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| Report of the Advisory Group on the Review of the Centre | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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New Directions - The Proposals46 The picture that emerges is a system that provides a reasonable platform to build on, but one where some significant change is needed. We have identified three priority areas for change:
47 The nature of the changes we think are needed is as follows:
48 Moving in these new directions requires action across the board. The proposals that follow represent our view of good places to start. They are not a comprehensive list of things to do, nor are all of them new. A number of initiatives to address these issues are already underway across the state sector, many of them from the last 18 months, including the Partnership for Quality Agreement with the PSA, the work of the State Sector Standards Board, collective work by chief executives, work on social indicators underway in the Ministry of Social Development and other departments, the Pathfinder project on outcomes and the development of Deputy Commissioner Teams in the SSC. A number of significant projects are described in Appendix 8. Our intention is not for the Review of the Centre to cut across other work, but to build on it where appropriate.
Integrated service delivery49 A central question for the Advisory Group was whether the State sector is as effective as it should be in providing services to the community. Two sets of issues emerged consistently through the review:
50 Both these issues have different implications. Neither applies uniformly to all Government serrvices as can be seen in the diagram above. Different approaches are needed to different services. In broad terms the most straightforward services are those in the top left corner of the diagram. These are provided according to a specification that will typically be determined nationally, with minimal need for inter-agency interaction. These sorts of services tend to be standardised and predictable, a desirable characteristic for many services delivered to businesses and citizens (e.g. tax, border control). They represent a significant proportion of Government services, and by international comparison are well supported by the current New Zealand public management system. 51 Moving out of the upper, left corner, services become less well suited to national specification, and more agencies need to be involved. Moving from left to right sees an increase in service discretion, and more need for frontline staff to make case-by-case judgments. Moving from top to bottom more agencies need to be involved and vertical accountabilities need to be tempered with a stronger whole of government perspective. 52 The bottom right hand corner poses some of the hardest challenges. Services here tend to be both cross-cutting and highly devolved. The boundaries between central Government and local Government, Maori and NGOs can become blurred. Staff need to be able to manage diverse relationships and make difficult trade-offs. Front line staff need to be able to access information quickly. Considerable potential for innovation exists, as there are many different, local ways of approaching problems. With these possibilities comes greater risk. 53 To achieve significant change it will be necessary to test new concepts and empower those dealing with citizens to move away from a one-size-fits-all model. These initiatives may cross Ministerial boundaries, and may also move outside traditional reporting structures. Some of these concepts will fail. Changes recommended in this report provide the flexibility to manage the reporting and interagency relationships, but the ability of Ministers to reflect these changes in their responses will be a critical element in the success or failure of initiatives. 54 The focus of the Advisory Group has been on these issues. There are no simple solutions, or single levers that can be pulled. Progress will be made through finding flexible and responsive ways of working that reflect the particular challenges of each situation. There are proposals in this package that will enhance service delivery in all quadrants (eg culture, values and ethos) but the new ways of working, outlined below, will have the biggest impact on services nearer the bottom and right of the diagram. These challenges are illustrated in the case studies in Appendix 6. New ways of working to improve integrated service delivery55 Circuit-Breaker teams: We propose the establishment of front-line based, inter-agency teams to find creative ways to solve problems that have proved intractable over time (e.g. the state of rural housing in Northland). These would not be simply more committees - they represent a different approach to problem solving. We already see some examples of this sort of approach, often at local initiative. The teams would also:
56 The teams would:
