New model in store for state sector

16:00, Mar 02 2012

A warning to the public, plain English champions and bewildered civil servants.

Two more examples of impenetrable public service jargon are about to enter the national lexicon: "outcomes" and "outputs".

With the Government poised to deliver its next round of state service reforms, bureaucrats are braced for not just the axe cutting another swath through their jobs.

Those left standing will be the guinea pigs in a radical culture shift.

Prime Minister John Key is to outline National's plans to make the public service more efficient later this month. What is becoming increasingly clear is this is about much more than sacking officials, dumping "policy waffle" and merging IT and payroll departments.

"The state sector could do much better at achieving results," Mr Key cryptically told us in January.


While Mr Key will front the reforms, they are being driven by Finance Minister Bill English – who is deeply committed to remodelling the sector. And no wonder – he pays the bills and it accounts for one third of New Zealand's economy.

Essentially, in a drive that would send Sir Humphrey Appleby into apoplexies, the public service is about to become more flexible.

It's a remarkably simple idea but one that strikes at the very heart of the modern-day civil service. At present individual departments and agencies work on their "outputs" – what they deliver. The social development ministry pays out benefits, Corrections builds more prisons. Annual incentives are set, targets are ticked off and budgets are (usually) met. They work in – excuse the jargon – silos.

By and large "outcomes" – the big picture stuff – are not catered for.

The Ministry of Social Development has already made strides with its Community Link centres, a one-stop shop for social needs – health, housing, education, and employment.

The theory goes that if the standard of living is improved, in the long term the Government has to pay less in benefits, there is less pressure on hospitals, reduced crime means less prisons and the workforce is better educated.

It is achieved by more collaboration among departments, cutting out bureaucratic middlemen, and that political bogeyman: privatisation.

National's risk lies in selling it to the public. So far most folk struggling to keep their head above water are largely unmoved by the prospect of bureaucrats losing their jobs. Especially when they come from the management tier or are high-earning overseas diplomats.

The sweetener for ordinary folks is a virtual public service – being able to apply for driving licences on our smartphones.

But for every gen X-er merrily swiping on their iPhone, there is a frustrated pensioner or ratepayer gritting their teeth as a voice-activated phone line tinnily repeats, "computer says no".

Take away streetfront services and human contact, and add it to job cuts in the health service (as we have already seen in Hawke's Bay, Whanganui and Waikato) and the mood starts to turn sour.

Politically, "outcomes" are a lot more risky than easily measured "outputs"; it takes just one rogue NGO, or one mis-timed question from the Opposition about a taxpayer funded hip-hop scheme or a misappropriation of funds.

Forerunner Whanau Ora has already come under attack for "squandering" taxpayer funds on family reunions. The public has struggled to grasp how Tariana Turia's pet project delivers benefits to those it is meant to help.

Farming out work to private providers when you are sacking public sector workers by the thousand is just fodder for the Opposition.

When the voters can only see cutbacks and reductions – and the promised benefits are intangible and some way off, state sector reform starts to look as appetising as, well, selling off state-owned assets.

To cushion against the public disapproval, the course of this reform and budget cycles have been carefully plotted. Expect to see the jobs' hatchet swing during the next six months. By the time the next election comes around, some of the benefits will be starting to kick in.

National – and in particular Mr English – has also learnt lessons from the dark days of the 1990s, when it gutted the civil service. In areas such as health, housing and social welfare, it has wisely harnessed the expertise of those very groups and NGOs who would be expected to lash out at reforms driven by Tories.

However, from within an already bruised and demoralised state sector painful culture-wide reforms will be met with resistance. For entrenched bureaucrats deeply attached to their processes and individual agencies and departments this is scary stuff. Especially when it is coming from a Government that has trimmed the fat and left them with a heavier workload.

And one which seems happy to hang senior bureaucrats out to dry – as evidenced by Foreign Minister Murray McCully's furious backpedalling on Mfat's cost-saving proposals in Parliament this week.

For this model of public service to work, the political masters need to be hands-off.

In its purest form, we might see super-ministries, although National is shying away from this for the time being. Instead of merging Corrections, police and justice into one monster law and order department, they have established an umbrella board to oversee co-operation.

Which means we are also unlikely to see the logical conclusion of this shift: a much smaller executive.

A half-serious proposal for a seven minister Cabinet was recently floated – and hastily dismissed. National has instead opted for "cluster" ministers – Steven Joyce overseeing economic development, David Carter taking on primary industries.

It will come as no comfort to the thousands of public servants who are the sacrificial lambs to this radical reform, that hanging on to power is really the only "outcome" that drives politicians.