Better Public Services Advisory Group Report - November 2011

Better services and value-for-money
Getting better outcomes for New Zealanders – within appropriate legal and constitutional
settings - is the highest calling for government and the state services. Improving the quality,
responsiveness and value-for-money of state services comes not far behind.
One powerful driver to improve quality and cost is to make more information available to
citizens. Citizens and businesses expect to have a say on state services: on what they need,
how they want it and who they get it from. This needs to be a routine expectation of both
agencies and third-parties that provide services. It means listening to – and being held to
account for acting on – this feedback, probably using the internet as a principal channel of
interaction. Amplifying the direct influence of citizens and businesses on service delivery is at
the heart of state sector reform in the United Kingdom and in Australia.
Harnessing the power of choice is also a feature of the discussion of best-sourcing in this
report. There are already good examples of gains in quality and price being captured through
the outsourcing of service delivery (eg, in the Accident Compensation Corporation [ACC]). The
Advisory Group considers that there is room to go further, in part by the state agencies
responsible for funding services getting much better at contracting in innovative ways. There is
currently a capability gap in contracting skills that needs to be addressed, alongside a clear
requirement for government agencies to consistently demonstrate that they have tested their
service offering against alternative forms of provision.
Much has been made of the proliferation of government agencies in New Zealand, with its
consequences for diseconomies of scale, higher overhead and transaction costs, and protracted
decision-making 2 . The Group supports this assessment. Some consolidation of agencies is
desirable, particularly where current arrangements make it harder to gain traction on results.
Disestablishing some functions is also worth exploring. The Advisory Group do not, however,
consider that a sharp reduction of agencies across the board would necessarily deliver better
performance. Restructuring is expensive and disruptive and can be counter-productive, at least in
the short term.
But there are multiple opportunities to rationalise accommodation or to consolidate functions
(such as corporate services or policy advice) across agencies which do not involve either the
disestablishment of existing entities or wholesale restructuring.
State services need to be built on a culture where these sorts of opportunities are consistently
sought out. Finding better ways to deliver value and better quality services needs to be front
and centre for all state employees – leaders, managers and staff. The Advisory Group has
seen sufficient examples of continuous improvement (eg, “lean” programmes at the Ministry for
Social Development, the Inland Revenue Department and at district health boards) or channel
consolidation (eg, at Land Information New Zealand) to be confident that further gains are
available.
2
See, for instance, the Report of the Advisory Group of the Review of the Centre, November 2001.
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