57 If the teams succeed, later teams could work on other matters (such as a development focus as opposed to a problem focus). However, we want these teams to focus initially on service delivery problems. 58 Mandated regional coordination mechanisms: Ensuring coordinated delivery is hard. Different agencies often have different levels of delegated authority, and different regional boundaries. Typically no agency is mandated to ensure coordination occurs, although in some regions coordination mechanisms have developed. We propose more work to understand the best of current practice, as a prelude to implementing mandated regional coordination mechanisms. This should include looking at the impact of factors such as the Privacy Act and different regional boundaries on coordination. 59 We expect a range of different co-ordination arrangements will emerge. They will need to facilitate more effective inter-agency collaboration and planning, and more effective interaction with local Government, NGOs and Maori, as well as being able to provide a regional perspective on how effectively government is meeting the needs of citizens. An important part of the brief for regional coordination will be to ensure a range of fora for the State sector to interact with Maori. 60 Many problems cannot be solved by a single actor, public, private or community. We have not had enough time for consultation on how to make relationships with local government, the voluntary and community sector, and the private sector and Maori stakeholders, work better, but note the work undertaken by, and subsequent to, the Community and Voluntary Sector Working Party. The review of regional coordination should pay attention to relationships with these groups. 61 Policy/operations connections: Good policy advice and implementation requires good two-way flow between staff and communities at the local level, and policymakers at the centre. The extent to which this currently occurs is variable. We need to improve the links between policy and delivery. Engaging Maori early in the process of policy development and programme design will minimise the risk of service failure. There are good models of development work at a regional level to build on. 62 We should begin with an assessment of how well current policy/operations relationships operate, to identify targeted change. While this may involve structural change, the Advisory Group does not recommend a comprehensive restructuring of the State sector to put all policy and operations into the same organisations.
Tackling fragmentation and improving alignment63 Fragmentation occurs partly because there are too many agencies, and partly because there is an inadequate unifying vision and purpose for these agencies, within which each can make its own contribution to the Government's objectives. The proposals to address fragmentation and improve alignment cover priority setting, structural change, networks, Crown entity governance, and accountability arrangements. Priority setting and accountability systems64 The State sector works best when it has a clear sense of where it is going, and what has to be done to achieve the desired results. Ministers have an important role in this, both individually and collectively. Senior public servants need to engage with Ministers on what will make the biggest difference - a point made by a number of commentators and chief executives that also came through strongly in the hui with senior Maori. 65 Better priority setting and planning is in part dependent on better information on what it is the Government wants to achieve. We propose a number of changes to the performance management and accountability system to focus attention on outcomes (what are the overall results we are trying to achieve, and how are we going to get there?), and to promote genuine engagement between Ministers and departments by focusing on the things that are really of interest to most Ministers. This should include better information on intermediate level outcome goals. These proposals include:
More effective evaluation66 We need better information about actual performance, in both outcome and service delivery terms. A number of initiatives should prompt greater emphasis on evaluation by government agencies, including:
67 We endorse these developments, and believe they need to be reinforced. There is merit in the idea of having a dedicated resource that can provide a broader focus to evaluation effort through:
68 The recently established Social Policy Evaluation and Research Committee (SPEaR) seems a significant step in this direction. The change implementation group should liaise with SPEaR and recommend further action if appropriate. 69 More weight is required than the impact of a new committee, however. Given the importance of evaluation, and the poor performance of the system in this regard, this is an area where we expect that central agencies should retain ongoing leadership, not necessarily in the sense of conducting major evaluations themselves, but in providing encouragement and oversight of evaluation. This should be reflected in the ways in which central agencies:
Vote structures:70 Vote structures can affect resource allocation and budget management, as well as policy and service co-ordination. The Public Finance Act requires a separate Vote for each funding relationship between a Minister and a department, to provide clear accountability to Parliament (e.g. one Minister has four separate Biosecurity Votes because four departments are involved). 