A huge increase in female top public servants

November 27th, 2015 at 9:00 am by David Farrar

The SSC announced:

The number of women in senior leadership roles in the State sector has grown from 16% to 44.2% since 2008, and 38% of current or acting Chief Executives in the Public Service are women – the highest proportion ever

And all without quotas.

the total spend on employing Public Service chief executives has remained similar since 2008/2009 according to two State sector workforce reports released by the State Services Commissioner Iain Rennie today.


Kiwis more satisfied with public services

March 9th, 2015 at 1:00 pm by David Farrar

Some interesting changes in the public satisfaction with public services, comparing 2014 with 2007. Considering the lid on staff numbers, and the limited extra funding, the SSC survey on public satisfaction is proof you can do more with less.

  • ECE provider quality up from 73% in 2007 to 81% in 2014
  • Public school quality via ERA up from 68% to 73%
  • Outpatient service quality up from 69% to 73%
  • Police non emergency responses up from 62% to 66%
  • Emergency services up from 73% to 79%
  • ACC services up from 65% to 70%
  • Housing NZ up from 68% to 73%


A cap for public service payouts

January 4th, 2015 at 7:00 am by David Farrar

The Telegraph reports:

Controversial six figure “golden goodbyes” for public sector workers will be banned if the Conservatives win the general election in four months’ time.

The commitment, which will be in the party’s General Election manifesto in May, will cap pay-offs at £95,000 each in the National Health Service, the civil service, council staff and even the BBC.

The move comes in the wake of rows after large taxpayer-funded payments to officials in the NHS and Civil Service, as well as the BBC, have emerged.

Unveiling the plans, Priti Patel, a Treasury Minister, said that a future Tory Government wanted to “bring some fairness back to the system”.

She said: “It’s not right that hard working taxpayers, many on low salaries, have to fund huge pay-outs when well-paid people get made redundant.

“So we’re going to do something that’s long overdue and that will bring some fairness back to the system – we’re going to introduce a new public sector redundancy pay cap.”

That’s an excellent idea. National should do the same in New Zealand.

More state sector salary data

December 12th, 2014 at 2:00 pm by David Farrar

Below is a list of all the state sector CEO salaries, based on the data released by the State Services Commission. These are approximate total remuneration annual costs, based on the following calculations:

  • Assume salary is at the low end of the $10,000 band
  • If they have worked for less than a year multiply salary by 365/days in job
  • If the salary for the period was less than $100,000 use the salary for the previous year


46 state sector CEOs get paid more than the Prime Minister who is on $428,500.

I’ve broken the salaries into four sectors – core agencies, crown entities, tertiary institutes and DHBs. The data for each sector is:


So the average CEO salary is highest in the core public service, then within DHBs followed by the tertiary sector and then crown entities.

Core Public service

The top three CEO salaries are Treasury $650,000, MFAT $640,000 and MBIE $620,000.

The lowest three CEO salaries are Women’s Affairs $240,000, Pacific Island Affairs $270,000 and the Parliamentary Commissioner for the Environment $280,000.

Crown Entities

The top three CEO salaries are NZ Super Fund $800,000, NZ Transport Agency $620,000 and ACC 600,000.

The lowest three CEO salaries are Drug Free Sport $140,000, Social Workers Registration Board $150,000 and Walking Access Commission $160,000.


The top three CEO salaries are Auckland DHB $570,000, Canterbury DHB $560,000 and Counties Manukau DHB $550,000.

The lowest three CEO salaries are Wairarapa DHB $250,000, South Canterbury $290,000 and Tairawhiti DHB $310,000.

Tertiary Institutes

The top three CEO salaries are Auckland University $660,000, Massey University $540,000 and Otagoo University $540,000.

The lowest three CEO salaries are Universal College of Learning $160,000, Aoraki Polytechnic $210,000 and Te Wananga o Raukawa $230,000.

Also have added up the totals for all positions in the public sector, by $50,000 band. They are:

  • $100,000 – $150,000: 9,490
  • $150,000 – $200,000: 2,236
  • $200,000 – $250,000: 683
  • $250,000 – $300,000: 271
  • $300,000 – $350,000: 113
  • $350,000 – $400,000: 52
  • $400,000 – $450,000: 29
  • $450,000 – $500,000: 12
  • $500,000 – $550,000: 14
  • $550,000 – $600,000: 10
  • $600,000+: 16

Comparing public sector salaries to MP salaries:

  • 55 people in the public sector get paid more than the Prime Minister on $428,500
  • 207 people in the public sector get paid more than the Deputy Prime Minister on $303,900
  • 367 people in the public sector get paid more than a Cabinet Minister on $268,500
  • 3,430 people in the public sector get paid more than an MP on $147,800




Labour says it is undemocratic to have public sector redundancies!

January 14th, 2014 at 10:00 am by David Farrar

Olivia Wannan at Stuff reports:

Older public servants have borne the brunt of recent government job cuts.

In the past two years, 412 government workers aged over 55 have been laid off, 42 per cent of the 970 redundancies in 10 agencies, figures released under the Official Information Act show.

Opponents say the loss is undermining the country’s democratic process.


