Politics: Serving up big changes in the public sector

Public sector managers can expect faster and more far-reaching change if National gets second term on November 26. This could be the biggest reshaping since the radical 1980s’ reforms.
One big driver is fiscal consolidation which requires the state to occupy smaller share of the economy. Another is political instinct: three of the governing parties want smaller state sector anyway.
But the public service is large and it votes (especially if made redundant). So when Bill English first pushed for deep change, he was in cabinet minority. This year his colleagues have been coming onside.
His timing might also be propitious. English notes that governments in our sorts of countries, against which we have traditionally benchmarked ourselves, are cutting back to manage debt burdens.
And, while the rising Asian states, with which we will increasingly trade and so increasingly compare ourselves, will expand their state services, that is unlikely to be to European (or our) levels.
That’s the push. The pull will come from the under-50s and particularly the under-35s, who expect goods and services to be fast, easily accessed, tailored and customised. The state has to remake itself to serve different public.
English’s initial approach was electric prod and stick. The stick was freeze on baselines, forcing reprioritisation and staff cuts. The prod was an invitation amounting to an instruction to chief executives – and his Treasury – to be imaginative about how to get “more with less”. As in policy, English has told officials to surprise him and shown he means it. He wants “culture change, not savings change”.
Some chief executives responded early and even enthusiastically. Over time most others have joined. That has helped change ministers’ minds.
Early this year Treasury-serviced “better public services” advisory group of senior chief executives and three private sector experts (who, importantly, know the public sector is different) was set up to inject new ideas. Some close to the group think the result could be as transformative and world-leading as the 1980 reforms.
Its brief is framed as clearer priorities (the government doing only what it is best placed to do), high-quality services and reduced waste. One element is “best sourcing” of providers, determined by the government for specialist services (such as prisons) and by consumers for services provided directly to citizens (such as rest homes). That does not come down to price alone. It aims to incentivise performance and innovation with varying methods of “payment”.
There is once again quest to gear services to “outcomes”, not just tick off the “purchase” of “outputs”. Reformers have found for 20 years that is easier said than done. One idea: develop high-level or big group outputs.
That requires changes to contracting, which might be standardised, though tailored where necessary, with standardised auditing to reduce outside providers’ often high compliance costs. They might be opt-in or opt-out, with guidelines as to where they are useful and where not. They could be applied internally within agencies.
Another is to bring functions together in inventive ways: some amalgamations but also clustering of agencies or activities rather than physically joining up, with more flexible financial rules allowing collective accountability.
This might be paralleled by super-ministers: watch if economic development and primary resources stay with single minister (David Carter? Steven Joyce?), with science under the wing.
Four-year agency budget plans (in place of annual plus projections) kick in next year.
And there is quest for efficiency: digitisation (leading to more open, engaged public service), shared back-office services and joint purchasing. Add privatisation of some commercial activities. Stir in Sir Peter Gluckman’s push for more use of scientific evidence in social policy. Add the application of actuarial assessment of future costs of inaction to calculate the return on early investment. And more stringent lawmaking rules.
It’s big and ambitious, perhaps National’s biggest second-term project. M

Colin James is New Zealand’s leading political commentator and NZ Management’s regular political columnist. [email protected]

Visited 4 times, 1 visit(s) today

Business benefits of privacy

Privacy Week (13-17 May) is a great time to consider the importance of privacy and to help ensure you and your company have good privacy practices in place, writes Privacy

Read More »
Close Search Window