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TfM has become increasingly concerned about the declining standards of governance at the political and institutional level within all levels of government.

TfM has become increasingly concerned about the declining standards of governance at the political and institutional level within all levels of government. As noted in an earlier blog, poor governance is the main reason we have consistently achieved poor transport outcomes in Melbourne and Victoria generally but it is a complex issue with no simple solutions. Many of the problems have their roots in political thinking/dogma which can be very difficult to change. Three papers will be included in our blog over the next week by President Nick Low to provide a better understanding of this issue. These include: The Dysfunction of ‘New Public Management’, a lesson from Covid 19, How neoliberalism mutated into crony capitalism andActivating Public Planning. The first of these is included in this blog.

The global experience of planning the response to the Covid 19 pandemic has revealed many failures of governance across the nations, both failures of political leadership and failures of the neo-liberal institutional models that govern policy making in the 21st Century.

The death of neo-liberal economics occurred in 2008 with the GFC. But its zombie-like ghost remained to haunt governance. The post-mortem has only just begun – most recently with the work of Kay and King (2020) – though the sickness was foreshadowed much earlier. The work of forensic examination of the corpse must continue to identify specifics of ‘organ failure’. In what follows I examine one such failure.

New Public Management

The particular neo-liberal organ of governance I examine is called ‘New Public Management’ (NPM). NPM is a theory of public sector management whose assumptions are built on the axioms of the Chicago school concerning human behaviour and its motivation. These axioms of ‘rationality’ are critically discussed at length by Kay and King (2020, e.g. p. 110 et seq. ‘The triumph of the American school’). The central axiom of the ‘American school’ is that individuals always seek to maximise their own ‘utility’. Further, the benign social outcome of utility-maximising individuals is only achieved through the free market. The precise connection between NPM and the Chicago School is too complex to address here. But it is important to note one observation of Kay and King which is relevant to what follows. The authors say, ‘Our brains are not built like computers but as adaptive mechanisms for making connections and recognising patterns. Good decisions often result from leaps of the imagination.’ (ibid: 47). With NPM there was a failure to imagine what is needed to protect the population of the State of Victoria, Australia, from the spread of the virus from returning travellers.

The central assumptions of NPM are as follows.

  • Professional experts in fields relevant to public policy are self-interested in promoting policies and understandings of the world that emerge from their professions. Professions are viewed as organised institutions promoting their own self-interest. Thus professional personnel are biased in favour of policy priorities that support their employment and remuneration. Fields of policy can thus become ‘captured’ by professional interests. (Somehow the economics profession has exempted itself from any implication of policy ‘capture’). Instead, people trained in ‘management’ replace professionals in senior executive positions in the public service. Their function is to ‘manage’ what political leaders decide, mostly meaning managing contracts with private sector agents.
  • There is scepticism about any value of ‘the public interest’ other than is demonstrated by market outcomes. Thus, the proposition that a profession might, at least in some important respects, represent the public interest in any particular field is discounted.

  • Only political leaders competing in electoral arenas are capable of devising policies in the public interest. Competition for votes becomes a kind of substitute for competition for customers. Policy making is thus seen as a top-down process, in which policies and their implementation are radically separated. In the words of Jan- Erik Lane (2000: 179), ‘In public policy, the policies government decides centrally are to be implemented either by means of central bureaux steering public employees at lower levels or through wide discretion on the part of policy networks’. Presumably the networks involve public and private sector actors.

These assumptions are simplistic and ideological. They have no basis in scientific observation of human behaviour. They justify the neoliberal programme of deregulation and reduction of the size of the public sector, in short, the hollowing out of the state. They support the desire of the economics profession to reduce economics to mathematical algorithms in order to make it look scientific and politically neutral.

The consequence for public sector management drawn from these assumptions is that the public sector should be structured with three elements: political leaders who decide policies, consultants (typically private sector) who advise political leaders, and managers who implement contracts to embody policies. In what follows I trace the unforeseen consequences of the NPM approach in the public health arena which resulted in a catastrophic failure of planning.

The outbreak of the Covid 19 virus in the State of Victoria, Australia, in 2020

After quite successfully containing the spread of the virus in a ‘first wave’ from March 2020, a second wave of infections hit the State of Victoria in July 2020. 768 people died from this second wave.1 The long term health of many more has been affected. The State was forced into ‘Stage 4’ lockdown which included a curfew between 8.00pm and 5.00am, enforced closure of many businesses, bans on movement beyond five kilometres from home, and compulsory wearing of face masks. The lockdown was enforced for more than three months.

It was established by genomic tracing that all of the second wave of infection originated from two quarantine hotels in which returning travellers were forcibly sequestrated. The virus was spread by hotel security guards who were insufficiently protected from the virus. Businesses suffered and the whole Australian economy was shocked. Political leaders such as Daniel Andrews (Premier of the State of Victoria) must of course accept ultimate responsibility for such a failure, as he has. He quickly announced a public inquiry into the outbreak. The head of the inquiry, Justice Jennifer Coate, reported in November 2020. No individual was found to be responsible. But the root cause lies deeper in the lack of effective planning conducted by Victoria’s public health administration.

In recent years planning for infection control from all sources began with the report by Dr Rosemary Lester published in 2014. Lester is a highly qualified expert in public health and epidemiology. Her report was delivered to the emergency management authority (Emergency Management Victoria). The epidemiological expertise shines through the report. Lester recommended the use of personal protective equipment and training in its use ‘in all health care settings’. Her report was shelved.