The Public Service Association’s Brenda Pilott believed the Government initiative to condense levels of management was one factor behind the age skew.

“In that case, it is inevitable you’re going to be losing people who are in the older age group, as they’ve moved up into those middle and senior roles.”

So the Government is reducing the number of managers, and this is anti-democratic according to Labour?

It is a good reminder that Labour have opposed pretty much every state sector spending reduction in the last five years, and under them we’d not be heading into surplus, but ever growing deficits.

Labour state services spokesperson Maryan Street said the figures showed the public sector had lost many of its most experienced employees.

“The Government is, I think, deliberately stripping out the institutional knowledge and experience of the public service.

“This leaves a workforce that is not going to challenge anything ministers do and that is one of the things the public service is there for . . . It’s not good for our democratic apparatus.”

So Labour think it is the job of the public sector to challenge Ministers, not assist them?

What is depressing is once again Labour conflates quantity and quality. They think more of something is automatically good.

About 2.5 per cent of all public servants at the nine government agencies were made redundant over the past two years.

2.5%? And Labour is calling it the end of democracy. Sigh.

Satisfaction with state services continues to grow

November 6th, 2013 at 4:00 pm by David Farrar

The SSC released:

New Zealanders tell us that, in the last 12 months, satisfaction with public services has improved again.  The overall service quality score for June 2013 is 73, a point higher than June 2012.  Satisfaction has steadily increased over the last six years from 68 in 2007.

So satisfaction has increased over the last six years, despite the cries from Labour and the unions that spending restraint in the state sector would lead to a massive detoriation in quality of services.

Some specific improvements:

  • Using an 0800 number for health information improved 8 points from 67 in 2007 to 75 in 2013.
  • Staying in a public hospital improved 6 points from 68 in 2007 to 74 in 2013.
  • Outpatient/Accident and Emergency services from a public hospital improved 5 points from 69 in 2007 to 74 in 2013.
  • Tertiary education improved 4 points from 70 in 2007 to 74 in 2013.
  • Emergency services improved 8 points from 73 in 2007 to 81 in 2013.
  • The Police (for a non‐emergency situation) improved 4 points from 62 in 2007 to 66 in 2013.

What is also interesting is comparing the NZ scores to the Canadian survey this research is based on. The areas where NZers are more satisfied include:

  • Accident Compensation +19
  • Arrival process at airports +12
  • Living in state house +6
  • Childcare subsidy +5
  • Police non emergency +3

But also interesting is the areas where NZ scores services much lower than in Canada:

  • Local council building permits -26
  • RMA issues -20
  • Local council road maintenance -18
  • Local council rates info -15
  • Local council rubbish -13

There’s a clear message there!

Psychometric testing best for recruitment not restructuring

September 10th, 2013 at 9:00 am by David Farrar

Stuff reports:

Government agencies spent more than $1.5 million on personality and ability testing in the past year – and some departments may be using the results to swing the axe on employees.

Employment lawyers and psychologists say the increasing use of psychometric testing as part of restructures and redundancies in the public service could be illegal.

I think psychometric testing can be very useful when recruiting candidates, and have seen it used often very usefully.

However I am very skeptical that it is a good idea to use it for decision making on redundancies among existing staff. Employers should know enough about their current staff that they can make decisions around restructuring without psychometric testing.

Public Service Association national secretary Brenda Pilott said it was calling on the State Services Commissioner to halt the use of testing for restructures.

“When you’re restructuring, you are dealing with people who are your staff. They will have had performance reviews – there should be very little you find out about that person from a psychometric test you don’t already know.”

But a State Services Commission spokeswoman disagreed, saying: “Such testing, in order to obtain a full picture of a candidate, is a legitimate tool alongside others, such as interviews and reference checking, to come to a considered decision on employing the best people.”

I’m with the PSA on this one. The SSC argument applies well for recruitment but restructuring is different.

UK civil service reforms

July 12th, 2013 at 10:00 am by David Farrar

The BBC reports:

Some civil servants are “lazy” and need to be moved from their jobs, Britain’s top civil servant has said.

Cabinet Secretary Sir Jeremy Heywood was defending a scheme in which the bottom 10% of staff are targeted for improvement or moved out.

He also backed allowing ministers to “hand-pick” staff in their private office and limit permanent secretaries to five-year terms.

The last two things are already the case in NZ.

Sir Jeremy said suggestions top civil servants were opposed to a major revamp of the way the civil service operates, launched last year, were “wide of the mark”.

Under the scheme, the top 25% performers in each government department are rewarded – some with cash bonuses – and the bottom 10% identified for action to improve their performance or be moved out. 

No figures were available for the numbers who left their posts, but Sir Jeremy said there had been a willingness to implement the scheme, as “nothing annoys good civil servants more than seeing lazy civil servants going year after year without addressing that performance problem”.

Bonuses for the top performers, and assistance or moving on for the worst – sounds good to me.

