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ARC Secretariat --- "Report No 42 - The Contracting Out of Government Services - Backgrounder to the Report" [1999] AdminRw 1; (1999) 51 Admin Review 1


The next three articles deal with the Council's Report No 42, The Contracting Out of Government Services. The first article provides some background to the Report. The subsequent articles are edited texts of speeches presented at the launch of the Report, on 27 November 1998. Copies of the Report can be obtained by contacting the Council's Secretariat on tel (02) 6250 5800, or by visiting the Council's website at


ARC Secretariat

Recent years have seen substantial developments in the way in which the Commonwealth Government carries out its business. In particular, the Government has expanded the role of contractors in the delivery of services that were previously the domain of government. This has generally been achieved by way of establishing a contractual relationship between the Government and a service provider.

However, by moving the delivery of services from the public to the private sector, the ability of the existing administrative law system to achieve administrative justice has been challenged.

For this reason, the Council undertook a comprehensive review of the administrative law implications of the contracting out of government services. The recommendations adopted by the subsequent report, Report No 42, The Contracting out of Government Services, were informed by two central principles:

• first, the Council considered that the contracting out of government services should not result in a loss or diminution of government accountability, either to individuals or to the Parliament; and

• second, contracting out should not negatively affect the ability of members of the public to seek redress where they have been affected by the actions of a contractor delivering a government service.

The Council also considered that the Government, rather than individual contractors, should normally be responsible for ensuring the accomplishment of these principles.

The Report found that the current administrative law system is incapable of dealing with the provision of services by a non-government entity.

Further, it was found that alternative avenues of redress, in lieu of traditional administrative law remedies (such as contract and tort law, consumer law, and industry complaints schemes), do not adequately fill the gap. The Report found that, as a consequence, there has been a substantial reduction in individual rights and government accountability associated with contracting out.

The Report then went on to make a number of recommendations on how the contracting-out phenomenon can be managed, to incorporate appropriate administrative law precepts. These included:

• requirements for information management of the contracting out process, so that the process can be adequately monitored and reviewed;

• a requirement that any contractor involved in the process has in place sufficient complaint-handling systems;

• availability of the Commonwealth Ombudsman to investigate conduct of contract service providers;

• extension of the Freedom of Information Act 1982 to cover all information held by contractors that relates to government contracts; and

• extension of merits review procedures, and Administrative Decisions (Judicial Review) Act 1977 procedures, to decisions of contract service providers which are made under a delegated decision-making power.

At the launch of the report on 27 November 1998, Professor Marcia Neave AO, then President of the Administrative Review Council, and Ms Robin Creyke, a Reader in Law at the Australian National University, spoke to the new Report. Copies of these speeches are extracted below.

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