Submission to the consultation on the State Sector Act legislation.

Introduction

My name is Jan Rivers. I am a librarian and information management specialist and I have an interest in the public good – meaning issues pertaining to good quality public services and good quality democracy. I live in Wellington. I attended the Institution of Public Administration of NZ (IPANZ) seminar at which Minister Hipkins launched this consultation and I see some difference between the big picture changes he proposed and the rather milkquetoast questions posed by the consultation documentation. I found this disappointing. I could not in good faith use those questions as a guide.

In a time of increasing challenges – climate change and environmental degradation and the rapid and dramatic changes that are required to prevent irreparable damage, the recovery from historically abnormal levels of inequality and deprivation, the crisis of legitimacy of democracy both in NZ and across the world a strong, well-provisioned and capable public sector is more important than ever.

I would like to see an Act developed that encodes what I heard from Minister Hipkins at the recent IPANZ lunchtime lecture made on the day the consultation was announced. I have elaborated in my submission below how different elements of the public sector & different principles about the public sector need to be incorporated in the reform in order to enable a high-quality public sector that can address these problems. Minister Hipkins said he was:

very interested in agencies and civil society working together across life events whether

that be birth, death, job change, new migrant services, illness or disability, retirement or

moving house.

The summary portrayal by the SSC of these changes as:

We want to hear your thoughts on how we can create a more flexible, agile
and adaptive public service, that reflects the people it serves.

This formulation is worrying in that is seems to encapsulate nothing more than a continuation of the outsourcing and privatisation that we have seen in past years. The invitation to contribute ideas continues saying:

We will know we have succeeded when New Zealanders tell us that

public services are more effective
and accessible, when Ministers are increasingly satisfied with the professional
support they receive from public servants,

I did not think that this is what I heard when the Minister spoke at IPANZ. It seemed to me he was speaking about greater capacity and capability with the objective to develop synergies across agencies to deliver on complex goals. He was concerned with the increasing complexity of the world and the pressing nature of today’s problems including climate change, poverty, environmental degradation and the growing international instability. He was concerned with developing services that are worthy of public trust and confidence, and the apparent inability with the current legislation to address some of the major problems in NZ across all sectors and interest groups. Minister Hipkins made three suggestions for how agencies could work together to deliver joined up services.

The public sector could he said:

make groups of chief executives jointly accountable for achieving complex government priorities including such current challenges as climate change, child poverty or social well-being.

Secondly he suggested creating the flexibility for people from different agencies to work on common issues. He called that a ‘joint venture’ proposal and would be suitable for delivering housing affordability, clean rivers or better outcomes on addressing family violence.

He proposed

a one-stop shop where government “has no wrong door” for people seeking
public services. In the regions this could involve a government office
analogous to a council civic centre where people can go to find out about
and receive public services.

He said “Canada does this well and the results in terms of citizen satisfaction are impressive.”
Finally he said that he wanted to

enshrine the purpose, principles and values of the public sector in the legislation and these are the capabilities that I would like to see the sector develop. Asking the wrong questions will get the wrong answers.

The remainder of this submission covers what I understand to be the capabilities and principles that would underlie a public sector that is able to work in this way. I do not anticipate how these changes would be legally implementable – only that the requirement is there for them to be considered for inclusion in an updated State Sector Act. Of note are some important synergies beyond government agencies that will make the legislation fit for purpose and effective to build a New Zealand that is fit for the future. I think that this review should be wide ranging, and various commentators have called for a Royal Commission into the role of the public sector. It would disastrous to have a once over lightly approach which changes very little.

Principles for the new legislation

The consultation documents seem to place the emphasis on the wrong issues. This is echoed by an article by economist Geoff Bertram who has spotted that the consultation documents have subverted the intent to improve the public sector for the modern world by focusing on the spirit of service in the original 1912 State Sector Act. He makes that point that questions like

“What if we could rearrange our Public Services like building blocks? Imagine how quickly and easily we could shift our people and resources to cope with changing times and needs.”

reveals the thinking that there is one kind of generic public servant type that can be moved flexibly to areas of need. This is to massively understate the subject and sectoral knowledge that public servants have – let alone how much more of these specialist skills are needed to form a truly capable and service focussed public sector. Most particularly Bertram takes issue with the principles statements such identifying the following issues are missing from the list. He says these include:

stewardship of the public estate,
responsiveness to citizens,
provision of information in a form that enables citizens to perform their vital function as citizens,
rigorous adherence to the principles of the Official Information Act,
providing services to citizens (revealingly, the “principles” instead talk of “purchasing and providing services for citizens” – the corporate-client model of 1988).

