British ministers, special advisers – and the think-tanks that buzz around Westminster – are in the midst of one of their regular bouts of public service envy. Or so it seems from the quantity of research into why other countries’ public services are so much fitter, flatter and leaner than our own.
Canada, Sweden, Finland and New Zealand – to name but a few – apparently did fiscal consolidation long before George Osborne knew the meaning of the term, and could definitely teach Eric Pickles a thing or two about getting more for less.
As for civil service accountability (a politically pressing issue in the wake of the UK’s West Coast Main Line shambles), ministers clearly think there is a lot to learn from other nations about ensuring public officials carry the can.
Cabinet Office Minister Francis Maude has recently been venting his frustration at the way mandarins have ‘blocked’ government policy or ‘advised other officials not to implement ministerial decisions’. He is currently leading the charge to get a grip on ‘unacceptable’ conduct in Whitehall.
Maude has commissioned the Institute for Public Policy Research to compare how Australia, New Zealand, Singapore, France, Sweden and the US deal with their state bureaucracies. Ministerial appraisals for top officials – and the publication of their objectives online – are already being introduced under the Civil Service Reform Plan.
He recently told a prestigious Institute for Government audience he is especially interested in New Zealand’s model of civil service accountability, with its contractual relationship between ministers and their ‘chief executives’ (heads of departments), involving formal outcomes and five-year, fixed-term contracts.
In fact, British politicians and policy wonks have long been fascinated by New Zealand’s way of doing things. This is not just about cross-party admiration for its 1980s experiment in ‘Rogernomics’ – a mix of neo-liberal economics and cheeseparing fiscal theory, spearheaded by the country’s former Labour finance minister, Roger Douglas. Nor merely because New Zealand has long been in the vanguard of ‘new public management’ techniques, like contracting and outsourcing – or the historical links with a fellow Commonwealth country, run along Westminster lines.
The British political class seems genuinely convinced that in the land of The Lord of the Rings, The Hobbit and Sauvignon Blanc, the public service grass really is much greener; that Kiwis have discovered the secret elixir that has eluded UK governments: how to deliver public services more efficiently, at the same time as driving out costs.
So is this just fantasy politics, fuelled by a desperate search for big ideas at a time of eye-watering austerity back home? Or are there really valuable lessons to be learnt from one of the world’s most remote countries – with a population roughly three times the size of Kent, and a government small enough to fit into one building in Wellington – on how to do public service reform?
The Institute for Government is conducting research to discover by what strange alchemy New Zealand is so ahead of the curve. (An adjacent issue is why so many UK policy initiatives – from welfare reform to pensions legislation – seem to have antipodean origins.)
The Institute’s director, Peter Riddell, tells PF that it is important to dispel some myths. In the corridors of power, ‘people often invoke the name of New Zealand, without really knowing or understanding what happened there,’ he says. ‘Many of them don’t realise that the model has been adapted and changed. Things have moved on in the past 20 years.’
Indeed, the country has shifted away from the increasingly fragmented, decentralised delivery model initiated in the 1980s towards a more centralised focus on cross-cutting objectives. The Auckland region’s ‘super city’ initiative – merging eight councils into one service provider – is a recent example.
New Zealand’s deputy prime minister Bill English put things into a wider context during a London stopover with Maude last month. A member of the ruling centre-right National Party that won power from Labour in 2008, English emphasises the country’s relatively benign fiscal position. Core government spending fell to just 33.8% of GDP last year, and New Zealand is ‘on a 2%–3% growth path’, he says – enough to make British ministers gnash their teeth with envy.
Not that this has always been the case. In fact, much of the pressure for radical public sector reforms in the 1980s and 1990s came from New Zealand’s own fiscal crises, well before the latest global crash. This, says Riddell, has nearly always been the impetus for early adopters of such measures, such as Sweden and Canada. And there is plenty of evidence that kiwis paid a high price over 15 years for their radical therapy, in terms of unemployment, health and poverty indices.