Update on the 10 better public service targets

July 8th, 2013 at 3:38 pm by David Farrar

The Govt has released an update on progress towards their 2017 goals for better public services.  As far as I can tell from the various releases, this is the state of play:

  1. Reduce the number of people continuously receiving these working-age benefits, which will become the new JS, for more than 12 months by 30%, from 78,000 in April 2012 to 55,000 by 2017: Result: A drop of 3.6% to 75,366
  2. In 2016, 98% of children starting school will have participated in quality early childhood education: Result: 95.7%, up 0.7%
  3. Increase infant immunisation rates so that 95%of eight-month-olds are fully immunised by December 2014 and this is maintained through to 30 June 2017: Result is 89%. Also Reduce the incidence of rheumatic fever by two-thirds to 1.4 cases per 100,000 people by June 2017: Result is 3.9, down from 4.2.
  4. By 2017, we aim to halt the 10-year rise in children experiencing physical abuse and reduce current numbers by 5 per cent. Result is a 3.5% drop
  5. 85% of 18-year-olds will have achieved NCEA Level 2 or an equivalent qualification in 2017: Result is 77.2%, up from 74.3% in 2011
  6. 55% of 25 to 34-year-olds will have a qualification at level 4 or above by 2017: Result is 52.6%, up from 51.8% in 2011
  7. By June 2017, reduce the crime rate by 15%, reduce the violent crime rate by 20%, reduce the youth crime rate by 5%: Results: Total crime down 11%, youth crime down 18%.
  8. Reduce the re-offending rate by 25% by 2017: Result is re-offending down 9%
  9. Business costs from dealing with government will reduce by 25  per cent by 2017, through a year-on-year reduction in effort required to work with agencies: Result is not yet quantified
  10. An average of 70 per cent of New Zealanders’ most common transactions with government will be completed in a digital environment by 2017: Results include 35% of passports renewed online, 18% of GST returns done online, 93% of tax returns done online, 68% of MSD benefits applied for online

Good to see all the indicators are moving in the right direction. Some are well on the way to meeting or exceeding the 2017 targets. Others are moving more slowly. The Government has announced $20 million more funding to help agencies meet the targets.

The 2013 Trans-Tasman Departments Report

June 4th, 2013 at 6:35 am by David Farrar

Trans-Tasman have published their 2013 report on Government Departments. A panel of 18 people (note I am one of them) rate the various agencies on different criteria, plus there is lengthy commentary on the challenges, budgets and work plans for each agency.

The five agencies who scored top overall marks were:

  1. Reserve Bank 5.07 (on a 1 to 7 scale)
  2. Inland Revenue 5.00
  3. Stats NZ 4.88
  4. Dept of Corrections 4.87
  5. Dept of Conservation 4.81

The overall pick as agency of the year was the Department of Corrections. It’s gone from always being in the news for the wrong reasons, to making significant progress on reducing re-offending rates,

There was a new category this year on the ability to implement the Minister’s policy agenda. The top five there are:

  1. Reserve Bank (English)
  2. Treasury (English)
  3. Ministry of Business, Innovation & Employment (Joyce)
  4. Ministry of Health (Ryall)
  5. NZ Police (Tolley)

The top five ranked CEOs were:

  1. Dept of Conservation (Al Morrison)
  2. Dept of Corrections (Ray Smith)
  3. Reserve Bank (Graeme Wheeler)
  4. Stats NZ (Geoff Bascand)
  5. Ministry of Business, Innovation, Employment (David Smol)

The overall pick for CEO of the Year was David Smol for overseeing the merger of several ministries into the new super-ministry with few problems.

The Dom Post has an article on the report also.

Which Ministers appointed themselves to CEO recruitment panels?

May 28th, 2013 at 2:00 pm by David Farrar

Readers will recall the fuss over John Key making a phone call to Ian Fletcher informing him of the GCSB vacancy. Labour would have had you believe this was an unprecedented ministerial involvement.

As has happened in all the recent appointments that Labour has criticised, all were recommended by a panel of neutral civil servants.

This got me thinking. Has there even been an interview panel that didn’t include just neutral civil servants but a Minister?

It’s one thing to have the Minister sign off on an appointment, but do you want Ministers actually sitting on CEO interview panels? Wouldn’t that be far worse than merely making a phone call.

So I asked the State Services Commission if any Ministers in the last 14 years have sat on interview panels for state sector chief executives. They replied that this has happened on four occasions – in 2000, 2004, 2007 and 2008.

What is disturbing about these ministerial membership of appointment panels is all the roles were ones of pivotal importance to our democratic institutions. They were:

  • 2000 – Margaret Wilson on interview panel for the Solicitor-General
  • 2004 – Trevor Mallard on interview panel for the State Services Commissioner
  • 2007 – Michael Cullen on interview panel for the Clerk of the House of Representatives
  • 2008 – David Parker on interview panel for the State Services Commissioner

So this puts it all into perspective – a phone call, vs actually sitting on the interview panel – which means you are effectively hand picking your preferred candidate.

Ministers should be consulted on recommendations and for some roles they make the final appointment. But i think it is generally undesirable for Ministers to sit on interview panels for state sector chief executives. It is rather hypocritical to complain about bad process in appointments, when they did far far worse themselves.