Under the name of the Minister for Health, a second planning report was published in March 2020 authored by senior public servants of the Victorian Department of Health and Human Services (DHHS). These public servants had no public health or epidemiological background. Their report showed no awareness that the people looking after those quarantined in hotels needed to be equipped as health workers, with appropriate training and personal protective equipment. The report is a managerial document focusing mainly on the (then) three stages of governmental response. It draws heavily on a similarly managerial report from the Federal Department of Health.

In June 2020 an ‘operation’ was devised by DHHS named ‘Soteria’ (after the Greek goddess of rescue). This operation was designed to manage quarantine of returned overseas travellers. The DHHS displayed nothing on its website about the operation, about who devised it or what its aims were. At the public inquiry headed by Justice Coate a sheet ofinstructions to ‘hotel security staff’ emerged: ‘OPERATION SOTERIA, PPE Advice to Hotel Security Staff and AO’s (sic) in Contact with Quarantined Individuals’. It advised that personal protective equipment was not required to be worn by security staff at any point of contact. The latter include the hotel lobby, the quarantine floor, and at doorways to clients’ hotel rooms. Only hand hygiene and surgical masks were ‘recommended’. Hotel quarantine clients (guests) were recommended to wear surgical masks ‘if tolerated’.

It is obvious that this operation did not benefit from epidemiological advice. In evidence to the Coate Inquiry, Professor Lindsay Grayson (Director of the Austin Hospital’s infectious disease department) said that, as well as training in the proper use of masks, security guards at any point of contact with hotel guests should have been dressed in full personal protective equipment (PPE) to the same standard as health workers. It is also common sense. Epidemiological advice should not even have been needed. Everyone who reads a daily newspaper or receives a digital news feed would already have known how infectious this disease was. The report by Rosemary Lester states:

‘The use of appropriate PPE is recommended in all healthcare settings, including primary care and health services. … Where the use of appropriate PPE is recommended the equipment must be suitable and maintained. Appropriate training must be provided to the individual using PPE at a time prior to the pandemic to ensure they become competent and proficient in its use’ (p.48).

The managers of Operation Soteria did not exercise their imagination enough to see that the situation of hotel quarantine was a ‘health care setting’. They followed the normal, easy solution of contracting out peripheral health work to private companies, without first ensuring that the workers were properly trained in the use of protective equipment and suitably supplied.

The Health Department leader of the Covid 19 response decided to spread responsibility for the operation among government bureaucrats including police and emergency services. Lester’s report states, ‘The Chief Health Officer or delegate would assume the role of State Controller and liaise closely with the Emergency Management Commission’. The Chief Health Officer of Victoria was reportedly excluded from taking control.

The private companies sub-contracted the work to labour supply companies employing casual workers. Many of these workers in the so-called ‘gig economy’ had several different jobs on the go. Unprotected from the virus, they contracted disease from returned travellers (or allegedly from a night manager of one of the hotels) and, before they began showing symptoms, spread the virus to their families and to colleagues in other work settings, who in turn became infected and spread the virus further through the community, resulting in an explosion of over 18,000 cases of the virus.

The Head of DHSS at the time had no qualifications in either epidemiology or public health; in fact no qualifications in any branch of health. This person was simply a career bureaucrat with a Masters in public administration. The division of the Department of Health and Human Services responsible for epidemic planning (the division of ‘Regulation, Health Protection and Emergency Management’) was headed by another career bureaucrat. This person was previously Deputy Secretary, Budget and Finance, a ‘Director of the Allen Consulting Group and a partner in Deloittes’.

The Division’s functions are described as bringing together ‘professional and epidemiological expertise to protect the Victorian public from avoidable harm. The daily work of the division brings us in contact with such risks as drugs, poisons, infections, contagions, emergency

incidents and the risks of super bugs and pandemics’. In practice, before the outbreak, health professionals were sidelined and given no control over the planning of the response to Covid 19.

The Coate report found that blame for the outbreak could not be assigned to any individual. Nevertheless the Minister of Health was subsequently dismissed from her position, and later resigned from Parliament. The Head of DHSS resigned to become a partner in the ‘strategy focused’ business consultancy firm EY Port Jackson Partners based in Sydney. The divisional manager was stripped of responsibility for Covid planning. Yet the systemic failure of New Public Management was not noted and the concept continues to operate across all departments of the Government of Victoria.

When cautious steps to contain the outbreak failed, the Government of Victoria took decisive steps to contain the virus by preventing people from congregating and thus transmitting the disease. This strategy, coupled with effective testing and tracing was highly successful. But problems with quarantine hotels have since emerged repeatedly in Australia, resulting in temporary lockdowns. Step by step the State Governments have learned from experience what works and what does not. They are now demanding the establishment of specialist out of town quarantine stations to replace inner city hotels.

This quick learning by local political leaders, trusting epidemiological advice, is what has spared Australia from the worst outcomes of Covid 19. But it is time to reassess the effect of New Public Management, which brought the State of Victoria so close to disaster and cost so many lives. The belief that professionals simply promote their own material interests is wrong. Professionals have interests, of course, specific to their disciplines, but those interests can and often do coincide with the public interest. Public health professionals, for instance, have an interest in and a commitment to public health.

Politicians in a democracy are by definition non-experts. Their job is to represent their constituents. That job cannot include understanding all that is required in any particular field to achieve the public interest. The issues involved are invariably complex and require specific training and knowledge. The politician’s job is to listen to professional expert advice and then decide how to act. Fortunately that is what political leaders in Australia have now learned from Covid 19. The NPM assumption that political leaders can do without professionals in leading roles in the public service has been shown to be wrong.

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