71 We recommend that an enabling amendment to the Public Finance Act be made to remove the technical barrier to Ministers implementing a Vote structure that may significantly improve resource allocation, without compromising good financial management practice, or Parliament's ability to hold Ministers to account. This would not commit the Government to change the current Vote structure, but would enable Ministers to rationalise and order Votes in a way that is more consistent with the Government's outcome goals (e.g. one Biosecurity Vote rather than four). Treasury should report to Ministers on initial candidates for these arrangements among current votes. Networks72 One way to facilitate the development and implementation of joint strategy and collaboration across multiple agencies is for groups of those agencies - both departments and Crown entities - to establish and work within networks. These are cooperative arrangements between separate agencies. Such networks can operate at both the centre and in the regions; and support both policy development and the delivery of joined-up services. Some networks exist now in the State sector, but more effective use could be made of this type of working arrangement. 73 The Advisory Group recommends central agencies work with Ministers and other Chief Executives to identify where formal networks of agencies would add value. Such networks would be:
74 A chief executive of one of the agencies would lead the network. This network leader would be first among equals with a clear mandate to:
75 Network leaders would not have the right to direct the member organisations on their internal management, and would not be accountable for the performance of individual organisations in the network. 76 Networks would need to be fit for purpose and would vary according to circumstance. The Advisory Group recommends central agencies and the change implementation group work with chief executives and Ministers to identify sectors or outcomes that should be organised as networks and report back to Ministers. 77 If networks enable better coordination of agencies and provide a platform for collaboration, they will produce some benefit even if they operate only at the officials level. To the extent that collaborative behaviour between officials is modelled on and lead by collaborative behaviour between Ministers, the potential for networks to generate gains will be greatly enhanced. Comprehensive coverage networks78 The PSA believes we should go further than this and create "hard-wired" networks across the State sector. These would be:
79 In addition to the powers of "soft" network leaders, "hard" network leaders would have the right to direct the chief executives of component organisations on internal management issues, and might also have the power to co-sign the statements of intent of member organisations to ensure alignment with the plans of the sector and the Government as a whole. This sort of arrangement would be well on the way towards merger of agencies into a super-ministry. Changes to the State Sector Act would be required. Structural change80 Structural change is not a panacea for the problems facing the State sector today, and it can be a blunt and expensive instrument. Having said that, we believe some structural consolidation will be beneficial, leading to fewer agencies overall - bigger, more "federal" departments comprising sub-units with compatible objectives. We recommend that the Ministers of State Services and Finance lead a targeted review of the opportunities for structural consolidation, looking in particular at:
81 This review should use a clear set of criteria, developed by the central agencies and agreed by Ministers, for determining what functions should be carried out by what type of agency (department, Crown entity, or something else), and when functions should be combined or shared within an agency, and when they should be separated. Crown entity governance82 Notwithstanding the preceding recommendations on structural change a number of Crown entities are likely to remain in Crown entity form. We recommend that Government moves to resolve the confused governance arrangements that continue to characterise the Crown entity sector, and that the Ministers of State Services and Finance develop detailed proposals on Crown entity governance, in light of the review of the centre, including proposals for legislative change.
People and culture83 People are the most important part of the public management system. Good people can often make poor systems work; the reverse is seldom true. Good people need to be imbued with a spirit of service to the community. The Standards Board has made a strong case for building the public service ethos. We endorse their recommendations. 84 State sector values and ethos will be promoted through the staff development programme discussed below and will need to be supported by the involvement of Ministers, the PSA, Crown entity boards and chief executives, along with the SSC. Leadership on values and ethos goes beyond chief executives, and we see enhanced senior management development as an important component of promoting ethics in the State sector. The State Sector Act will need to be amended to extend the Commissioner's mandate to the Crown Entity sector. Developing staff and leaders85 The State sector includes a hugely diverse range of employers. Different agencies have different human resource needs. Reflecting this diversity, individual organisations will continue to employ and develop their own staff and undertake their own human resource planning. Many aspects of human resource management, however, are common to all State sector organisations. There would be benefit in the progressive adoption of common standards, the sharing of good practice, and the development of joint systems or programmes. We propose, therefore, that individual agencies' human resource planning be done within the context of an overarching State sector human resources framework. This framework would cover the Public Service and an appropriate range of Crown entities (the actual coverage would need to be considered further during the development of the framework). 86 Decisions about organisational and people capability in the State sector can potentially be made at one of several levels: within individual organisations; within networks or sectors or other groups of organisations; or at something closer to whole-of-State-sector level. The process of developing the framework would involve discussion, and recommendations to the Government, about the appropriate level at which decisions should be made on a wide range of matters affecting organisational capability and human resources, including:
87 A common framework on some of these matters would contribute to improving the effectiveness of State agencies, and also to State servants' perception that they are part of a larger entity than just their own agency. 88 We recommend that the State Services Commissioner should be charged with leading the development of the framework with the involvement of a range of stakeholders, including the tripartite forum (Ministers, Public Service Association, and Public Service chief executives), and in keeping with the Partnership for Quality agreement. 89 Supporting the development of such a framework would require SSC to broaden the focus of its long run labour market data collection and analysis, and we propose that this focus be expanded to include Crown entities (but excluding SOEs and CRIs), without duplicating work already going on in other sectors (e.g. health and education). We note and encourage the Commission's recent work to improve the depth and detail of its HR analysis within the Public Service through such things as the Human Resource Capability unit record collection and the Career Progression Survey. 90 Matters already identified as requiring further work are the development of:
91 We recommend further promotion of the use of generic public sector standards and qualifications within State sector organisations (such as the unit standards being developed by the Public Sector Training Organisation); identification and promulgation of good practice in coaching and development of staff by managers, including investigating training options to improve the skills of managers; and work to identify and promulgate good practice in leadership skills training for staff at all levels. 92 We encourage the Central Agencies, particularly the SSC, to actively develop initiatives that build leadership capability and innovation. We recommend that SSC, working with Chief Executives, take a more active role in developing senior staff, including the identification and fostering of talent in the context of a sector wide senior management competency framework. 93 We propose that the group of the 300 (say) most senior staff (including chief executives) across the State sector be identified, and receive a greater investment in training and mentoring. They would have an explicit duty to actively model and develop a professional, public service culture. 94 We also encourage the State sector to form a partnership with a strategic provider of top-level training, probably one or several tertiary education institutions.
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Recommendation: We recommend that Ministers agree to undertake a project to assess the current state of innovation in the New Zealand State sector, to propose enhancements to the public management system, and to establish some indicators of innovation in the State sector that can be measured over time. |
101 The Advisory Group believes that central agencies need to take more leadership, particularly on "whole of government" matters. This leadership needs to be wider than just the Public Service. The Advisory Group notes there has been a number of moves in this direction by the central agencies, but thinks they need to go further. In doing this they will need Ministerial support. We see this greater leadership being developed in a number of practical ways:
Recommendation: We recommend that Ministers: Agree that the Central Agencies (State Services Commission, Treasury and Department of the Prime Minister and Cabinet), collectively and individually, should exert more effective leadership across the wider State sector by formally adopting as part of their core business a responsibility to lead the State sector on whole-of-government initiatives. This to include:
Agree that the mandate of the State Services Commissioner should be extended to enhance his ability to collect information from and provide leadership to State sector organisations beyond the Public Service. |
102 Some members of the Advisory Group consider the centre needs to be strengthened further by forming a Leadership Board. There are a number of options for this Leadership Board. It could have direct powers over chief executives and a direct accountability to Cabinet, inserting a new layer between Cabinet and chief executives. Alternatively a Leadership Board could have an advisory and support function, to enhance the leadership of the Central Agencies without diluting their responsibilities. The Leadership Board would in this instance be accountable through the Central Agency heads to the Prime Minister, Minister of State Services and Minister of Finance. Its functions could include the following:
103 The membership of the Leadership Board could be determined once the functions were clarified but would probably consist of the Central Agencies CEs, other public service CEs with delivery experience and possibly some state sector CEs.