The OIA response is here – Scan-to-Me from 11-util2 ssc govt nz 2013-05-15 124921

14% fewer Comms staff

May 13th, 2013 at 9:00 am by David Farrar

Audrey Young reports:

The number of public relations and communications staff in most government departments has dropped in the past four years – with some notable exceptions, including the Treasury – according to a Cabinet paper on public service staffing.

Overall, communications positions (full-time equivalents) have fallen by 14.34 per cent from December 2008 to last December, with some exceptions.

The number of Treasury communications positions increased from 2.9 to 4.9. The number of Statistics New Zealand staff increased heavily last year but that was in the build-up to the Census this year.

The Serious Fraud Office took on one position where it had none before, and the Department of Prime Minister and the Cabinet increased from one to two.

The Ministry of Women’s Affairs has had the biggest reduction in communications positions, from 5.2 to 0.9, a drop of 82.69 per cent.


* Women’s affairs 5.2 to 0.9
* Transport 9.4 to 3.5
* State Services Comm 5.7 to 3
* Environment 9.3 to 5
* Health 11.7 to 6.3
* Land Information 9.9 to 6
* Education 19.4 to 12.6
* Conservation 16.4 to 11


* Treasury 2.9 to 4.9
* Prime Minister and Cabinet 1 to 2
* Culture and Heritage 2.5 to 4

Overall a good trend. Government agencies of course have to have communications staff, but the growth in the 2000s was unsustainable.

Mallard says too many Ministers

April 22nd, 2013 at 4:00 pm by David Farrar

Max Rashbrooke blogs:

New Zealand has too many Cabinet ministers and too many government agencies – but more departmental mergers is not the solution, Labour MP Trevor Mallard said at a joint lecture for the Institute for Governance and Policy Studies and the Institute of Public Administration New Zealand.

Mallard, a former Minister of Education and State Services Minister, said New Zealand’s government was too fragmented, with “Crown entities for Africa” and agencies like Work and Income New Zealand that were “a body with no brain”.

Too many ministerial positions had also been created to tie caucus into Cabinet, he said, and most of the “talent” in a Cabinet was in the top half. Under Helen Clark, the Cabinet committee of the 10 most senior ministers “worked extremely well … Those ministers were much more likely to have read – which is a good start – and understand – which is even better – the papers they were being asked to consider.”

The “ideal” Cabinet, Mallard said, would have 10 members and 5-6 positions outside Cabinet “with training wheels attached”. However, he admitted this was not a popular view among those ranked 8-20 in his own party.

I agree with Trevor Mallard in terms of size of Cabinet and the Executive. I’d have 12 Cabinet Ministers and say eight outside Cabinet. The 12 Ministers would each be in charge of a cluster of portfolios.

Ideally you would amalgamate as many entities as possible so there was one agency per cluster, with a top class Chief Executive.

I blogged in 2011, a possible structure for a future state sector. So a Cabinet would be:

  1. Prime Minister (DPMC, SSC)
  2. Minister of Finance (Treasury)
  3. Minister of Economic Development (MAF, MOBIE, Fisheries, MORST, Transport)
  4. Minister of Social Policy (Pacific Island Affairs, MSD, CYF, Youth Development, Community Sector, Senior Citizens, Families, Women’s Affairs, TPK_
  5. Minister of Health (Health)
  6. Minister of Education (Education, ERO, TEC)
  7. Minister of Internal Security (Crown Law, Corrections, SIS, Justice, SFO, Police)
  8. Minister for the Environment (Environment, EPA, Conservation, Biosecurity)
  9. Minister of  External Relations & Security (GCSB, Defence, MFAT,  NZDF)
  10. Minister of Incomes (IRD, WINZ)
  11. Minister of Culture (Culture & Heritage, Broadcasting, Nat Lib, Archives, NZ on Air)
  12. Minister of Administrative Affairs (DIA, LINZ, Building & Housing, Customs, Stats)

Also the Speaker would be the responsible Minister for a Department of Parliament which includes the Parliamentary Service, Ministerial Services, Office of the Clerk and Parliament Counsel Office.

Should public service ceos be able to be sacked at will?

March 10th, 2013 at 10:00 am by David Farrar

Vernon Small writes:

Perhaps we should thank former Ministry of Education head Lesley Longstone for only stinging taxpayers $425,000 as a severance package.

Yes it is a lot of money, especially to onlookers on the minimum wage, the average wage or even anyone outside the top echelons of pay packets.

Given the circumstances of her departure – just over a year into a five-year term and as a result of a clash of personalities with her minister – she could have asked for more. …

So given that, and the public revulsion at such pay-outs, it is time to look again at how those contracts are written.

Setting aside for now the fact it would have been cheaper all round (and arguably fairer) to have shifted Parata, rather than Longstone, it’s time to dispense with the fiction that state sector chief executives are not on grace and favour contracts – essentially at the behest of their minister.

The Longstone example makes it as clear as day that a CEO cannot stay on if they fall out badly with their minister. But the fiction forces the SSC to dance on the head of a pin over the reason why they go, and the payouts that follow are eye-watering to most people.

It is true that if a Minister loses confidence in a CEO, then one of them has to go. And in a democracy it is the civil servant, not the Minister.

