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Speech To The Public Sector Performance Conference

Minister Of State Services
Speech To The Public Sector Performance Conference
Copthawne
Plimmer Towers
Wednesday 3rd May 2000

Complying with the new Government's priorities and plans for improving public sector performance and accountability

I want to start by sharing a tale I heard very recently from a public servant.

She rang my office after a conversation she had with the office cleaning staff. When she asked one of the cleaners how they were, she received a very positve and cheerful 'great'.

When she inquired further to find out what could possibly be causing this upbeat mood, she was told: 'because of the new government'.

Her curiousity piqued, she inquired still further.

"Why?"

"The offices are cleaner.

"There's not as much food left on the floor.

"The staff are friendlier – they smile and say hello.

"People aren’t in as much of a hurry."

The cleaner's job was taking less time than it used to.

I was really heartened by this story.

Because while I know public servants are working really hard to implement the Government's policies and this was a bit of affirmation that we're going in the right direction. That in at least one agency people are working positively and are happy.

There has been a significant change of direction for the public service.

It was a change in direction that the New Zealand public voted for.

There are some within the National Party who would have you believe that a new Government should mean nothing more than new faces in the Beehive. They don't think we should change policies or processes away from those of their nine years in power.

Fortunately, the public service is a bit more in tune with reality.

By and large, they've realised that there is now a Government with quite different priorities and policy objectives.

I've been asked to speak about how the public sector can comply with the Government's priorities and plans for improving public sector performance and accountability.

To do so, we have to examine why there is a need for improvement.

Let me start by saying this. The Government believes that public service departments and other state agencies are critical elements of a functioning democracy. They have a vital contribution to make in creating an efficient, equitable and dynamic nation.

But there is definitely a public perception of a culture of waste and extravagance within the public service, and more widely within the state sector.

The WINZ charter flights, the HFA's furniture, the large golden handshakes. They all fuelled this perception and tarnished the concept of 'public service'. The vast majority of public servants got on with their jobs. But in the same way that politicians are often publicly admonished for the misdeeds of a few, unethical behaviour and lapses in judgment and accountability where there is any element of public ownership, paints a shadow over all of us.

Public agencies need to be more transparent and accountable than those in the private sector. We work in a system where we are using other people's money – the public's money.

Because of that transparency and accountability are paramount. And that transparency and accountability does not stop at financial matters. The public service is not like a business where there is, generally speaking, one bottom line – to make a profit for the owners.

The risk of failure extends to the risk of failing to meet the expectations of large sections of society.

Yet public administration has become dominated by a fragmentation into stand-alone administrative units and a contractualist output model for determining what those units do and how they get paid for what they do.

The desire to improve efficiency has created a certain imbalance – with financial competency taking too great a priority over other dimensions of competence – like capacity to develop and deliver services.

There have been good people lost. There has been a lot of institutional knowledge lost. There have been individuals who know the history of particular policy changes lost.

There have been people whose positions have been made redundant but who return to their desks the following week as a contractor on a much higher rate of pay.

How do we change all this?

There is no easy answer. There is certainly no quick solution. But I'm confident that the problems are not insurmountable.

We've got a number of initiatives on the go, which collectively start to address our concerns in real and practical ways.

Just two days ago, I signed an agreement with the president of the Public Service Association which outlines a partnership for quality between myself, as Minister of State Services, and the PSA as the representative of a significant number of employees within the public service.

It looks at how we can work together to secure quality public services.

It's based on the faith that those who work in the public sector have as much desire for improving their outcomes as those who the public sector serves – that is the Government and the public.

The practical implications of the agreement will be developed over the next few months between the PSA, the State Services Commission, and relevant chief executives.

A work programme will be developed that includes training of all involved in the process, provision of support and technical assistance, dissemination of best practice, and enterprise level negotiation and activity.

I talked earlier of the change of direction in Government.

We have set ourselves some huge challenges. We can't do it alone. To meet these challenges we need support from a strong, vibrant, and innovative public sector. We need people who are dedicated and committed to their work.

If public servants find their jobs satisfying and fulfilling; if management is constantly aware of ways to improve the working environment; if there is ongoing professional development – then I believe we can go a long way to improving the capacity and reputation of the public service.

Aside from this, the Government is investigating other ways to overcome what appears to have been a sustained running down of the skill base.

We've already reacted against what we see as excessive use of consultants for what is the core role of government. This should not threaten those of you here today from the consultancy world who provide specialised services that we would not wish to situate permanently within the public service.

But the Government does want to see the public sector attracting its fair share of bright young graduates. We want to invest in training our own people, and we want to offer modern-day career structures that will bring well-qualified men and women through to the ranks of senior management and chief executive positions.

We need change in order to meet the challenges we have set ourselves.

Those challenges are fairly clearly laid out in the six key goals outlined in the Budget Policy statement and circulated to chief executives.

Those six key goals are:

One: To Strengthen National Identity and Uphold the Principles of the Treaty of Waitangi
We must celebrate our identity in the world as people who support and defend freedom and fairness, who enjoy arts, music, movement and sport, and who value our cultural heritage. We must endeavour to uphold the principles of the Treaty of Waitangi.