104 There are risks associated with having a Leadership Board. It may add another level of bureaucracy without concomitant value, reduce flexibility, and exclude important interests. For these reasons, and because they did not believe there was evidence of the need for such a body, some members of the Advisory Group did not support the Leadership Board proposal.
What will you see, feel and hear which will be different?
105 We propose three groups of recommendations to give more power and support to the interface of the State sector with citizens, make it easier for Ministers to get the system to respond to their aspirations, and make the State sector a better place to work. Our intention is that in time these proposals will make a tangible difference for Ministers, citizens and state sector staff.
What will be different in 5 years time for ..... | |||
... Ministers |
... Citizens |
... Staff | |
Through better integrated service delivery (Circuit Breaker Teams, regional coordination and stronger policy/operations connections)... | |||
Will see more innovative solutions dealing with long-standing problems. |
Will find complex problems get sorted out better. Will feel well-served by public servants. |
Will see their views being listened to and put into action. Will find work more satisfying. | |
Will hear fewer complaints about coordination and duplication. |
Will notice that they are not having to handle so many government processes or organisations. |
Will see senior Wellington people at the frontline, will have more contact with people in other sectors. | |
Will find that things happen more quickly and smoothly at the frontline. |
Will feel that government in Wellington feels less distant. |
Will notice that their views get reflected in policy, will feel connected to Wellington. | |
Through less fragmentation (networks, structural change, accountability systems) .... | |||
Will deal with fewer agencies and noticeably fewer barriers. |
Will notice that duplication is less. |
Will be working with other agencies more. | |
May find their previously separate organisation is now part of a larger one. |
Will find relating to the public service simpler and more straightforward. |
May be working under different management or in a different organisation. | |
Will see less clutter, less paper, better information. Will have to resolve conflict amongst agencies less often. |
Will understand the overall vision and purpose better. | ||
Through building people and culture (values and ethos, leadership, training, senior management development, human resources strategy) .... | |||
Will hear public servants proud of their work and positive about their contribution. |
Will gradually feel that the public service is in good heart and will have greater confidence in public servants. |
Will receive more standardised training and education. | |
Will feel more confident that state sector staff working at the front-line understand and support Government's aspirations. |
Will talk more proudly about their jobs, and the value of the State sector. | ||
What happens next?
106 The proposals and new directions set out in this package add up to widespread and far-reaching change. That change, however, will happen incrementally and across the board, as the culture changes and, with it, expectations and behaviours. The risk with wide but incremental change is that momentum dissipates and no real shift occurs. This risk is greatest in those proposals where inter-agency action is required, and in the proposals for tackling front-line, service delivery issues.
107 An important part of managing this risk will be strong leadership from Ministers and central agencies. Indeed, the sort of transformation we anticipate will only happen if Ministers and officials work together to change the way they interact. Just as officials will need to take account of whole of government considerations so too will Ministers need to model and lead this stronger collective approach.
108 If Ministers agree with the directions set out in this report we suggest that the State Services Commissioner should assume overall responsibility for coordinating the departmental implementation effort, with appropriate reporting to Cabinet. Given the scale and scope of the changes involved, we believe the Commissioner should be supported in this role by a change implementation advisory board. Such a board would draw on the perspectives of a range of organisations in the State sector and beyond, including representation from the Public Service Association. We note that a similar arrangement is in place and working well to guide the e-Government strategy: the Commissioner is accountable for delivery of the strategy, but an advisory board including both State and private sector members provides guidance and expertise, and champions the strategy with stakeholders.
109 Accordingly, we recommend that the Commissioner establish a change implementation advisory board to advise and support him in overseeing the implementation of the package of proposals from the Review of the Centre. We suggest that the Commissioner be invited to report to Ministers early in the New Year on the composition, terms of reference, and work programme of this board.
Recommendation: We recommend that Ministers agree the State Services Commissioner should form a Change Implementation Advisory Board to assist with the implementation of the package of work arising from the Review of the Centre, to include a representative of the Public Service Association. |