There are strong arguments that can be advanced about the quality of chief executives that might be recruited, and state sector purists will choke into their lattes at any move away from the notional independent public servant.

But there are precedents. Press secretaries and political advisers in politicians’ offices are on the public payroll but are on so-called “events-based contracts”. The “events” are essentially the continuation of the MP or minister in that office but they also include a clear parting of the ways between a minister and a press secretary. Payouts are modest. …

Acknowledging – and embracing – the reality that senior public servants are to all intents and purposes there at the will of their minister is an argument that has some resonance among some MPs too, but from a different perspective.

As they see it, politicians are elected and they should expect their decisions to be implemented. Something akin to an “events-based” chief executive could eliminate deliberate attempts to frustrate the will of their minister or the Cabinet.

I can see the attraction of an events based contract for CEOs, but there is a reason I think they would do more harm than good.

They would make it too easy for a Minister to dispense with a CEO. You only want the CEO to go if absolutely necessary. And as part of that, you actually want the departure of a CEO to cause political pain for a Government – which a payout causes.

If you had a clause that just allows a CEO to be sacked with three months notice, then I think you’d see a far higher turnover of CEOs – and I don’t think that is necessarily a good thing.

I don’t like paying $425,000 out for premature termination of a contract. But education is a $10 billion budget. If we have to pay out 0.05% of the budget to get a Ministerial-CEO relationship that works, then it is worth it. Of course some will argue the wrong person went – but Ministers are accountable through elections, and National will be judged in 2014 on how it has done overall.

So what is the happy compromise that would cut back on payouts by establishing events-based contracts; acknowledge the “political” nature of some public service roles – and the need to have someone driving hard to implement government policy; but maintain a flow of contestable advice?

One option would be to insist on a competence-based (not purely political) selection process where the nominee is examined by a select committee, much as the United States does with its Senate confirmation hearings.

That would allow the government to win the day, but in the process unearth incompetence and expose any skeletons to the public eye.

I’m not sure select committee hearings would un-earth any incompetence.

If we were to have select committee hearings for government CEOs then we should go the whole hog of the US model where the Government of the day appoints the entire senior management of the government departments. Of course that has some drawbacks also!


November 30th, 2012 at 4:00 pm by David Farrar

NZ First MP Andrew Williams did a release stating:

New Zealand First is accusing the Government of making changes to legislation to give the Prime Minister John Key complete dictatorship over the State Services commissioner.

Associate Finance spokesperson Andrew Williams says clause 6 (j) in the State Sector and Public Finance Reform Bill states that the commissioner must ‘exercise such other functions with respect to administration and management of the Public Service as the Prime Minister from time to time directs’. 

“This clause gives the Prime Minister complete power to dictate to the State Services Commissioner what he wants to see happen.

“It establishes a very dangerous precedent in a Westminster democracy, and is not unlike regimes of the Cold War era.

“With this Bill effectively providing for the unbridled whims of Dictator Key the National Government will continue to run the State Services sector into the ground,” says Mr Williams.

Note the hysterical language about dictatorships and the like. Even if Williams was correct in his assertion, the hysterical language is ridiculous.

The proposed new section 6(j) is:

For the purpose of carrying out the Commissioner’s role, the principal functions of the Commissioner are to … exercise such other functions with respect to the administration and management of the Public Service as the Prime Minister from time to time directs (not being functions conferred by this Act or any other Act on a chief executive other than the Commissioner).

Now let us look at the current State Sector Act 1988. It also has a section 6(j) which states:

The principal functions of the Commissioner are … to exercise such other functions with respect to the administration and management of the Public Service as the Prime Minister from time to time directs (not being functions conferred by this Act or any other Act on a chief executive other than the Commissioner).

That is a massive fail. Williams failed to even check the current law. And if you are going to accuse the Prime Minister of becoming a dictator, well an even bigger fail.

There’s really no excuse for such sloppiness.  Based on Williams press release, and the fact this clause has existed since 1988, I can only conclude that New Zealand has been a cold war dictatorship for the last 24 years, and we never noticed.

Public Services Satisfaction

November 27th, 2012 at 7:00 am by David Farrar

The left have complained bitterly about the reduction in staff numbers in the public service, and have claimed fewer staff mean inferior services. Putting aside the lack of fiscal reality of their stance, the latest SSC survey of public satisfaction with services shows that you can keep costs under control, and improve performance. Some extracts:

  • Overall satisfaction up from 68 in 2007 to 74 in Sep 2012
  • Passports & Citizenship 79 (+2)
  • Border Services 78 (+7)
  • Environment & recreation 76 (+4)
  • Health 73 (+4)
  • Social Assistance and Housing 73 (+5 from 2009)
  • Local Govt 73 (+4)
  • Education and Training 71 (+3)
  • Taxation & Business 70 (+8)
  • Justice & Security 68 (+5)

And some individual indicators:

  • Public Hospital Outpatient Services 73 (+5)
  • Stayed in public hospital 75 (+4)
  • Family Services/Counselling 73 (+8)
  • The Police 69 (+5)
  • Emergency 111 Services 82 (+5)
  • Getting a benefit 64 (+5)
  • NZ Super 84 (+9)
  • Tax Inquiries 66 (+7)
  • Company reg/returns 77 (+6)

Overall some pretty good improvements.

