Better Public Services Advisory Group Report - November 2011

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2.6 But it comes at a cost. The result is a large number of agencies, with roles that can overlap or duplicate each other. And ministerial arrangements (the previous government had 78 ministerial portfolios) reinforce this. The most challenging social and economic issues facing New Zealand need action across agency boundaries, and currently this action takes too long. Having many agencies and a culture of high levels of consensusseeking consultation between agencies slows progress down. Low incentives to capture economies of scale 2.7 An obvious consequence of having many small, focused agencies with operational autonomy has been a lack of economies of scale. Each department has tended to consider its own accommodation, ICT, processing and procurement needs in isolation. Over time, this has led to higher back-office costs and incompatible systems. There are currently few ways of tackling issues common across the state sector (such as prioritising investment in ICT). Duplicating activity and failing to capture economies of scale are inconsistent with meeting the current fiscal challenge. Slow pace and little innovation 2.8 As described above, some government agencies have become accustomed to relying on increasing government funding to meet cost pressures. Recent budgets have made it clear that those “cost plus” days are now over. If anything, the fiscal environment is likely to get harder still. So the state services need to find new and better and smarter ways of doing things. Innovation has become an imperative. Currently, however, in the New Zealand state services, innovation is being stifled by a lack of capability, an undue degree of risk aversion on the part of chief executives, boards and Ministers and little consideration of how to manage risk in this context. 2.9 More interaction with citizens, including via new technologies, will require a new level of ICT expertise amongst state services organisations. Looking at where government could better source goods and services, and capturing the potential gains, requires skills in commercial contracting. These sorts of skills are currently scarce. 2.10 New Zealand’s state sector laws were world-leading when introduced, and still are in many respects. But they, too, are now getting in the way of more responsive, flexible and cost-effective service provision. The Public Finance Act 1989 governs the use of financial resources, with clear delegation of financial decision-making to individual chief executives. Change is needed to allow resources to be applied to achieving results that span more than one department or that fall between the responsibilities of individual departments. 20
Leadership 2.11 One of the defining characteristics of the current New Zealand public management system is how it concentrates decision-rights and accountabilities with the chief executives of agencies (or boards of Crown entities). These arrangements support a strong ability to deliver against the “vertical” commitments within a single agency but have constrained “horizontal” leadership – within sectors, across functional areas and for the system as a whole. 2.12 Whilst there is some good leadership capability and capacity within the New Zealand state services currently, a much better level of leadership is required. In the Advisory Group’s view, the results from recent agency reviews undertaken through the Performance Improvement Framework (PIF) process suggest that some of the most critical leadership capabilities are relatively weak. • Leadership teams are focused on the components of the business, not on governance. • Leaders are responsive to Ministers but are weaker in their ability to provide more strategic advice that is robust over time and that will meet future needs. • Leaders do not work effectively across organisational boundaries. • Leaders struggle to manage the people and change elements of their role. • Leaders are not using information effectively to drive their business, and lack the metrics to determine the effectiveness and efficiency of their business model and operations. 2.13 The current New Zealand public management system has underperformed in driving results across departments, capturing economies of scale across agency boundaries, fostering scarce skill sets and talent for the benefit of the system, developing consistent interfaces for citizens and businesses and prioritising and planning across the whole public sector. For leaders to exercise effective horizontal leadership, the Advisory Group considers that decision-rights will have to be rebalanced to provide a clear mandate for leading across agency boundaries. 2.14 The State Sector Act 1988 supports a politically neutral public service, and devolves responsibility to chief executives for running government departments. Again, an overemphasis on clear vertical lines of accountability can get in the way of flexibility across the state services. 21
Page 1: Better Public Services Advisory Gro
Page 4 and 5: Foreword from the Chair New Zealand
Page 6 and 7: My thanks also go to the Secretaria
Page 8 and 9: • clarify and strengthen leadersh
Page 10 and 11: Leadership will be critical The Adv
Page 12 and 13: Summary of recommendations Better r
Page 14 and 15: Stronger leadership, the right cult
Page 16 and 17: 1.2 The primary focus of this repor
Page 18 and 19: Affordability 1.7 The state sector
Page 20 and 21: Conclusion 1.11 The case for change
Page 24 and 25: Conclusion 2.15 Putting together th
Page 26 and 27: How a focus on results can make a d
Page 28 and 29: More flexible results oriented stat
Page 30 and 31: • Policy hubs: One of the reasons
Page 32 and 33: might be merit in the establishment
Page 34 and 35: Statement of Intent and a four-year
Page 36 and 37: Better results: recommendations Gea
Page 38 and 39: How the Canterbury earthquakes chan
Page 40 and 41: Decision-rights: Potential to harne
Page 42 and 43: 4.14 Innovation also drives out cos
Page 44 and 45: Reducing duplication and consolidat
Page 46 and 47: Costs of administrative and support
Page 48 and 49: Better services and more value-for-
Page 50 and 51: Functional leadership 5.6 Leadershi
Page 52 and 53: esponsibilities. Current mandates c
Page 54 and 55: will be important for Ministers and
Page 56 and 57: Chapter 6: Capturing the gains 6.1
Page 58 and 59: Wider state sector (Crown entities)
Page 60 and 61: Annex 2: Chief executive-led work o
Page 62 and 63: Business-facing services This is es
Page 64 and 65: Marine resources (including mineral
Page 66 and 67: The justice sector This sector has
Page 68 and 69: More tailored reporting • Flexibi
Page 70 and 71: - it is a board of equals - there i
Page 72 and 73:
Soft-wired sector (eg, justice) Sec
Page 74 and 75:
MSD 1,198 18,334 9,210 9% 25% 13% 4
Page 76:
NZ On Air 130 12 .. .. .. NZ Qualif
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Better Public Services Advisory Group Report - November 2011

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