Posted May 1997
Bertinoro I
High-level Technical Seminar:
Private and Public Sector Cooperation
in National Land Tenure Development in Eastern and Central Europe
University Residential Centre
Bertinoro, Italy
1-5 April 1997
Participation in Land Information System Development and Administration:
Outsourcing as a Tool for Effective Land Data Administration
by Graham Lanphier
Deputy Director
Land Titles Office
Victoria, Australia
e-mail: glanphier@nre.vic.gov.au
and John Parker
Surveyor General of Victoria, Australia
e-mail: john.parker@osg.vic.gov.au
representing the Overseas Projects Corporation of Victoria
e-mail: rcross@opc.vic.gov.au
MANY GOVERNMENTS around the world are "re-inventing government",
i.e. they are looking at different approaches to undertaking government
business. This has involved assessing what should be the role of government
and how can services be delivered in the most efficient and effective way
for the benefit of all. Opening up services to national markets, and streamlining
the regulatory framework to improve the competitiveness of the economy have
been mechanisms used.
Australia has over the last few years made considerable changes to the number
of government services provided and to the way they are delivered. Within
Australia, trade practices, competition policies and mutual recognition
of trade, professions and occupations across jurisdictions have all been
re-assessed. This has resulted in the sale of many government enterprises
in the electricity and gas utility sectors, and the delivery of land, corporate
and vehicle registration services. Large water and sewerage authorities
have been divided into several separate businesses but created as state
owned enterprises to create competition, operating as if they were private
enterprises. There has been a strong desire to separate the purchaser/provider
relationship in these traditional public operations.
This same approach within the land information industry in Australia has
seen much of the "doing" work of government "outsourced"
to the private sector. Government is now confining its role to "steering"
rather than "rowing."
This paper will look at how the delivery of government services in the State
of Victoria, Australia, has changed. Discussion will relate to how contracting
out of survey, mapping, title registration and related services has occurred,
the role quality assurance has played, and the provision of private sector
finance. The role of the private sector in delivering government services
and the sale of government related businesses to the private sector, where
the ownership of intellectual property and public assets is retained by
government but managed by the private sector. Specific examples relating
to survey, mapping, title registration, aerial photography and digital data
will be examined.
Introduction
Increasingly, governments worldwide are looking for alternative strategies
to current funding methods and structures for delivering public service.
The global recession provided an incentive for governments to reassess the
role of the public service. Australia has, over the last few years, made
considerable changes to the number of government services provided and to
the way they are delivered. Measures have been adopted to minimise government
intervention and expenditure (capital and recurrent), and make more efficient
use of public sector resources. Trade practices, competition policies and
mutual recognition of trades, professions and occupations across jurisdictions,
have all been reassessed. Restructuring, privatisation and outsourcing of
certain public sector functions are some approaches which have been used
by governments within Australia to improve public sector efficiency.
Government policy and associated reforms have a direct impact upon survey,
mapping and related services. As Hoogsteden & van Zyl (1992) note, governments
have traditionally accepted responsibility for such services, particularly
cadastral functions, also retaining control over the provision of these.
In the quest for improvements in public sector productivity and service
quality, the provision of survey and mapping services by the government
are being reassessed, and subjected to reforms outlined by government policy.
Victoria, Australia
Victorian policy and objectives
In 1992, the State of Victoria, Australia, underwent a change of government.
The new government immediately implemented a major programme of economic
and financial reform, the overriding objective of which was to improve the
living standards of Victorians, by making Victoria a better place to live,
to invest and to do business. The Government recognised that an essential
element of this programme was public sector reform, with a reduction in
the cost of government critical to industry competitiveness (State of Victoria
1994). Objectives for the reform of the public sector included:
- greater efficiency in the use of the State's total resources;
- increasing the competitiveness of the Victorian economy;
- more efficient service delivery;
- the empowerment of consumers; and
- and the reduction of State debt (State of Victoria 1996).
