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Widespread change needed to achieve public sector efficiency

Press release

16 March 2012

Widespread change needed to achieve public sector efficiency

Alastair Boult, National Director, Government Advisory for business advisory and accounting firm Grant Thornton New Zealand, looks at the Government’s drive for more efficiency in the public sector following the Government’s announcement yesterday of a super ministry, the Ministry of Business, Innovation and Employment.

Government moves at driving more efficiencies out of the public sector should be applauded, but more is needed than tinkering with mergers of government departments, said Alastair Boult, National Director, Government Advisory at business advisory and accounting firm Grant Thornton New Zealand.

“We welcome the Prime Minister’s speech on improving the way the public sector delivers services – particularly the result driven focus,” Mr Boult said.

“In his speech, the Prime Minister recognised that there are pockets of really effective change in the public sector, but there’s still plenty of work to be done. Change has to be more widespread.

“The Government needs to give the public sector the flexibility, the encouragement and the mandate to make real change.

“To achieve lasting efficiencies and long-term gains, the public sector as a whole needs to recapture its drive for innovative thinking, resulting in positive transformation,” Mr Boult said.

Grant Thornton’s recent White Paper on innovation concludes that while innovation in the private sector continues to grow, the level of innovation has trailed behind in the public sector.

As of 2007, New Zealand spent only 1.18% of gross domestic product on R & D. However, the Government’s own R & D investment is also low with a 2007 OECD audit of New Zealand innovation policy ranking us 23rd out of 32 economies in the share of government R & D funding allocated to the private sector.

“The chronic lack of investment in innovation has led to declining efficiency, poorer services and a loss of value for taxpayers,” Mr Boult said.

Grant Thornton believes New Zealand can reclaim its innovation mojo but it requires urgency and commitment, which will involve:

• Clear leadership and commitment from politicians of all political hues on the importance of innovation in government.

• Talented, experienced public sector managers who recognise creativity and are incentivised to take managed risks.

• The implementation of explicit innovation processes within government with both the people and resources to drive real change.

• Strong communication with the New Zealand public about the case for change and the economic and social benefits.

“There is a policy and leadership gap in the political marketplace which Government needs to fill urgently,” Mr Boult said.

ends

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