State property costs

November 23rd, 2012 at 10:00 am by David Farrar

Jonathan Coleman announced:

State Services Minister Dr Jonathan Coleman says a new Public Service property strategy is likely to reduce the office space foot print in Wellington by the equivalent of three Reserve Bank buildings.

Dr Coleman says Cabinet has approved the start of a centralised negotiation for future public service office space in the capital with accommodation leases due to expire for five large government agencies.

The leases due to expire include the Ministries of Social Development, Health, Education and Business Innovation and Employment, and the Crown Law Office.

The Property Management Centre of Expertise based within the Ministry of Social Development has been delegated to lead the negotiation for the accommodation needs. …

A business case presented to Cabinet indicated a reduction of the office footprint in Wellington of 30 per cent will save $338 million over 20 years, which is a 20 per cent reduction in cost compared with the status quo baseline.

Sounds good to me. If that achieve that, there are benefits beyond the direct savings. The ever increasing size of the public sector in the 2000s saw office rental costs in Wellington CBD skyrocket. This imposed significant costs on private businesses. Having reduced demand from the public sector should see smaller increases in rental prices for commercial tenants.

Fewer staff, better service

August 29th, 2012 at 10:00 am by David Farrar

The Dom Post reports:

Several years of belt tightening does not appear to have affected satisfaction with the public service. The State Services Commission has measured satisfaction with 42 frequently used public services and found it had improved since the last survey three years ago.

The survey results recorded the overall service quality score for public services rising from 69 points in 2009 to 72 this year.

State Services Minister Jonathan Coleman said the only service to show a big drop in satisfaction was in applying for or receiving a student loan or student allowance.

Ha, wonder what the score is for having to pay back the loan 🙂

But seriously, good to see an increase in public satisfaction.

Official back in cabinet committees

July 25th, 2012 at 9:00 am by David Farrar

Just noticed this in a speech by John Key:

As Prime Minister, the most difficult, hard-to-tackle issues of public policy inevitably end up passing across my desk.

In working through those issues, I rely heavily on the advice and judgement of public servants.

It’s crucial that ministers know all the sides of a particular issue, have all the relevant information and fully understand the implications of different courses of action.

Since becoming Prime Minister in late 2008, I’ve been impressed by the professionalism and competence of public servants in my own departments and across the public sector as a whole.

The approach of my Government has been to respect people’s professional skills and to back public servants who want to get on and make New Zealand a better place.

As just one small example, we have reintroduced the practice of having officials regularly attend Cabinet committee meetings.

That’s for two reasons.

We want to get advice from the people who have the greatest knowledge of particular issues.

And we actually think it’s good for officials to see where ministers agree and disagree, what they feel comfortable with and what drives their consideration of a particular issue.

If I recall Labour kicked officials out a few years ago, as they didn’t want to have “political” discussions with them in the room. I think it is a good thing the Government trusts officials enough that Ministers can disagree in front of them.

Something for the PSA to really worry about

May 17th, 2012 at 2:00 pm by David Farrar

The Daily Telegraph reports:

Under-performing civil servants will be identified and fired under plans to rank all government officials in order of ability, The Daily Telegraph can disclose.

Now that would be a fun league table to compile!

Sweeping plans to overhaul the civil service are expected to be published within the next month. They are bound to infuriate public sector unions who yesterday staged another day of industrial action.

According to the Cabinet Office, there are currently 434,000 civil servants, the lowest number since the Second World War, as a result of an efficiency drive by the Coalition.

At the time of the last general election, in May 2010, the civil service numbered more than 500,000.

NZ had around 39,000 public servants and it is now around 36,000. A fairly modest 7% reduction compared to the 12% or so in the UK.

However interesting to note the UK has one civil servant per 143 people, and NZ is one per 119 people.



Guest Post: Frontline vs back-office

March 26th, 2012 at 1:00 pm by David Farrar

A guest post from a commenter who has worked in the public service:

Frontline vs. back-office

The slogan “more frontline, less back-office” is, on the face of it, hard to argue with. Who wouldn’t want more services for the same (or less) money? Unfortunately, reality is a little bit more complicated than that, and the recent move by the government to sharpen service delivery through cutting “back-office functions” is short-sighted and likely to fail.

The term “frontline” comes from the military. We have a term: “tooth-to-tail ratio”. This means the number of “trigger pullers” versus the number of support personnel. In a military sense, there is a sweet spot – where the tail far outnumbers the teeth. For every frontline rifleman or tanker, you’re likely to have at least ten (and likely a lot more) support personnel. Every fighter pilot has thirty to fifty personnel supporting him. Incredibly inefficient? Not at all. History is full of examples where forces with a heavy tail-to-tooth ratio were incredibly successful: Germany 1939-1941, or the US Army 1944-1945 for example. And history also has some classic examples where the tooth got too big, and there was not enough tail – Germany 1944-1945, for example. In simple terms, there is a sweet spot of “frontline” and “rear area” staff. You can’t get more effective by changing the ratio; if you want to upsize or downsize, you still keep the ratio the same. You rescale from the corner.