A range of measures are currently being implemented in order to achieve
these objectives, such as:
- minimising government bureaucracy through the focussing of government
departments on core functions such as policy development, resource allocation,
specification of services and standards setting, monitoring and regulation;
- reducing the size of the public sector through privatisation and contracting
out of certain functions;
- the establishment of purchaser-provider (contractual) relationships
between core departments and service-deliverers;
- ensuring service-deliverers are subject to competition wherever possible;
and
- reforming Government Business Enterprises.
National policies
Victoria also embraces national uniformity in adopting standards for enhancing
market efficiency such as Mutual Recognition and National Competition policies.
National competition policy
Recognising the need for economic reform throughout Australia, governments
and industry advocated the removal of impediments to the freer operation
of market forces, particularly in the labour market, manufacturing industry,
and in areas of public responsibility such as transport, communications
and electricity supply (Alford 1994). To address restrictions on competition
within Australia, the implementation of a National Competition Policy was
agreed to by the Council of Australian Governments in April 1995. The principle
aims of this policy were to facilitate effective competition in the interests
of economic efficiency, deliver benefits to consumers and taxpayers and,
by improving the flexibility of the economy, improve its capacity to respond
to changing market opportunities (Hilmer 1993).
Australian Commonwealth, State and Territory governments have now adopted
the following principles to address restrictions on competition in the Australian
economy:
- independent prices oversight of government business enterprises;
- application of competitive neutrality policies to significant government
business activities;
- structural reform of public monopolies;
- review and where appropriate, reform of legislative restrictions on
competition, and
- provision for third party access to significant infrastructure facilities
where required for effective competition in related markets.
Through the application of competition principles to the delivery of government
goods and services, internal efficiencies and responsiveness to customer
needs will be improved. With competition policy implemented by all jurisdictions,
improved economic efficiency will significantly benefit the national economy.
At this stage, different States and Territories have taken up National Competition
Policy at different rates, with Victoria leading the way and employing competition
for the benefit of consumer choice.
Mutual recognition
The principles of Mutual Recognition have also been implemented to address
national economic efficiency concerns, the primary purpose being to promote
the goal of freedom of movement of goods and practitioners in a national
market in Australia. Mutual Recognition aims to ease existing regulatory
barriers that impede the movement of practitioners and the sale of goods
from one jurisdiction to another. Both the Federal Government and each State
and Territory Government in Australia have their own Mutual Recognition
Act.
With regard to cadastral surveying, there has been a Surveyors Board Agreement
between the Surveyors Boards of the Australian States, Territories and New
Zealand, in place since 1892 incorporating the ideas of mutual recognition.
This means that a registered surveyor in one state is entitled, on notification
to the local registration authority, to be registered to practice as a cadastral
surveyor in another state. This allows the freedom of movement of practitioners
to meet market demand and encourages the development of an accurate homogenous
cadastre within Australia and New Zealand (Office of Surveyor General 1995).
The deregulation of land valuers in Victoria in 1994 was also in line with
mutual recognition principles. While land valuers were required to be registered
in Victoria, other States and Territories did not require registration,
resulting in a partially registered occupation. The Council of Australian
Governments agreed in 1992 that registration requirements would be removed
for partially registered occupations unless it was essential for public
health or safety. Compulsory registration of all land valuers in Victoria
was therefore abolished, removing an unnecessary barrier to entry into the
profession and streamlining the regulatory framework, with standards for
valuers now set by professional bodies. Consumers directly benefit from
a more competitive market in land valuation services as a result of the
deregulation of the land valuation profession
Victorian initiatives
Various strategies employed by the Government to achieve their stated objectives
are canvassed below.
Restructuring of the Public Sector
The minimisation of government bureaucracy, and the subsequent restructuring
of the public sector, has resulted in a reduction in government departments
from twenty two in 1992 to the current eight departments in 1997. The Department
of Natural Resources and Environment is one example of the amalgamation
and integration of public sector activities. Separately managed functions
relating to primary industries, natural resources, the environment and other
public and private land management throughout the State, were brought together
into the one department. Amalgamation has enabled the Department to focus
on improved outcomes through the integration of policy advice to government,
reduced duplication of services, and improved customer service.
