Efficiency through Contestability Programme –
Contestability Reviews
This fact sheet describes Contestability
Reviews and provides an overview of their
purpose and intended impact.
In the 2014-15 Budget, the Government
introduced a Commonwealth-wide
Contestability Framework to be applied
through the Efficiency through Contestability
Programme (the Programme) led by the
Department of Finance (Finance).
The Programme aims to simultaneously
reduce costs, and meet the Australian
community’s increasing demand for better
quality government services. To do this, it is
important to ensure that government
functions are undertaken by the organisations
most efficiently and effectively able to do so.
In 2015-17, Commonwealth entities will
apply contestability and competition in a
phased programme of Portfolio Stocktakes,
Contestability Reviews and Functional and
Efficiency Reviews.
Contestability Reviews
Contestability Reviews provide an
opportunity to consider whether
identified functions can be improved
through delivery by alternative means.
In conducting Contestability Reviews,
entities will play a leading role in
exploring how government functions
can be delivered more efficiently,
effectively and innovatively.
Contestability Reviews will look at specific
functions and consider:
 the objective of the function, how it is
currently provided, and the associated
costs
 what other alternative approaches are
available (including provision by other
organisations, and approaches that
improve the efficiency of the current
provider)
 the costs, benefits, risks and any other
considerations for each alternative.
Any reasonable scope for change may
be explored, such as removing existing
barriers to efficiency or exploring
innovative approaches (such as
payment by outcomes) in order to
achieve government priorities.
Functions that exist across one or
more entities may also be subject to
Contestability Reviews, providing the
opportunity to consider greater
efficiency for whole-of-government
outcomes. Contestability Reviews will
identify and recommend the most
efficient approach to providing the
function, including a proposed
implementation plan.
What is Contestability?
The prospect of competition in public sector
activities, to motivate efficiency and
performance improvements in policy,
programme and service delivery.
Contestability Review Key Steps
The Reviews will be conducted in a staged
process. These are:
1. Scope
 Select a Review Leader for the entity
 Confirm Terms of Reference with Finance and
the Contestability Programme Steering
Committee (CPSC).
2. Analyse
Consider and select alternative approaches for
the function from the spectrum of contestability.
3. Assess Options
Assess the shortlist of viable alternative
approaches for contestable provision including:




Risks and opportunities
Costs and benefits (theoretical and practical)
Assess market maturity
Consult with stakeholders.
4. Recommend Actions
Analyse implementation and management of the
recommended alternative approach/es over the
short, medium and long term.
Identify the best alternative approach/es and
make recommendations about potential
implementation.
5. Submit
Submit a draft report to Finance to confirm it
complies with the Terms of Reference and
Contestability Framework and is sufficiently
rigorous.
Conducting a Review does not imply that a
function will necessarily be modified or that it
will be transferred outside of government.
Instead, a Review should consider how the
functions can be delivered most efficiently in the
future. This will require considering whether
functions need to move from within to beyond
the boundary of government.
Roles and Responsibilities
Entities will be responsible for the conduct of
Contestability Reviews. A lead entity will be
determined where a Review covers multiple
entities.
Entities are to nominate a Contestability Review
Leader, usually a senior executive, to be
responsible for the conduct of the Review and for
liaison purposes.
Finance will provide an assurance and support
role to entities conducting Contestability
Reviews.
Governance for each Contestability Review will
be provided by the CPSC. The CPSC consists of
First Assistant Secretaries from four departments
and is chaired by Finance. The CPSC will assess
the Review to ensure it meets the required
standards in line with the Terms of Reference, the
Contestability Programme Guidelines and its
analysis is robust and sound.
Submit the final report to the CPSC, and in turn,
to the Finance Minister.
The Finance Minister and relevant Ministers will
receive advice from the CPSC about the
Contestability Review and its recommendations.
Depending on the Review’s recommendations,
subsequent action may be required to agree and
implement the recommendations.
6. Implementation
Pending approval from the Government,
implement the Contestability Review’s
recommendations.
For more information about the
Contestability Programme
W: http://www.finance.gov.au/resourcemanagement/governance/contestability/
E: contestability@finance.gov.au
T: 02 6215 2991