So, if the government wants to use a military term, it needs to realise it’s using it incorrectly. And it needs to realise that ratios are what matters; if it wants to spend less, shave a little off everywhere. Because the concept of “frontline” is an amorphous one. We’d all agree the cop on I-car responding to calls for service is frontline, right? But what about the cops in the organised crime squads, who undertake proactive investigations (those without a public call for service)? What about the scene of crime officers (civilians) who attend the scenes? What about the fingerprint examiners back in the labs? What about the intelligence analysts who produce the “hotspot” maps showing where burglaries are skyrocketing, or disorder problems are emerging? What about the workforce co-ordinators who set the shifts for their squads? What about the analysts at Police HQ working out which boots are best, or when Tasers should be used, or the best way of keeping weapons safe? Which of those are “frontline”, and which of those are “back office”?

That’s half the story. In human resources and finance, I have no qualms with calling them back office, but is cutting them efficient? The public sector reforms of the 1980s, instigated by Roger Douglas and co, had a beautiful theoretical simplicity at their core: managerial responsibility and contracting. Here’s the thing. The more you take away from managers in terms of human resources and financial control, the less responsible they are and the less accountable they can be held. Shared services would be anathema to Douglas and co in those heady days (as someone who would never vote Act, I at least respect the intellectual strength of those early positions). The micromanagement of the current National government would also be anathema to them, who believed in contracting for a service from a department and letting the department decide how to do it. Indeed, the micromanagement of the current government has also been replicated within individual government departments, which are becoming increasingly dictatorial and driven from the centre. Rather than flexible government departments that evolve and adapt to specific conditions, we are seeing the re-emergence of 19th century style “mega bureaucracy”, with policies and procedures set by diktat at the top, with Chief Executives managing down a dozen levels on hiring decisions. Is this what we want?

I can only speak from my own expertise. The cuts in the NZDF, the flawed “refocusing of the back-office”, have hindered the military capability of that force across the entire spectrum. As Napoleon said, in war morale is to the physical as three is to one; and believe me when I say that morale in that force is absolutely shot to death. In the Police, all the current government seems to focus on is “more front-line cops.” I can only speak as someone with substantial research experience in the field: more front-line cops has little or no effect on crime rates. Full stop, end of story. More complex, more sophisticated reforms (whether community oriented policing, problem oriented policing, or intelligence-led policing) may have some effect, but they do not rely on stripping the back office to put more cops out there responding to calls for service, which is a discredited, 1960s model of policing. If back office functions are cut, we will have fewer people thinking about policing (or any government service) and more people doing. Again, it sounds good on the surface, but there is no point in a lot of activity if it has little or no effect on your goals. I don’t have specific knowledge, but I would guess adding more social workers and more doctors is also pointless unless there is careful direction as well.

I will leave with a quote from Major General Robert H. Scales, U.S. Army, (retd). Talking about the British army during the 19th and early 20th century, he said:

“The reckoning came at the battles of Mons and Le Cateau in 1914, when this army disappeared under the guns of a force that had spent the last half-century studying war rather than practicing it. The cultural bias toward action rather than reflection so permeated the British Army in World War I that the deaths of more than a million failed to erase it. Some scholars contend that this tragic obsession still left its dulling mark until well after World War II.”

Our current government’s own bias towards action rather than reflection will also have negative results.

As with most guest posts the views within are not necessarily my own.

Key’s speech

March 15th, 2012 at 12:59 pm by David Farrar

Some extracts from John Key’s speech to the Auckland Chamber of Commerce:

The first change I’m announcing is that there will be a new results-driven focus for the public service.

So I have identified 10 challenging results that I want to see achieved over the next three to five years.

Achieving these results will be difficult and demanding. In fact for some of them it will be extremely difficult.

This is very welcome, but very risky. Voters will hold the Government to account if these are not achieved, and it is inevitable some of them probably won’t be as the Government doesn’t control all the variables. But it will focus all of Government on meeting these outcomes, rather than just focusing on outputs. The 10 outcomes sought are:

  1. a reduction in long-term welfare dependency, in particular a significant drop in the number of people who have been on a benefit for more than 12 months
  2. more young children, and particularly Maori and Pacific children, in early childhood education
  3. immunisation rates for infants to increase, and a substantial reduction in rheumatic fever cases among children
  4. a reduction in the number of assaults on children
  5. an increase in the proportion of 18-year-olds with NCEA level 2 or an equivalent qualification
  6. a more skilled workforce, with an increase in the number of people coming through with advanced trade qualifications, diplomas and degrees
  7. a reduction in the crime rate, not just total crime, but also violent crime and youth crime
  8. a reduction in the rate of re-offending
  9. a one-stop online shop for all government advice and support that businesses need
  10. see transactions with government completed easily in a digital environment

I am pleased to see the crime focus is not just on total crime, which is a fairly meaningless figure which counts a minor cannabis offence the same as a murder. Also pleased to see the focus on improving the government’s online presence.

I have appointed Ministers to lead each of these 10 results, along with a public service chief executive who is accountable for demonstrating real progress against his or her result.

