the Program Review Committee to say how you were going to get there. In most cases that sounded fine and you were sent on your way, and in some cases it didn’t and you were told to go back.

Previously, central agencies had decided not only how much the department should cut, but also exactly how it should cut. Smart as central agencies may be they don’t know the programs as well as the departments who are actually running them. The flip side of that is we have recommended a strong central oversight process in Ontario so we have it covered both ways. It has to go both ways and by being strong in the beginning I think you create some bad feelings and lack of support from departments if you’re too overbearing.

Overall, you are proposing real change in how business is done by government. Are you optimistic that the message will get through?

I’m very mindful that the report was a bit naive and fanciful; it’s not like these ideas wouldn’t have occurred to anybody before but they’ve never been successfully executed, so we’re calling for something quite different. I guess at the heart of it it’s about creating a completely different culture of government. In the ’70s and ’80s it was more prestigious to be working in government, but the prestige was that people largely went there to implement new and expensive programs. Can there be that kind of prestige and pride of working in the government by going and operating programs efficiently as opposed to creating new, bigger and more expensive ones? I think

About this author

0 comments

There are no comments for this post yet.

Be the first to comment. Click here.

Business
 
Have you ever thought of the role between racing and technology?...
 
A Globe and Mail journalist made an interesting observation of trade...
 
Throughout the history of economic thought, government has long been seen...
 
In this edition of Canadian Government Executive, we take a look...
 
In late March the ONS detailed the occupations in the UK...
 
In this episode, J. Richard Jones talks with Jason Hermitage, Vice...
 
Carpenters and electricians have tools: hammers, saws, pliers, plungers and flashlights....
 
In this episode of CGE Radio, J. Richard Jones interviews Alex...
 
On October 17, Fujitsu Canada, Inc. announced the ScanSnap iX1500, a...
 
Mining embodies progress. Mining provides civilization with the materials required for...
 
A few years back, consultants with ghSMART told us the biggest...
 
Risk management is top-of-mind for many organizations and executives. It seems...
 
In April 2017, the City of Edmonton approved a new Public...
 
We learned in grade school that one plus one equals two,...
 
Making a successful digital transformation is tough. It can be costly,...
 
On the global scene, technology has revolutionized and automated the work...
 
Did your high school valedictorian go on to achieve greatness? High...
 
Today on CGE Radio, we speak with Craig Szelestowski, President and...
 
Today on CGE Radio, John Jones interviews Alex Miller the President...
 
Canadian Government Executive Media (CGE) and CATAAlliance , Canada’s one voice for...
 
Water is essential to sustain all forms of life and more...
 
Security professionals have an obligation to communicate risks and recommendations to...
 
During the past decade, the international university-level student population in Canada...
 
Professionals, managers, and executives in the cost estimation industry can gain...
 
Canadian Government Executive kicked off its CGE Leadership Series for 2017...
 
A new study from the Conference Board of Canada gives our...
 
As the 5th largest agricultural exporter on the planet, Canada plays...
 
In this episode, hear more about how Canada is a prime...
 
In the recent June issue, we published a captivating piece by...
 
The October issue of Canadian Government Executive on Focusing on Customer...
 
In order to find out which strategies and priorities CFOs are...
 
Even as British stocks took a plunge and the pound sterling...
 
Whether it is convincing companies to build R&D centres, factories, or...
 
Copyright owners have struggled to protect their intellectual property since the...
 
Corus Entertainment is poised to complete its move to acquire Shaw...
 
Executive compensation is considered to be a central component of corporate...
 
Open source was established around the ethos of sharing and collaboration....
 
In December last year, a privately owned aerial drone crashed into...
 
By Gregory Richards A recent study by McKinsey Global Institute suggests...
 
Last week the Wall Street Journal, citing anonymous sources, reported that...
 
Written by Donald Farmer Too often, we base Business Intelligence today...
 
Written By Chris Brown To deliver results that senior executives value,...
 
Written By Jason McNaught Contrary to what you may have heard,...
 
Written by  Gail Vallance Barrington Anyone who has commissioned a program...
 
“Public institutions are the cornerstone of our democratic system” is the...
 
In late July, Amazon startled investors with the tiniest of profit....
 
A neuromarketing study examines exactly how much life direct mail continues...
 
As one of the U.S. Defense Department’s largest acquisition organizations, Program...
 
Many people say that managing projects is all about managing people...
 
Some of us can only dream of being 20 years old...
 
“With SMARTnership, we have to look into communication, being trustworthy, convincing...
 
Wreaths are placed at the naming ceremony for the new Canadian...
 
Barry Shepherd, the principal surveyor and client support manager for Central...
 
In 2012, the province of Prince Edward Island held a business...
 
The challenges city leaders now face require creativity and innovation. Many...
 
Depending on how you count, 10-20 percent of all Canadian public...
 
In a 2011 white paper published by the Internal Federation of...
 
For the last few years, governments around the world have been...
 
Compensation is often raised as a key tool that can either...
 
The Canadian mining industry is responsible for over 4.5 percent of...
 
Governments throughout Canada are facing a number of challenges, from reducing...
 
Since its founding, Canada has looked either east to Europe or...
 
It is a good management practice to review programs and activities...
 
Few things catalyze infrastructure faster than a major international sporting event....
 
What can you say about the future of long range public...
 
In Canada, it seems like any discussion of copyright quickly turns...
 
We live in a time when physical and digital infrastructures built...
 
How are leaders responding to a competitive and economic environment unlike...
 
We live in times of significant demographic and technological transition across...
 
Public-private partnerships (P3s) have become increasingly important in Canada at both...
 
Les citoyens souhaitent expliquer aux politiciens et aux décideurs ce qu’ils...
 
The need for better accountability has led Treasury Board to enforce...
 
It begs the question: Are federal real property professionals ready to...
 
With an annual deficit of $36.2 billion, the federal government is...
 
It now appears that Canada will emerge earlier than expected from...
 
Strong portfolio management is increasingly important in today’s interconnected world....
 
Early in 2011, the National Quality Institute (NQI) board of governors...
 
The Public Service Modernization Act, which came into force in 2005,...
 
In the current economic climate, the finance function role in the...
 
We live in exciting times: an unprecedented level of innovation is...
 
Saskatchewan’s oil and gas sector is booming, and the amount of...
 
The Economic Action Plan showed how much can be achieved when...
 
Public Works and Government Services Canada has a new and innovative...
 
Citizens may not always look forward to applying and paying for...
 
Maintaining and investing in water and waste water treatment facilities, roads,...
 
Stakeholders and media are currently focusing substantial attention on executive compensation....
 
The spectre of wrongdoing within a department can send chills down...
 
Il n’y a pas si longtemps, les Beatles chantaient : «...
 
The Beatles once sang, “You say you want a revolution? Well,...
 
An idea – that’s where it all starts. Entrepreneurs travel a...
 
The Commission on the Reform of Ontario’s Public Services, or the...
 
Quote of the week politicians provide the energy generated by ideology,...
 
Some title Some author
Some excerpt
 
Some title Some author
Some excerpt
 
Some title Some author
Some excerpt
Have you ever thought of the role between racing and technology?...