Problems with Actuarial modelling

I agree with Bertram’s assessment and would add another principle. The actuarial model which attempts to see citizens In respect of how much avoiding future lifetime costs of individuals and services might enable the government, and hence taxpayers, to save money is not a perspective that should have any place in public sector irrespective of the flavour of the government of the day. That an approach was adopted to drive vulnerable people, (including the single parents of people with three-year-old children) off benefits or to analyse the future “liability” of providing public housing indicates to me a public sector that has lost its ethical moorings. The Ministry of Social Development said it had

integrated our welfare and social housing

valuations to enable us to establish a lifetime cost of the

overall system, as well as for specific groups and cohorts.

Public servants should be servants of the people. Measuring the impact of public services by the savings that are achieved will embed the second rate permanently. Public good outcomes will rarely be measured by the minimisation of cost to the government.

Civil Society

The 1988 State Sector Act has seen the diminution of the relationship between government and civil society to be nothing more than a coercive and sometimes bullying relationship between contractor and contracted as research by Sandra Grey has shown. This has happened even while huge tranches pf public services formerly delivered from within the public sector by career public servants has been outsourced through contracts to the not for profit and private sector. The State Sector Act needs to contain provisions that mediate and develop this relationship. The contracting model has seen major players in the NGO sector lose contracts and hence massive levels of skills and capability which has damaged their ability to provide services. Relationships Aotearoa, Plunkett NZ, The Problem Gambling Foundation amongst others have lost long-standing government contracts. The way that this was done sometimes even led to a perception that public servants were alert to the disapproval of the NGOs by members of the government. Certainly, most contracted suppliers of services reported in anonymous surveys that they felt speaking out would risk contracts and survival were they to advocate against government policy. This has effectively prevented those NGOS most closely connected to the problems they are seeing from speaking about them and advocating the best solutions. I would like to see provisions that mediate this relationship be part of the new legislation and the ideas discussed by Dr Pat Webster about the many kinds of relationship between state and civil society historically (funder of services and including funding the seeking of sector advice and guidance, partner, as well as service delivery by contract) would be a good starting point.

Stewardship of knowledge and skills

Public servants skills are diverse and specialised and in recent years as article by the Victoria University Institute of Governance and Policy Studies (IGPS) head Simon Chapple has noted much interesting and challenging work has been outsourced to the private sector indicating that, in reality, they need to be even more diverse. Buying in skills at great cost is a poor solution to having skills in-house. Knowledge management & skills capability is an important feature of a capable public sector. One example of failure would be the skills that were built in the public sector related to carbon emissions measurement in the years between 2005 and 2008. A public sector focussed on the public good and free and frank advice should never have been allowed to let these specific skills wither on the vine for more than a decade so that now when we are considering climate change legislation and a Climate Change Commission they are being rebuilt from scratch. In a second example of missing capability a competent public sector should never have identified fossil fuel subsidies to consumers, as MFAT did recently, to be the most important element of fossil fuel subsidies. They are in fact less than 5% of the total of the total carbon emissions when subsidies to fossil fuel extractors and commercial use are considered.

Treaty of Waitangi

Minister Hipkins outlined how enshrining the Treaty of Waitangi in the new State Sector Act would outline how agencies should work with Māori. I strongly support this and not only for Māori. I firmly believe that what good for Māori is likely also to be good for all New Zealand. In a globalised world fully including our local indigenous population on terms agreeable to them is an important measure of the public good. I would advocate strongly that doing this without also implementing the government’s response to the WAI 262 treaty claim would be to underscope the required changes very seriously. Failing to include in the legislation an approach that mandates rules for the government care of Taonga, clarifying how Māori. records will be managed and handled in government and addressing the outstanding issues related to indigenous rights related to flora and fauna would be to play lip service to the intent of the enshrining of the Treaty in the State Sector Act. Eight years since the report is too long to wait for a considered government response.

Strategic rather than rules based and operational

In the same article by Simon Chapple mentioned above he also made the humorous point that public servants used to be the Mandarins and are now the valets. I have seen this lack of capability in my recent public sector career and my observations of the public sector from the outside. Often the prevailing culture sees accountability (not pro-activity or responsibility) as the primary measure of competence. In a large and complex bureaucracy some element of this is inevitable but often the systems for getting things put right appear to be broken. The risk averse (to the public servant) operation of rules laid down by others (a kind of unimaginative ‘accountability’) places New Zealand at great risk. I have heard some people say ‘my role is to serve the Minister and to do what they ask. If the instructions are not from the Minister it doesn’t happen. There is no capacity to do more.’ Behaving as if government ministers somehow magically have all the answers is surely a recipe for poor public sector performance.