Separation of the purchaser and provider of services
One tool being used by Government to achieve their objectives is the separation
of the purchaser of services from the provider of these services. In 1993,
the independent Victorian Commission of Audit recommended the implementation
of a results based management framework whereby the Government purchases
goods and services from its agencies to meet its policy goals (State of
Victoria 1995). By changing the focus of management from inputs to emphasising
outputs and outcomes, the most efficient and effective way of producing
these outputs could be identified. The concept of the separation of purchaser/provider
means that while Government continues to fund "public good" activities,
it is able to purchase these services from the most efficient provider,
be it from external or internal service providers. This leads to greater
contestability in the way services are delivered, resulting in improvements
in both the quality and efficiency of services, and improves client choice
in a range of service delivery areas.
The Department of Natural Resources and Environment, Victoria, is now using
the concept of the separation of the purchaser and provider of services
to increase the transparency of policy and planning and to identify opportunities
for competitive delivery of services. New Zealand has also implemented this
concept with a new department, Land Information New Zealand (LINZ), being
split into a regulatory side and a service delivery side. The department
retains responsibility for policies, regulations, and standards, and continues
to own base information such as the cadastre, the Digital Cadastral Database
and the Land Titles Office registers and data. The commercial survey, mapping
and land activities such as survey control and maintenance, are now the
responsibility of a State Owned Enterprise (SOE). The SOE is offered contracts
by the department on a first refusal basis until 1998, after which the contracts
will become contestable.
Privatisation and corporatisation
Traditionally, government services have been produced by the public sector.
With the reform process currently being undertaken however, the focus is
on how these services can be produced most efficiently. As Government Business
Enterprises (GBE's) have historically operated in industries with a legislated
monopoly, there have been few opportunities for competition to be developed
in these markets. The Victorian Government is currently undertaking a restructuring
and privatisation program for all Significant GBE's in order to introduce
competition and improve efficiency and customer service. Reform of GBE's
has occurred/is occurring throughout areas including the water, electricity,
gas, ports, transport, aluminium and land sectors. The electricity supply
industry is at the forefront of the Victorian's Government's privatisation
program, having been restructured from a vertically integrated monopoly
into i) five distribution businesses (each comprising a competitive energy
retailing arm and a regulated local distribution monopoly), ii) a regulated
monopoly transmission system owner, iii) a wholesale electricity market
and system security operator, and iv) a number of competing generators.
A similar structure for the gas industry is currently being developed with
the aim of obtaining the lowest sustainable gas prices for consumers. Current
government policy promotes privatisation of government businesses where
a net public advantage from the sale occurs (State of Victoria 1996).
Significant Government Business Enterprises which are not to be privatised,
are to be conducted on a fully commercial and competitively neutral basis.
These GBE's must face all the costs that are normally borne by the private
sector, or else risk distorting competition. A prime example of the corporatisation
of GBE's are the original government owned water and sewerage authorities
which have been divided into several separate businesses but created as
state owned enterprises operating as if they were private businesses.
Both privatisation and corporatisation of GBE's lead to a working environment
which encourages innovation and flexibility. Power companies for example,
may venture into the telecommunications market. Implementation of the GBE
reform process in Victoria is a means to improve customer service, increase
customer involvement and choice, reduce management costs, and achieve lower
priced and better quality services. The Victorian GBE reform program is
consistent with the competition principles endorsed by the Council of Australian
Governments, and has served as a model for the other States and Territories
in Australia, prompting them to undertake their own reform programs.
