'Basic boring' elements now missing from public service

By Brian Fallow

WELLINGTON - A "debilitating erosion of capability" in the civil service has to bear some of the blame for New Zealand's poor economic performance, says Comalco New Zealand's chief executive, Kerry McDonald.

Elaborating on his trenchant criticism of the public sector in a speech to the Institute of Management's Canterbury division last week, he said the increasingly negative public reaction to reform policies related not to their objectives, but to poor design and poor implementation.

"In the private sector, making sure the organisation, systems and processes are absolutely sound is fundamental. If you haven't got that right, you haven't got a business," Mr McDonald said.

"Unfortunately, although the public service had evolved towards a private sector model, those vital elements were largely missing.

"No one has given guidance within the State Services Commission about how a department should formally be organised.

"For example, how many levels of management, what tasks should be performed at each level, therefore how do you delegate, and if you are delegating how do you hold people accountable?

"It is this basic, boring stuff that is the heart of getting a working organisation," Mr McDonald said.

"Ministers are not selected on the basis that they are experts in this area. It should be the role of the State Services Commission. If it doesn't do anything else it should do this."

In the present environment "improvement" became endless cost-cutting, which increasingly cut muscle, he said.

The Minister of State Services, Simon Upton, said it was incontrovertible that while the Government made a priority of debt reduction and social spending, the core state sector, responsible for policy advice and regulation, had been significantly downsized.

"There must have been an assumption in making those cuts that we could continue to deliver for less, and given the fiscal pressures we didn't have a lot of option, but I have no doubt a price has been paid," he said.

More generally, ministers' focus had overwhelmingly been on one side of their relationship with their departments: the purchase of services on taxpayers' behalf.

Too little attention had been paid to the Crown's role as owner of these organisations.

"That involves some sort of engagement between ministers and chief executives on strategic business plans: "What is the management doing to build an organisation that not only delivers this year but can deliver five years from now?

"Faced with a problem like an excessive turnover of staff when budgetary constraints ruled out the obvious solution of paying people more, what could a minister or departmental chief executive do?

"It may be in some cases you have been trying to maintain a department as though the funding were 30 per cent above what it is, and it's just a pretence.

"Increasingly ministers have to be prepared to accept that if they want new things done then that means putting a line through other things. And good management has to be quite clear about what is and isn't deliverable [within given funding limits]."
He said that as in the private sector, good management presupposed good governance.