Dialogue: Shakeup aimed at ending those 'sinful bonuses'

By COLIN JAMES

A rumour swept through the public service last week: the three parts of the old Social Welfare Department were to be put back together. It's the sort of far-out rumour that is treated as a joke, but it's not.

The public service could be in for its biggest reshaping since the late-1980s, although ministers say no "big bang" is proposed and cabinet's thoughts are at an early stage.

There is a general and a particular impetus for this reforming zeal. The general impetus is that Helen Clark and some ministers are grumpy with the public service, for golden handshakes, sinful bonuses and suspect commitment to the Government's programme.

That antipathy spawned a State Sector Standards Board, which on Sunday laid out what ministers ought to be able to expect of public servants.

The particular impetus for reform is also pinpointed in that report. Among six impediments identified is: "State sector activity is remarkably fragmented and needs to be strongly oriented to whole-of-government issues." Ministers agree.

There are 39 departments, each headed by a turf-conscious chief executive, plus (excluding schools) 200-odd "Crown entities," with varying degrees of autonomy, many of which could do their work inside a department.

Britain, with 20 times more people, has half the number of departments. The state of Victoria has eight and the new Western Australia Labor Premier Geoff Gallop is soon to reduce 42 departments to around 22.

"The number of Government departments ... is making it very hard to deliver good government," Dr Gallop said on Sunday.

Paradoxically, Dr Gallop's aim - reducing waste and inefficiency - was what the 1980s reformers here sought.

Separating out policy units from regulatory units and service delivery units - some into Crown entities or state-owned enterprises run by boards of non-bureaucrats - aimed to give public servants uncluttered objectives.

In some cases that worked well. But some severed units fell below critical mass and delivery agencies developed duplicate policy skills. All have head office functions they used to share in big departments.

There is no doubt efficiency and focus has hugely improved, though mainly because of other elements of the 1980s reforms. But for half a decade ministers and expert analysts have complained that public servants are now in "silos," disconnected from each other.

Jenny Shipley put ministers into "teams" to coordinate departmental action, but Helen Clark has scorned teams.

Now the buzz-phrase is "whole-of-government." Jim Anderton is the most vociferous and in industry development has begun to pummel better and faster cross-portfolio cooperation out of public servants.

Helen Clark wants more of this. She has stalled a bill rationalising governance of Crown entities. Now she has told State Services Minister Trevor Mallard to develop a process for the cabinet to rethink the whole public service structure.

Since two of the three social welfare chief executives are near the end of their terms, including Dame Margaret Bazley, architect of the social welfare split-up, those portfolios make a logical starting point.

Good chief executives, State Services Commissioner Michael Wintringham has said, are proving hard to come by. So why not have one instead of three?

Hence last week's rumour that is more than a rumour, the harbinger of potentially sweeping change.

But not right away, even in social welfare. Mr Mallard fears, with excellent reason, that a fast major restructuring could lead to, in his words, a loss of direction, morale and people.

Public servants' morale is already poor. They feel devalued and shut out by an imperious, know-it-all Government and struggle to implement decisions without knowing the context which attendance at key meetings supplies. The standards board implicitly acknowledged that by adding, unbidden by its terms of reference, a statement of what public servants ought to be able to expect of ministers.

So the process Mr Mallard comes up with might be circumspect. But change looks like it's coming, if this Government gets enough time in office.

* ColinJames@synapsis.co.nz