VicIMAGE
Survey, mapping and related services provided by the public sector are not
immune to Government policy and the current reform agenda. The privatisation
of VicIMAGE, a specialist aerial photography service within Survey and Mapping
Victoria, was finalised in August 1995. VicIMAGE, which consisted of a photographic
function, a map distribution function and a shopfront, provided aerial photography
printing services, general public relations assignment photography and a
film library, for both Government and non-Government consumers. These services
were identified by an internal study as being suitable for provision by
external suppliers. Coopers & Lybrand Consultants were then engaged
to review and determine the optimal arrangements for provision.
Significant capital investment by the Government was required to improve
productivity and reduce prices to enable VicIMAGE to be competitive with
the private sector in terms of the price of aerial photography. In addition,
it was determined that there was a declining demand for these services from
Government customers, and thus associated revenues could be expected to
decrease as well. The review concluded that the continuing provision of
VicIMAGES's services by the Government was unviable, and that these could
be better supplied by an external supplier (Coopers & Lybrand 1994).
After a competitive tendering process, the entire VicIMAGE business was
sold to the private sector, with the exception of the film library which,
containing film dating from 1935, was considered to be a valuable historical
record of Victoria. The management of the film library is now undertaken
by the private sector, with the Government continuing to own the library
and the copyright to this material. While the private company may reproduce
and sell items from the Aerial Film Library, they must pay royalties to
the Government in recognition of this copyright. This process of privatisation
has allowed the Government to avoid future financial deficits and significant
amounts of capital expenditure, whilst also enabling the provision of these
services at competitive prices.
Outsourcing
Outsourcing, or the contracting out of certain functions, is one measure
currently being used, particularly in the public sector survey and mapping
industry, to achieve the objectives identified by the Victorian Government
for reform. Outsourcing is described by the Department of Treasury and Finance
(1995) as the provision of goods or services by an external party which
were previously supplied internally. Set out in a contractual agreement,
an agreed level of service is provided for a pre-determined fee. Government
is still accountable for the delivery of services, however the "doing"
work is undertaken by the private sector. This process enables the Government
to access private sector skills and capital, whilst maintaining overall
responsibility for the function or service. Outsourcing is employed where
government services are considered to be strategic or core business activities
however, the provision of these government services is not a key requirement
of Government.
Key reasons for pursuing outsourcing include:\
- costs can be reduced, contained and made more predictable and controllable;
- service levels can be improved;
- risk and responsibility can be transferred to the external service provider;
- increased leverage of assets can be achieved;
- access to expertise and specialist skills can be enhanced;
- quality and standards can defined and improved; and
- access to latest technology can be ensured (Dept. of Treasury & Finance
1995).
The Victorian Government has developed outsourcing and contract management
guidelines for use throughout the public sector, providing general guidance
for Departments and Agencies. These guidelines assist in the identification
of outsourcing opportunities, and provide a framework for use in the business
re-engineering process. While advice and consultancy support is available,
it is the responsibility of the Departments and Agencies to implement outsourcing
projects.
The Office of Surveyor General, Victoria
The role of the Office of Surveyor General is to maximise value and achieve
best practice in Victoria's surveying systems and ensure the provision of
the fundamental survey framework for the people of Victoria. Since 1992
the Office of Surveyor General has contracted out its survey work in line
with the Government's outsourcing policy, whereas previously the Office
undertook such work itself. With the private sector now undertaking survey
work such as this, and the trend away from detailed examination of contractors
work, OSG must ensure the quality of the work is satisfactory. One mechanism
to achieve this is through the application of Quality Assurance principles.
Since 1989 OSG has pursued the principles of Quality Assurance, achieving
certification to the ISO 9002 standard for quality systems in September
1995. Quality Assurance is one mechanism for ensuring products and services
are provided which meet customer needs. OSG now require private survey firms
who undertake work on behalf of OSG to have quality systems in place. A
register of survey firms has therefore been established to ensure that only
those firms with the capability to undertake surveys within agreed timeframes
and in accordance with the Office of Surveyor General's instructions, pre-determined
standards and statutory requirements, are engaged. Firms and individual
surveyors wishing to be accepted onto this register must apply to OSG providing
details of any Quality Assurance certification or quality system in place,
progress towards certification, and general procedures for undertaking and
checking surveys. Firms which satisfy criteria outlined in OSG's quality
procedure are added to the register, and may be selected to undertake surveys.
