Keeping public sector costs down
The NZ Herald reports sound words from the Treasury Secretary:
In a speech to government department chief executives in Wellington yesterday, Treasury Secretary Mr Whitehead said the public service needed to move out of its traditional comfort zone and take some risks to ensure it delivered services as cost-effectively as possible.
“There is a stark alternative to mobilising ourselves as public servants. If we don’t rise to the challenge and make real progress, change will occur – but it will be done to us rather than by us.”
Absolutely. To be fair some CEs have risen to teh challenge.
The Government’s edict was for better services without spending increases – and Mr Whitehead said nothing should be off the table to try to lift the productivity of the state sector.
Options included contracting out more services to the private sector, merging administrative services with other departments to lower costs and cutting projects despite the possibility of staff cuts.
I am interested in the merging of admin services.
If you add quangos to core departments, we now have 250 or so public sector CEOs. It also means we have 250 IT systems, 250 payroll systems, 250 HR systems etc etc.
I would advocate creating around a dozen sector super-ministries. One for the justice sector, one for the social services sector, one for health sector etc. You might still have different agencies within that super ministry, but they would all use the same IT, HR, payroll systems etc. And there would be just one CEO over them all who is in charge of strategy and ensuring the whole sector works together.
You see this in the UK where the Home Office is in charge of all law & order – corrections, police, courts etc etc.
In the speech, Mr Whitehead says “tough decisions” are needed. Staff numbers working in the core bureaucracy had grown by 44 per cent since 1999 – a far greater number than those affected by recent redundancies.
Mr Whitehead told the government departments more savings would be sought through the “line-by-line” reviews of spending that have become a regular part of the Budget process.
So trying to reduce costs won’t be a one off exercise, but an annual event. Excellent.