Deals or grants – Which is the best regional development policy tool?
Deals are a new way of doing business in regional economic development and embody a collaborative approach to designing and delivering policy on the ground. Grants are the tried and tested approach, which are competitively based and remain the most commonly used tool. Having these very different tools in the policy maker’s toolbox is great – more choice to deliver better outcomes!
What makes each of these tools different? See Box 1 below for a brief outline of the tools and some examples of their use in Australia.
But it begs the question – which policy tool is best in what situations?
For many policy makers and regional leaders, the choice between them is fraught with risks and very little guidance.
Building on the Regional Australia Institute’s (RAI’s) growing work exploring flexible policy tools and the use of City Deals, we will address this knowledge gap. In 2018, the RAI will develop a guide for policy makers on why and when to use which type of policy tool.
Initial findings – which is the best policy tool?
When deciding between collaborative and competitive approaches, the best tool is the one that achieves the desired outcome most effectively.
Surprisingly, there is little consensus in the real world or academic space on which policy tool is best. European and UK evidence show that collaborative policy tools, like deals and co-design, have led to more resilient outcomes including stronger local leadership, flexible solutions, and more effective interventions. They are currently the preferred policy tool in regional economic development as identified by the OECD. Yet, a long history of competitive grants and commissioning has achieved transparent, efficient and procedural fairness.
Contribute your experiences
The purpose of this work is to ground test overseas findings in Australia and identify the conditions best suited to deals and grants. The final policy guide will better inform leaders and organsiations in regions who will be involved in the design and delivery of regional economic development policies.
As well as looking at the evidence about when and why tools are effective, the project will tap into the collective experience of policy makers and others involved in delivering policy on the ground. We are now on the lookout for examples of collaborative and competitive policy tools that may or may not have worked, so we can all learn from their successes and failures.
If you have a deal, grant or other policy example you would like to share, we would love to hear it and include it within our work. Please contact project leader Dr Leonie Pearson at [email protected]
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Box 1. What the different policy tools really mean
Deal making is a collaborative process whereby one or more public agencies craft a solution to a policy issue using consensus-driven dialogue with diverse parties who will be affected by the solution or who can help to implement it.[i] A favourite of many coordinating departments, it has been tested across a variety of areas, for example Indigenous issues and city development, including current City Deals.[ii]
Co-design is increasingly being used by both government and the community sector to describe a range of activities and processes used in the design of services and products that involve people who use or are affected by that service or product.[iii] Often used in the social services sector, for example Child Story by New South Wales Family and Children Services.
Commissioning is the process of planning, agreeing and monitoring in a continuous way the delivery of governmental services. It usually involves purchasing service delivery models from non-government providers.[iv] Has been used in the UK and now Australia for health, for example the Australian Department of Health has deployed commissioning in its Primary Health Networks.
Grants are the competitive procurement of services through competitive bidding processes, where choice of preferred provider is decided on via a range of ‘measurable’ attributes that structure the procurement process.[v] Is generally considered the approach for most regional development funds, as with most other departments. See the federal grant register, Grant Connect.
[ii] O’Flynn, J., 2009. The cult of collaboration in public policy. Australian Journal of Public Administration, 68(1), pp.112-116.
[iii] Burkett, I. (2016) Introduction to Co-design, at https://www.yacwa.org.au/wp-content/uploads/2016/09/An-Introduction-to-Co-Design-by-Ingrid-Burkett.pdf
[iv] Dickinson, H., 2014. Public service commissioning: what can be learned from the UK experience?. Australian Journal of Public Administration, 73(1), pp.14-18.
[v] Entwistle, T. and Martin, S., 2005. From competition to collaboration in public service delivery: A new agenda for research. Public administration, 83(1), pp.233-242.
[vi] Kuitert, L., Volker, L. and Hermans, M.H., 2017, September. PUBLIC COMMISSIONING IN A NEW ERA: PUBLIC VALUE INTERESTS OF CONSTRUCTION CLIENTS. In Proceeding of the 33rd Annual ARCOM Conference (Vol. 4, p. 6).