Excellent, you need the accountability of a Minister to drive things.

Underneath each of the results will be a measurable and stretching target, like a certain percentage increase or decrease within a particular time.

We have already decided one of these concrete targets.

For example, the Minister of Education has told me that for result number five she has set a target of 85 per cent of 18-year-olds having NCEA level 2 or equivalent in five years.

The current figure is around 68 per cent, so achieving the target will be very tough.

But I don’t want easy targets. I want targets that are going to stretch the ability of the public sector to deliver them, and that are going to force change.

Because if they are easy targets they aren’t worth doing.

This is in fact the most significant part of the speech, rather than the ministry merger which most of the media seemed focused on.

This term, there will be no more than 36,475 full-time equivalent positions in core government administration.

We are under that number now and we will stay under it.

 The cap will count most people working in government departments and in some Crown entities, but doesn’t include frontline staff like teachers, police officers, hospital staff or prison officers.

When we came into Government in 2008, we immediately imposed a cap of just under 39,000 FTE positions in core government administration.

That cap was successful in turning around what had been a huge increase in public service numbers.

The definition of core government administration wasn’t around at the time, but we know that from 2002 to 2008 the number of people employed in government departments increased by around 12,000 FTEs. That’s an overall increase of 38 per cent in just six years.

Our cap changed that. The number of FTE positions in core government administration stopped growing, and then dropped by about 2,400 over three years.

So the cap of 36,475 is still massively higher than the 29,000 it was just a decade ago.

Our intention is to create a new Ministry of Business, Innovation and Employment on 1 July this year.

This new department would integrate the functions of:

  • The Ministry of Economic Development.
  • The Department of Labour.
  • The Ministry of Science and Innovation.
  • The Department of Building and Housing.

I have long advocated that we should carry on doing what Labour did in their last term (reversing what National did in the 90s) and have fewer government departments, and fewer Ministers incidentally. You both reduce backend costs, but also make collaboration easier.

And I do want to say that this is the only departmental merger we are currently planning.

 I’m not ruling them out in the future, but there is no plan for wholesale reorganisation.

A pity, but that will at least give some certainty to public servants who are having a tough time of it.

Will the Empire strike back?

March 7th, 2012 at 9:00 am by David Farrar

Andrea Vance at Stuff reports:

Bureaucrats are biting back, with plans under way to march against any further state sector cuts.

Beleaguered public servants are anxiously awaiting Prime Minister John Key’s plans for the state sector, expected to be announced in a keynote address next week.

If the reform involves further privatisation and job cuts – more than 2500 jobs have been slashed in the past three years – it is likely protest marches and rallies will follow.

Public Service Association national secretary Brenda Pilott said the “mood has changed” among public servants, who were now talking about action and taking to social media.

A march would have echoes of mass protests in 1988 against the State Sector Act, which reshaped the public service, she said. “Public servants are starting to bite back – finally – after three years of cuts.

“People have been a bit resigned but now patience is wearing out. The mood has changed. People are now talking about opposing further cuts.

It is a tough time for the PSA. They are one of the more rational unions, in my experience. And having a shrinking state sector is hard for those impacted.

But I think it is worth stressing the fiscal environment we are in. The deficit has been running at around $10b a year. That is several times larger than the cost of the entire civil service. There is a path back to surplus over the next three years, but it is a fragile one.

One just has to look at the UK, Ireland, Greece etc to see what will happen to the public sector if there is not an end to deficits and growing debt.

Of course the Government could scrap high cost programmes such as Working for Families, subsidized childcare or interest free student loans, to reduce the deficit. But I suspect the PSA and its members would not be too keen on that either.

Some of course will advocate that we try and tax our way back to surplus. Apart from the fact that increased taxes will lessen economic growth, I’d point out that overall tax revenues are basically on the track announced by Labour in its 2008 budget. The tax changes since then have over a four year period been broadly fiscally neutral. National actually cancelled two stages of its planned tax cuts due to the deficit, so it has been quite balanced – both canceling tax cuts and reducing spending.

Also we have to allow for efficiency gains from technology. If a new computer system for IRD means it needs 1,500 fewer jobs, then that is something that will be good to do – even it is tough on those affected.

Vance on state sector reforms

March 3rd, 2012 at 9:03 am by David Farrar

A very interesting article from Andrea Vance at Stuff:

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. …

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.

Moving the state sector from being focused on outcomes outputs to outputs outcomes is a heroic endeavour, but worthwhile. As Andrea says, outputs are easily measured and easy to achieve. If one moves towards outcomes, then one has to accept there will be some failures. You can near guarantee outputs, but outcomes are far more complex.

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.

I tend to favour super-ministries, but sharing of back office functions and a joint board to over-see co-operation is a step in the right direction.

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.

The model I favour is a 12 member Cabinet with 12 full Ministers (for 12 super-ministries) and 12 Associate Ministers outside Cabinet who will be delegated responsibilities for particular agencies within a super-ministry.

The first deep cut

February 24th, 2012 at 2:03 pm by David Farrar

In my column at the NZ Herald I label the MFAT restructuring the first deep cut.