Tim Roxburgh explains the important lessons for conducting a successful public works project gleaned from the Building the Education Revolution program.

Evidence from the federal government’s much-maligned school halls building program, the Building the Education Revolution (BER) scheme, contains some crucial lessons, most of which have been largely ignored by the media. They are now at risk of being buried and forgotten.

Much of the media coverage of the BER told a story that went something like this: governments at state and federal levels mismanaged the rollout. They overreached, becoming involved in things they knew little about. As The Australian put it in an editorial in March 2011, “the BER debacle reinforces the lesson that governments are not suited to project delivery”. 

But this version of events bears little relationship to the evidence. The Centre for Policy Development has carefully analysed data from a number of sources, including the body established to investigate complaints about the program, the Building the Education Revolution Implementation Taskforce. 

Far from being inherently incapable of project delivery, government departments were at the centre of the projects that were most successful. In those states where public sector expertise was available and governments made use of it, costs were lower and there were fewer complaints. 

Queensland and WA were able to achieve good results during the program by using strong public sector program management and monitoring. On the other hand, NSW and Victoria – the two states that relied most heavily on the private sector – performed worse than any other jurisdiction.

There are lessons here for the delivery of public works at all levels of government. The first clear message is that strong public sector know-how is central to providing value for money to the community. The BER demonstrated this in myriad ways.

Building features were too often dropped from the plans for school buildings in NSW when project budgets were getting tight. In Queensland this was less common – indeed, close oversight by public sector employees saw building features added to projects when costs turned out to be lower than expected.

The BER program also showed that in the absence of strong public sector oversight, competition between external providers does not guarantee value for money. 

WA’s management of the program demonstrated this point. Not impressed with the initial prices tendered for many of the projects, the government released its own independent quantity surveying estimates and only invited tenderers who were willing to match these prices to negotiate further. WA ended up paying around 40 per cent less per square metre than NSW.

Not all governments have a significant pool of internal management and technical expertise to draw on. Figures from the Australian Bureau of Statistics show the extent of the reduction in works-related employees across state governments in recent decades. 

The Victorian Government once employed more than 300 architects. By 2006, it employed only around 19. In the mid-2000s, the number of civil engineers employed by the governments of Victoria and NSW was less than half what it was in the 1980s, with most of those remaining engineers concentrated in roads agencies. 

Of course, governments of all persuasions have outsourced a multitude of functions in recent decades. But a cross-party Senate Committee recently recognised that we now face a new problem. 

Regardless of your attitude towards outsourcing, “a role that government cannot outsource is quality decision making, efficient use of taxpayer money and properly scoped requests for tender”. Recognising that many governments are now unable to fulfil even those basic tasks, the Senate Committee made clear their belief that “governments at all levels should enhance their engineering capacity”. 

After two decades of outsourcing, ABS figures show that the Victorian Government has only a minimal level of remaining expertise. Queensland is the only state that retains a full range of public works expertise internally. While Victoria had little choice but to outsource the high-level management of the BER program, Queensland had a wide range of internal experience available to draw upon. 

This widespread realisation of the long-term costs of outsourcing should suggest that the outsourcing trend has peaked. But recent events suggest otherwise. In the wake of the BER program, many states have announced further cuts to their public works staff.

This problem is not unfamiliar to local government, where engineer numbers are stagnant or declining in most states. In the past there was also a lot more scope for local governments to call on state governments for assistance and advice when undertaking complex public works projects, but this pool of knowledge has been significantly depleted. 

Besides the importance of public sector capacity, one other lesson from the BER program is worth noting. The states that achieved good outcomes didn’t skimp on allowing for genuine involvement by stakeholders. 

Given a short time frame to complete the projects, some states allowed only a limited role for school principals and school communities in defining and overseeing the project. While these states commenced building earlier, the states that had allowed for a higher degree of involvement by stakeholders gained ground on other states during the building phase.

While strong stakeholder input is unlikely to serve as a replacement for sufficient expertise within government, evidence from the BER suggests that it may attenuate the negative effects of depleted public sector capacity. 

Professionals with a career in public works could be forgiven for avoiding the topic of the BER in the course of polite dinner conversation. But they should trumpet the true lessons of that program, lest those lessons be rapidly forgotten. In the absence of a true appreciation of the value of public sector expertise, that expertise is too easily cut adrift in the quest for a short-term boost to the budget bottom line.

The Centre for Policy Development was contracted to conduct research on the history of public works capacity by the Building the Education Revolution Implementation Taskforce.

Comment below to Continue the Conversation!