Goal two is: To Grow an Inclusive, Innovative Economy for the Benefit of All
We want to develop an economy that adapts to change; that provides opportunities and increases employment; that closes the gaps and increases income for all New Zealanders.

Goal three is: To Restore Trust in Government and Provide Strong Social Services
We will work in partnerships with communities to provide strong social services and safe communities. We will work constructively in Parliament and promote a strong and effective public service.

Goal four is: To Improve New Zealanders’ skills
Education and training is the key to improving the nation's skills so that all New Zealanders have the best possible future in a changing world.

Goal five is: To Close the gaps for Maori and Pacific People in Health, Education, Employment and Housing
The social and economic gaps that divide our society must be reduced. We will support and strengthen the capacity of Maori and Pacific Island communities, particularly through education, better health, housing and employment. Better co-ordination of strategies across sectors is vital to this.

Goal six is: To Protect and Enhance the Environment
Let's rebuild our reputation as a world leader in environmental issues. We need to treasure and nurture our environment with protection for eco-systems so that New Zealand maintains a clean, green environment.

These six goals are a guiding statement of where we want New Zealand to head. But they also provide a point of reference for the public sector to focus on policy and performance.

They've been developed as 'Government Goals' as distinct from 'economic goals' or 'social goals'. You cannot govern effectively if social and economic matters are placed in separate silos.

I hope that the public service takes that to heart and is able to end the patch mentality that has been a feature of the last decade. Components of the administration are neither stand alone nor in competition with each other. One agency cannot congratulate itself for cost savings if the pieces then have to be picked up by another. In the end, the funds all come from the same pot. The government is indivisible; it has to take a whole of government perspective.

Co-operation and collaboration is a theme we are working on throughout the Government.

Take tertiary education for example. The newly established Tertiary Education Advisory Commission's job is to advise the Government on the appropriate long-term strategic direction of the tertiary sector. One of the main areas of advice we are seeking is ways to develop systems that will encourage institutions to work more collaboratively with one another and which will avoid duplication both in teaching, in research and in course development.

The new Science and Innovation Advisory Council will be required to tell us how public spending on science and research can be utilised more efficiently to produce technological advances.

We're working on partnerships with local government and other organisations to maximise the value of public investment in regional development.

On a similar note, we're going to tackle the way private sector practices have influenced the relationships between government and providers. They've been determined by over-using the principles of contracts. I can think of several examples within my own education responsibilities. The contractual requirements and transaction costs on organisations like REAP are so enormous that they seriously compromise the level of core service they are able to deliver.

So just as we are aiming to build “good faith” back into the employment environment, so we also believe there is a greater place for trust and cooperation in the dealings between citizens and officials. We need to change the mode of thinking that relies on very narrow contracts to drive and motivate people to cooperate and deliver results.

It’s a philosophy we need to take on board ourselves. As a Government, the requirements on the core public service need to enable them to move away from a preoccupation with the annual financial cycle.

Officials have been investigating the best way of giving due weight to the longer-term ownership interests of government. These interests need to be balanced against what outputs and activities Ministers want from departments each year to meet the Government’s policy goals and deliver regular business.

Effective public services are responsive to the diverse needs of groups and individuals. They respond to notions of natural justice and the rule of law; not to narrow tests of operating within the letter of the law.

So based on these principles, let me envisage what a new Capability, Accountability and Performance process for the public sector may look like:

 The Minister and the chief executive agree together on how the department will give effect to the government’s goals.

 The department carries out, or updates, its strategic planning, taking both a long and a short term view.

 The long-term planning will take into account the components of ownership – integrity, capability, strategic alignment and long run effectiveness - and will be captured in a strategic business plan.

 The deliverables for the coming year will go into an annual output agreement (similar to the present purchase agreement). The Minister and the CE will jointly sign off on these documents.

 The central agencies and other monitoring agencies like Te Puni Kokiri will work with the department on what they expect to monitor and review during the upcoming year. This will form the basis for an agreed set of expectations.

 A dialogue involving all of the parties will continue during the year. After that, the agencies will aim to produce a consolidated assessment of departmental performance against the agreed expectations. This will, among other purposes, contribute to the State Services Commissioner’s review of the CE’s personal performance.

 The Minister and the CE will jointly submit an annual report to Parliament.

These proposals have real potential for strengthening the accountability of both Ministers and their departments.

They involve Ministers more closely in setting direction for departments and ensuring they retain the ability to deliver Government’s programmes over the longer term.

They will also bring the central agencies and agencies like Te Puni Kokiri closer together, in order to provide consolidated monitoring and evaluation for the use of Ministers and departments.

A side benefit is that the paperwork demands on departments should be reduced, as a result of combining or replacing some documentation and reporting requirements.

I'd like to finish with a general comment about public services.

Effective public services are inherently fair. They are fair to the taxpaying public, fair to public service employees, fair to those who are regulated, and fair to those who receive services. The government expects government departments to build up an internal culture that applies tests of fairness to decisions about what is done, and how it is done. In a well functioning department, this should be virtually instinctive.

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