Board showing frustration over stately pace of reform

By BRIAN FALLOW

The state sector is lifting its game but the pace of change is too slow, says a committee of private-sector people set up to advise the Government on how to lift public service performance.

The State Sector Standards Board, appointed two years ago, is chaired by Comalco executive director Kerry McDonald and includes Elmar Toime, Angela Foulkes, Rangimarie Parata Takurua, John Martin and Jim Turner.

Behind the measured language of its most recent report to State Services Minister Trevor Mallard is a palpable frustration at the sluggish pace of reform.

The state sector is so large and its influence so pervasive, it says, that any weakness in its performance has a serious influence on New Zealand's performance.

Of course significant cultural change in organisations cannot be achieved overnight, but "vital improvement processes take years, when weeks or months would be more appropriate".

Talking to the Herald McDonald went further, saying that State Services Commissioner Michael Wintringham was not getting the support he needed from the other central agencies.

"I don't think there is the sense of urgency coming from the Treasury or the DPMC [Department of Prime Minister and Cabinet]," he said, although Wintringham disagrees.

McDonald says the review, prompted by the board's earlier reports, has got bogged down in process and become a pedestrian affair, bereft of any innovation.

Many of the chief executives of Government departments are administrators rather than leaders, immersed in the small detail of their organisations' work.

"They should be stepping back from all that and focusing on how to get the organisation in total to achieve its potential."

And at the bottom of the pyramid public servants are not subject to a systematic approach to their training and development, McDonald says.

"They may be getting some training, but not decisively upskilled in ways that would lift productivity and warrant higher pay.

"Most public service organisations would say that they have a performance management system, but in our view they are not well designed or in effective use."

Performance management system is management-speak for a process of dialogue between subordinates and their managers intended, among other things, to identify areas where additional training is needed, and to review performance.

Too often, McDonald says, they are regarded as part of the disciplinary process rather than something constructive.

The board also reiterated its earlier concern at the "Balkanisation" of the public service, a tendency to work in compartments and a weak commitment to whole-of-government approaches.

Wintringham sees some merit in the board's criticisms.

"We have a system designed in the 1980s, which was driven by the need for cost efficiencies, and you get those efficiencies by having organisations with a small number of objectives, flat structures, specified outputs or deliverables, and systems to drive them."

That model, however, is all about vertical relationships within departments, not horizontal connections between them, especially at the front line.

"The review of the centre has a group of chief executive, from Health, Labour, Child Youth and Family, and Social Development all working together to find what examples of best practice there are, what works out at the front line and how can they be applied more broadly," Wintringham says.

The board's report says, "The protracted processes of achieving consensus among the State Sector leadership group, including relitigation of policy issues, can lead to delays and dilution of clear Government intentions, which within a three-year electoral cycle can have the effect of defeating the democratic process."

Wintringham says the three Australians who now head public service departments - Inland Revenue Commissioner David Butler, Government Statistician Brian Pink, and Barry Carbon who heads the Ministry for the Environment - have all said they find the environment among their chief executive colleagues highly collegial, in contrast to Australia.

Wintringham accepts that the public service has not invested in training people in leadership skills to the extent it might have, although this is being addressed.

He adds that the performance criteria by which they are held to account - a legacy of the 1980s - is "overly contractual and overly specified".

"I have spent a lot of time moving away from an overemphasis on compliance - making sure they have complied with the various requirements, to have an energy conservation plan and so on - to much more about what is the business of the organisation? What they are trying to achieve? What is the capability they are trying to build to achieve it? How far they are on the journey?

That takes time and requires a more sophisticated engagement.

"I agree with [the board's] emphasis but I think we are further down the path than they give us credit for."

He believes the board may be overestimating the magnitude of the gains available.

The majority of Government expenditure is transfer payments (like benefits and superannuation) or health spending, controlled by the district health boards, or payments through the school and university system, a large part of which is salaries.

The core public service consists of around 32,000 people mainly in such departments as Inland Revenue, Conservation, Corrections, Courts, Social Development and Child, Youth and Family.

"In most of those areas I think that considerable efficiency gains have been made over the past 15 years, whatever measures you use.

"We can continue to squeeze a bit more at the margin here or there. But I doubt there are major gains to be made."