Agency, Stewardship And The Authorising Environment: Public Sector Contracting With The Not-For-Profit Sector To Deliver Out-Of-Home Care In Australia

Abstract

Publicly funded human services in Australia are increasingly outsourced under contract to the not-for-profit (NFP) sector. This thesis considers the outsourcing of out-of-home care (OOHC) for neglected and abused children in Australia over the last three decades. The outsourcing has been accompanied by intense debate over the most appropriate ways to provide funding to the NFP sector and to ensure the safety of the children who are brought into care. The central objective of the thesis is to examine whether contracting with NFPs for the provision of OOHC is characterised by trust and collaboration, consistent with a ‘stewardship’ contracting approach, or by low levels of trust and high levels of control, consistent with a ‘principal-agent’ approach (hereafter, ‘agency’ approach). A particular focus is the role of the ‘authorising environment’, the institutions and individuals who oversee public managers in the shaping of contracts. A qualitative research design is used to pursue the research objective, using 53 ‘elite-level’, semi-structured interviews with ministers, heads of external accountability bodies and senior managers in the public and NFP sectors. The interviews are complemented by analysis of a large volume of reports from relevant public inquiries undertaken over the last three decades. The principal finding of the thesis is that the authorising environment imposes multiple, overlapping levels of scrutiny upon contract design and administration, and that this environment impels public managers to perpetuate a contracting approach which prioritises risk management, low levels of trust, and high levels of control. For OOHC, the authorising environment has been characterised mainly by instability, generating frequent policy changes and numerous reports from parliamentary committees, standing integrity agencies and public inquiries. Within this environment, the creation of stewardship contracting based upon collaboration and trust is all but impossible to achieve, and agency approaches thus continue to predominate. The findings of the thesis are important for scholarship and for contractual practice. The current body of stewardship literature is limited in that little attention has been paid to the impact of external accountability mechanisms such as public inquiries and integrity agencies in shaping the authorising environment for public sector contracting. The thesis assists in taking a systematic approach to the impact of different elements of the authorising environment. The data on which the thesis is based shows that public and NFP managers working in OOHC are highly conscious of the potential value of collaborative approaches, particularly those aimed at increasing client participation and client well-being. However, in a highly politicised sector such as OOHC, the implication is that any client-centred mechanisms must be consciously designed, written-in, pursued and protected if trust-based contracting is to dominate over agency approaches.