The public service is headed for sweeping changes in the wake of a high-powered “review of the centre” commissioned by State Services Minister Trevor Mallard — though they will not be introduced as a big bang.
Mr Mallard will today confirm the cabinet’s agreement to the changes. A change implementation advisory board is to be appointed to ensure the changes are driven through.
The aim is to coordinate state sector activity better and make it more responsive to the public. Ministers want departments and Crown entities working to long-term goals with clearly set priorities. There is also a strong focus on improving the quality of staff and so of policy advice, relating it more directly to experience in the field.
This might over time improve the quality of business regulation — though it will not change decisions based on political pledges.
The changes will mean “widespread and far-reaching change”, the review says. But, unlike the 1980s reforms, they will be incremental, so the review group says “strong leadership from ministers” will be needed to counter the risk that incremental change will lose momentum. Mr Mallard says the cabinet has agreed a decision-making timetable which will run through 2002 and into 2003.
The review group comprised the bosses of the three powerful “central agencies” — Department of Prime Minister and Cabinet chief executive Mark Prebble, Treasury Secretary Alan Bollard and State Services Commissioner Michael Wintringham — plus Angela Foulkes, former Council of Trade Unions secretary, Paul Cochrane of the Public Service Association and Brenda Tahi, a senior public servant turned consultant.
It was set up in August in the wake of the rushed merger of Work and Income New Zealand (WINZ), which delivered benefits, and the Ministry of Social Policy (MSP), which developed social policy, into the new Ministry of Social Development.
This merger ensured the departure of Christine Rankin but was also because ministers thought the 1980s split of policy development and operations (delivery of services) — which was aimed at stopping operations staff turning policy development to their own ends — had resulted in policy losing touch with frontline experience and needs.
The MSD merger was seen at the time by senior ministers as a pointer for similar re-amalgamations.
In some portfolios the split has worked well — transport is usually cited. But in others — justice is cited as an example — the split has resulted in small policy ministries that lack critical mass and operational agencies developing their own policy capability.
The review group has recommended a review of policy/operations splits “with a view to reversing them unless they are clearly adding value”. It also wants officials to report to ministers next year on how to get a good two-way flow of ideas between the local level and the policy analysts at head office in Wellington.
Another spur to the review of the centre was that ministers thought the whole state sector is too fragmented, with 37 departments and dozens of Crown entities — semi-independent government-owned agencies run through boards nominated by ministers.
The review group has recommended “a careful process of structural consolidation”, merging small agencies, including some Crown entities, with others or with a related larger department, in which the small agency might retain a distinct identity (as the Ministry of Consumer Affairs does in the Ministry of Economic Development) but draw on the “parent” department’s corporate services.
The review group calls these “federal” departments. The state of Victoria has eight departments. Western Australia is halving the number of its departments.
The inclusion of Crown entities follows Prime Minister Helen Clark’s stalling in December 2000 of legislation to rationalise their governance. The Tourism Board’s semi-independence prompted a heated standoff between it and then Tourism Minister Murray McCully in 1998-99 and led to his resignation.
The review wants the overarching management and monitoring powers the State Services Commissioner has over departments extended to Crown entities, except Crown companies. (The review is silent on the governance of quasi-judicial Crown entities such as the Commerce Commission which have statutory independence from ministerial direction.)
The bother about fragmentation, which has worried senior public servants as much as ministers, is that it inhibits coordination.
The 1980s reforms gave departmental chief executives control over staffing and other resources and management of finances and administration. Provided they delivered on their “outputs”, ministers were not to quiz them on “inputs”. They were encouraged to import private sector management practices.
This has greatly increased efficiency, productivity and focus on those to whom the services are delivered — gains the review group does not want to see lost.
But it also created a “silo” mentality, with departments operating individually. The review says this “inhibits seeing whole-of-government connections”. Staff, too, lost sight of what old hands call the “public service ethos”, an awareness (as the review group puts it) that they are members of a larger entity than their own entity.
The governments of the 1990s tried several mechanisms to improve coordination and reduce duplication, with some success. But not enough, the review group says.
It wants — and ministers have agreed — formal networks of “related” agencies, to “better integrate policy, [service] delivery and capability-building”. These will be both at head office/chief executive level and also at regional level, including with local government, voluntary agencies and Maori. They will be in addition to the web of interdepartmental committees that entangles Wellington.
At the local level, the review group proposes “circuit-breaker” teams drawn from several agencies to “find creative ways of solving problems that have proved intractable over time”. It gives Northland housing as an example.
The coordination is also intended to mesh with another major recommendation: heavier focus on overarching long-term goals and objectives and clear prioritisation.
In theory ministers are supposed to do this specification of “outcomes” but the record has been at best mixed, despite several initiatives in the 1990s. Partly that has been because, the review says, “the system is not particularly good at assisting ministers to articulate their common objectives and priorities”. (Code for: the ministers don’t have the nouse to do it on their own.)
To remedy this, the review group wants high-level objectives and priorities set out in statements of intent specifying outcomes and evaluation, capability and relationships as well as outputs. The present minutely detailed “purchase agreements” between ministers and chief executives are to be replaced with “output plans” tied to the objectives and priorities (already being trialled).
The review group also wants much more evaluation of government programmes to monitor whether they are making progress towards the objectives. The lack of evaluation to identify successes and failures has been one of the scandals of the public service.
It also worries about “capability” — the quality and numbers of staff to do what ministers ask. So it wants a public-service-wide programme to identify and develop high-flyers.
To go with that, the review wants the progressive adoption of common standards across the public service, sharing of good management practice, joint training systems and generic public service standards and qualifications.
And the review group tackles one of the thorniest issues for public servants: the pressure not to take risks that comes from high visibility and media probing of failures. This inhibits creative solutions. So there should be an “innovation project” to identify ways of encouraging innovation and setting indicators to measure innovation over time.
Overall, the changes represent a major redirection — though not wholesale reversal — of the 1980s reforms. Whether it will make real change on the ground will take time to find out.