The Uhrig Report -- The Sacking of the ARC Board -- And What Else? (January 11, 2007)

     In November of 2002 the Federal Coalition Government appointed John Uhrig AC, Chairman of Westpac in the early 1990s,  to conduct a review of the corporate governance of Commonwealth statutory authorities and office holders.

Mr Uhrig provided the final version of his 133 page report to the government in June 2003 and the Minister for Finance and Administration, Senator Nick Minchin, released the report 14 months later on August 12, 2004.

Recommendation 3 states, "Governance boards should be utilised in statutory authorities only where they can be given the full power to act".

And on July 16, 2005 the then Minister for Education, Science and Training, Brendan Nelson, announced:

 The Australian Government endorsed Mr Uhrig’s report and decided that some 170 portfolio bodies would be assessed by their respective Ministers. The ARC was one of the first bodies to be assessed.

The functions of the ARC are best suited to the executive management template developed by Mr Uhrig and, as a result, I have decided to strengthen its arrangements so that it is fully consistent with this model. The existence of a board is inconsistent with the executive management model and I have therefore decided to retire the ARC Board by early 2006.

In March 2006, with Julie Bishop as Minister in charge of the ARC, the Government introduced legislation that diminished the capacity of the Australian Research Council to provide high level, independent analysis and advice to Government and the broader community on research issues.

The President of FASTS, Professor Tom Spurling said the proposed legislation removes an important power of the ARC – the capacity to undertake inquiries on matters related to research of its own volition.

“The legislation removes the Board of the Australian Research Council as recommended by the Uhrig Report on governance of Government agencies.

“However, in removing the Board, the Government has also removed the power of the ARC to initiate inquiries.” (refer section 9(1)(b) of the Australian Research Council Act 2001 AND )

“This means the ARC could only undertake inquiries or reviews at the explicit direction of the Minister.”

“There is an important principle at stake – the ARC should have such a power if it is to be a credible, high level organisation providing independent advice and analysis to the Government and the community”.

“This power existed prior to the current ARC Act (2001) and has been used by the ARC to initiate inquiries from time to time.

“The legislation introduced today raises an important question as to why the Government did not take the opportunity to carefully examine the full operations of the ARC to ensure it is well placed to ensure high quality Australian research is identified and supported.”

And in an October 2006 opinion piece Max Whitten wrote, "Perhaps the most insidious of all government policy changes has been within the Australian Research Council, which under the pretext of the John Uhrig review, has been largely deprived of its autonomy as a Statutory Authority and is more directly answerable to the Minister, metered through senior bureaucrats within DEST."

In the December 2006 issue of The Canberra Times' "Public Sector Informant" Paddy Gourley* gives an up-to-date assessment on the fallout of the Government's use of the Uhrig report. He writes that "at a recent seminar at the University of Canberra Professor Roger Wettenhall gave the Uhrig report a few more well-deserved biffs under the ear. He complained that Uhrig:

• failed adequately to consult during his review:

• ignored history (he sure did - he didn't even refer to or seem to be aware of the formal statement of standing government policy on his subject);

• assumed private-sector models were best;

• ignored the role of Parliament;

• focused too much on enhancing the role of ministers; and

• failed to see that statutory authorities needed protection from ministerial interference.

In Mr Gourley's view Professor Wettenhall is one of Australia's foremost academic experts on statutory authorities while Mr Uhrig "has shown himself to be a dilettante on public-sector governance and his opinions should be ignored. Sadly they are not [and his report] is being used as a basis for reviewing Commonwealth statutory authorities".

Mr Gourley is being careful and playing it straight, suggesting that the Government has been misled by John Uhrig, rather than Mr Uhrig bringing down the report the government wanted in order to allow it to use the report as a basis to exercise tighter control over its statutory authorities.

In any case in Mr Gourley's opinion, "one of the major recommendations, for greater ministerial direction of statutory bodies via so-called "statements of expectation", is misplaced. Statutory authorities don't need more direction; ministers need to be more disciplined in their establishment."

According to an officer of the Department of Finance and Administration:

• 154 of the scheduled 162 assessments have been completed by ministers and provided to the Minister of Finance, Senator Minchin;

• seven boards have been "retired";

• two have been reduced in size;

• there have been two mergers; and

• the staff representative has been removed from the ABC board.

Mr Gourley singles out out for special mention the Uhrig report's recommendation, "Governance boards should be utilised in statutory authorities only where they can be given the full power to act" commenting that "for statutory authorities it is next to meaningless".

It's hard to think of a Commonwealth authority that has the "full power to act". Among other things, almost all authorities are:

• wholly or significantly funded by government;

• expected to operate within the scope of various government policies; and

• subject to formal powers of ministerial direction under their enabling legislation.

Mr Gourley also writes that "boards... [are] an important part of the structure of many statutory authorities... because of the protection they provide against inappropriate ministerial meddling"

Hardly surprising then that the Coalition government is so supportive of the Uhrig report.

And as a parting shot, "the Uhrig 'templates'... to the extent that they underplay the importance of protecting the independence for statutory functions... are positively dangerous".

Would the ARC Board be resurrected were a Labor government to be elected? Ah there's a question to be asked.

*Paddy Gourley was appointed to the Commonwealth Public Service in 1969. He has worked in various Commonwealth departments and agencies including the Public Service Board and the departments of Industrial Relations and Defence. His main areas of responsibility were personnel and industrial relations, legal affairs and security. He retired from Department of Defence in 2000 and is currently a regular contributor to The Canberra Times on public administration and related matters.