People employed for their specialist expertise need to be fully capable and to have their skills and expertise reflected up through the ranks in the advice they give. The growth of the ideas of systems thinking in some parts of the public sector are a hopeful sign but the fact is that these ideas were introduced initially more than 30 years ago and have been lost to a linear conception of “service delivery” based on pre-existing rules. Such a conception of the public sector is to embed poor performance.

Futures Thinking.

An effective public sector needs to be able to implement proper anticipatory governance as outlined in the recent book by Professor Jonathan Boston. Future problems may be anticipated like the aging population, slow to arise like the proliferation of plastics throughout the environment or (apparently) sudden state of change problems such as the decision by China not to recycle imported second-hand plastics. Building in this capability through legislation is of great importance. There is no point in serving the public to address yesterday’s and today’s problems. A proper future focus could be achieved through a specific part of the public sector dedicated to future’s thinking.

Free and frank advice

The loss of free and frank advice describes something that is very serious. The quality of most of the Briefings to incoming Ministers following the 2017 election revealed to me, and this is strong language but purposefully so. My disappointment with the quality of these documents was profound. Rather than professional expertise reflecting societal wants and needs many of the documents were thin craven reflections of the desired direction of the wishes of the government of the day. They demonstrated group think and a distinct lack of courage from senior public servants across most sectors. Various people have said that senior public servants just need to ‘get some guts’.

Facts and evidence are of paramount importance in good policy. There are many related issues as to why these take second place to the ideology of the government-of-the-day, but I think the approach that believes that professional and expert technical advice at senior levels in the public sector leads only to professional capture is one that needs to be addressed.

The limitations of generic managers

The belief in general management being good enough has passed. An excellent public sector needs excellent skillsets and it should not be beyond the capability of good legislation to design checks and balances that would rein in the kind of soft corruption of professional nest feathering that the appointment of disinterested generic time bound chief executive appointments was seen to achieve in the 1988 revision of the Act. The time has passed when generic, even if competent, managers should be moved into large and complex departments when they have no expertise about the agency they are to run. In addition, employing people directly from the private sector to run major government departments should be anathema. Such people’s spirit of service has been developed to service the narrow interests of shareholders and not the public sector and their thinking is often limited and linear (profit and loss) when societal problems are systemic and complex.

Former senior public servant Len Cook has made the case for the retention of much more expertise at high levels in the public sector even advocating for professional leads for some areas that do not currently have them including the social services sphere and infrastructure and I would endorse this idea. This especially wasteful when as he has pointed out only few (1 in 7) departmental chief executives are appointed from the second tier.

Democratic legitimacy

The willingness of the public sector to follow government themes for which there has never been a tested electoral mandate is very worrying. I will choose the example of big data and algorithmic analysis to make these points. There has to my knowledge never been an inclusion in a political party manifesto advocating these techniques. They have been introduced by stealth and there is now an attempt to retrofit legitimacy in the form of ‘social licence’ on what are often discriminatory and anti-democratic processes.

Trustworthiness: The example of big data and algorithmic targeting

The generic point about this must be that ideas that represent ideology and which are not demonstrably in the public interest and which do not have a supporting research and evidence base have become deeply embedded in public sector thinking. The link between the political manifesto and / or the increase in the public good to the public sector action adopted needs to be drawn carefully for government to regain the trust of the public. The adoption of algorithmic analysis to determine service targeting has neither been included in party manifestos nor proven by research.

However, it would appear that NZ has,to a greater extent than any other OECD country, permitted the public sector has adopted the use of big data and data analytics as part of the last government’s targeting and cost saving strategy. How can a public sector build trust in the population when it is proving itself to be untrustworthy on this matter? I would go as far as to say that the biggest advocates of algorithmic analysis seem to be in the public sector. Meanwhile in academia and in the civil society there is, by and large, a great deal of scepticism and ambivalence about these methods. Current Government Ministers allow that trust needs to be built before these methods can be used. However at the time of writing this submission government is recruiting for at 18 least data and insights roles to build teams across government that are already extensive. This represents a particularly dangerous enthusiasm for a public sector seeking trust. Where are the voices of caution in the public sector about the increasing use of algorithmic decision tools when there are well-signalled research papers based on the discriminatory results that these techniques can embed?