When a survey or survey assessment is required, a number of firms are contacted
and invited to tender for the work.
The application of Quality Assurance principles in conjunction with the
implementation of outsourcing can therefore be a useful tool for monitoring
and ensuring the quality of output from the private sector. In the case
of the Office of Surveyor General, it has served to improve the general
standard and consistency of information supplied by the surveying profession.
Digital Cadastral Map Base, Victoria
As part of the Victorian Government's broader strategy to outsource operational
activities, the management, maintenance and distribution of the entire State
Digital Map Base - Cadastral (metropolitan and rural) has recently been
contracted out to the private sector. In the first outsourcing of its type
in Australia, the management, maintenance, storage and distribution of the
metropolitan cadastral base had previously been outsourced in 1995, however
the new arrangements bring the two components together (Dept. Natural Resources
& Environment 1997). The Government will continue to own the intellectual
property associated with the map base, but the private sector may develop
the functions of the map base to keep it ahead of World Best Practice standards.
The benefits of outsourcing the State Digital Map Base include efficiency
improvements, lower costs and improved management of a single, homogenous
map base for Victoria.
Land Titles Office, Victoria
The core business of the Land Titles Office (LTO) is to provide certainty
of title to interests in land located in Victoria. It does this through
the maintenance of a land title register guaranteed by the State of Victoria.
The LTO ensures that the register is accurate and up-to-date thereby enabling
all users to rely upon its integrity and correctness when undertaking property
transactions such as development, sale, purchase and lending. By transforming
the way in which the LTO carries out its functions, it aims to be the foremost
land title registry office in Australia.
The LTO business strategy is to concentrate on its core activities. As part
of this strategy, the LTO will be outsourcing its information technology
functions, considered to be a non-core activity, and administering IT requirements
through a small core of policy and contract management staff. The Government
is currently conducting a tender process which will result in the private
sector undertaking tasks to automate the LTO records and business systems,
operate a licence for remote electronic access rights to land titles data
and to acquire LANDATA.
LANDATA offers direct computer access to State-held information about land
interests and land tenure through:
- Land Index (a general enquiry service providing information about land
ownership and its location)
- Property Enquiry Application (a service which offers access to the property
certificates required under the Sale of Land Act)
- Remote Search (gateway services to the current LTO Automated Land Titles
System and Unregistered Dealings System).
While the service delivery will be outsourced, the ownership of all titles
and related data will remain with the Government.
Tender outcomes will also result in full automation of the LTO, which requires
the conversion of paper land titles to a computer database, and supporting
documentation of plans of subdivision and instruments to a document imaging
system. New business systems are to be installed which will allow immediate
response to requests for documents and for updated transactions to be completed
with the customer in attendance.
These reforms will lead to substantial improvements to customer service,
improve accessibility to land titles data, and further facilitate the development
of an integrated, computerised land information system for Victoria.
Conclusion
Government services have traditionally been undertaken by the public sector.
With the implementation of the Victorian Government reform program however,
the focus is now on how these services can be produced most efficiently,
whether by the public or private sector. This has led to a greater involvement
by the private sector in the delivery of services once provided by government,
through measures such as privatisation, outsourcing and the provision of
private sector finance. Successful implementation of measures such as these,
rely upon a strategic choice of project, comprehensive quality control and
effective project management. These measures have already, or are currently,
being implemented within the public sector survey and mapping industry,
in order to increase product quality, improve customer service, and reduce
the costs, transaction times and complexity of the current systems. The
Victorian Government has a goal of "achieving best practice performance
by the State public sector contributing to world competitive performance
by Victoria's economy as a whole, and yielding enduring benefits for the
Victorian community" (Kennettt 1993). The measures taken to achieve
this has meant that Victoria is at the leading edge of public sector reform,
not only in Australia but internationally.
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