Research capability

A capable public sector needs a research base and in the past government was a major source of primary and public good research. The wholesale decimation, closure, amalgamation of public sector libraries has created a public sector with limited research capability and created a generation of policy advisors whose research tool is Google. The cuts to monitoring and evaluation capability is also a risk and a weakness. These services and research and evaluation capability needs to be mandated perhaps by being included in the fitness process that is part of the investment assessment process carried out annually by the NZ Treasury.

Government and the public good.

Max Rashbrooke’s recently published Government for the Public Good outlines 10 things that governments deliver that other actors in society cannot. First and second and in relation to consultation he says:

1) listen (roughly) to all of the voices
2)use deliberation to flush out better ideas.

The quality of government consultation is poor and excludes, in general terms many in the population. The kinds of consultation tools anticipated by the international public-engagement professionals body IAP2 as are barely used leading to high levels of cynicism and disengagement and low levels of trust. Techniques could include the use of modern opinion sampling, citizen juries and parliaments, participatory budgeting and the use of online artificial intelligence tools such as the use of Pol.IS which has been effectively trialled in NZ by Scoop Media.

Large-scale public-sector capability

I would like to see a public sector that is empowered to deliver on Max’s other points. These are that it:

can harness the power of altruism at scale i.e. use the independence and impartiality of public servants to achieve public good outcomes.

harness expertise to design policies i.e. by providing expertise at scale

benefit from the motivational power of the public sector ethos,

can coordinate with exceptional power and scope,

use impartial authority to save time and hassle,

use free (at the point of delivery) services to reduce hassle and transaction costs,

benefit from economies of scale and other financial advantages

can make complex long-term investments.

Government as entrepreneur and risk taker

Rashbrooke’s list speaks of the capabilities which only the public sector has. I am disappointed that the consolation appears to be oriented and prioritised around the area of greater efficiency and a technocratic role of flexibility to deliver on efficient services. The true value of the public sector in people’s lives must not be derogated and this much larger role must be developed. Many of Rashbrooke’s point link to the work by UK economist Mariana Mazzucato whose work recognises the vital role that competent governments support economic development by their ability to research and innovate and take risks that are larger and longer in duration than the for-profit sector are willing or even able to make.

Readiness for constitutional change

I think that the legislation drafted as a result of this consultation needs to come from the perspective of being a component of a future constitution. Its development should be aligned both with the Public Finance Act and the Crown Agencies Act as Minister Hipkins outlined at the 2018 IPANZ event at Parliament.

Treaty issues

The WAI 262 claim mentioned above and the proper incorporation of Tangata Whenua interest in the legislation would be another element of this constitutional focus.

An end to marketing

In Canada government has one house style irrespective of the agency delivering the service. This must save millions of dollars in communications and marketing costs each year. In contrast the NZ public sector spends multiple millions of dollars on marketing and branding of not only agencies but within major departments tens and even hundreds of branded subsites and services. When public services are delivered through a miasma of “marketing speak” I find my level of trust, rather than rising, I find myself distrusting what I am hearing.

Local government

I would also like to see the proposed changes to the local government act dovetailed with the SSA legislation. The current role of local government is unclear, local government suffers from frequent challenges when it attempts to use its own legislation and the quality of delivery across diverse geographical areas means that services are often of poor quality. The water quality issues that have plagued Kaipara Councils’ water supply and brought it into statutory management and caused 1000s of cases of ill-health and even deaths in Hastings should not be happening in an OECD country. In the case of Kaipara the findings of the review demonstrated that the council simply did not have the capability with most of its important work outsourced to contractors. Re-introducing the well-beings is a partial response but the relationship between central and local government and funding options particularly for the smaller council with a big tourism overhead must be put on a firmer footing.

Official Information Act.

The frequent complaints about the politicisation of the OIA relate, in my view, to the lack of a centre of expertise and monitoring in government. I believe that an effective Act could cater for the creation of such a centre of excellence providing carrot, stick and oversight.

All the foregoing capabilities would in my view be incorporated into new institutional arrangements guided by legislation and associated regulation.

Thank you again for the opportunity to contribute.

Jan Rivers

Wellington

12-10-2018

References

Geoff Bertram A public business not a public service- https://www.stuff.co.nz/national/politics/opinion/106997582/a-public-business-not-a-public-service

Ministry of Social Development 2016-17 Annual Report –

https://www.msd.govt.nz/documents/about-msd-and-our-work/publications-resources/corporate/annual-report/2017/annual-report-2017.pdf

Fears Constraints and Contracts by Sandra Grey and others

https://www.victoria.ac.nz/sacs/pdf-files/Fears-constraints-and-contracts-Grey-and-Sedgwick-2014.pdf

Simon Chapple: Govt commissions experts because departments are run down