At least some of New Zealand’s recent growth spurt has, of course, also been a by-product of the 2011 Christchurch earthquake disaster, which has prompted major reconstruction activity. The boost from ‘Middle-earth’ tourism has stimulated GDP too.
Notwithstanding the economic context, English claims the key is the way New Zealand is going about its public service reforms. Its ten cross-cutting ‘results’, or objectives – focusing on welfare, skills, employment, children and crime – are being used to break down public sector silos. ‘Outcomes are a hackneyed old tool, but they’re the only way to drive change,’ he says. ‘It’s all about getting more for less, not less for less.’
So far, so familiar. But how do they make it happen? This, believes Riddell (and Maude, it seems) is where the issue of civil service accountability comes in.
New Zealand has an independent state services commissioner who is responsible for appointing and assessing departmental heads. Under this contractual relationship, chief executives are much more publicly accountable for delivery than in the UK. Riddell thinks something like this may need to happen here.
However, public administration expert Colin Talbot, who is collaborating with the IPPR/Cabinet Office research, is sceptical about the fashion for importing public service models from afar, particularly when they risk getting lost in translation. ‘Often the ideas are quite ill-thought through, and based on sanitised accounts,’ he says. People like the contractual civil service model, ‘because it all seems quite simple, in a Hobbit-like, good and evil way. But in practice, New Zealand’s ministers turned out to be not very interested in managing contracts. Hence the need for a new quango.’
Britain’s ‘serial monogamy’ civil service convention – with permanent secretaries having to ‘fall in and out of love’ with each administration – is in need of updating, says Talbot. But the jury is out on whether a New Zealand-style accountability model is the answer.
Unsurprisingly, English disagrees. He defends his government’s ‘strong, collaborative approach’, in which each of the ten public service ‘result’ areas has a named chief executive who is held personally accountable. They are ‘left in no doubt about what’s wanted of them,’ he says. This, along with four-year budget plans, ‘is the only way to really drive change,’ English insists.
Former New Zealand finance minister Ruth Richardson – a key player in the early public service reforms and related accountancy changes – wrote recently that ‘no transformation programme can succeed without embracing civil service reform.’
This is all music to the British coalition’s ears. With its deregulatory, small-state philosophy (the core civil service has shrunk from 39,000 to below 36,000 staff since 2008), New Zealand’s attraction is at least partly down to its role as an outrider for all the things ministers would love to do here.
But the reality is a little more nuanced. As English emphasises, their agenda is not all about cuts. ‘When it comes to welfare, for example, we’re spending more money – not less. But I believe the payoffs are going to be large. Our focus is on maintaining and improving public services, not cutting them.’ The pace of change is slower too, with less drastic spending reductions than in the UK, he tells PF. Public satisfaction with services is rising, ‘because we’ve taken the longer-term view.’
Not everyone is convinced. New Zealand’s Public Service Association has compiled a catalogue of cuts – across tax offices, tenants’, conservation and Maori development services, and border security – that raise serious questions about the success of the strategy.
PSA national secretary Brenda Pilott says that the fixed-term, contractual civil service model has downsides: not least that it de-motivates departmental chief executives from improving cross-government working. The Labour opposition, for its part, calls the current round of public sector reforms ‘ideologically driven’.
If this sounds uncannily like public service debates here, it’s probably because – despite differences in scale and timeframe – the issues are pretty similar.
‘A large part of this whole debate about civil ser-vice accountability is to do with political frustration,’ say Riddell. ‘Remember “scars on our backs”?’ But it is important to ‘dispel the chimera’ that a contractual relationship between ministers and their civil servants is a cure-all, based on a ‘neat division between policy and implementation’, he says. A different contractual model probably wouldn’t have averted the debacle at the Department for Transport: that was more to do with the terms of the franchise, cuts to staffing levels, the skill set of civil servants, and lack of oversight and auditing – depending on your point of view.
Talbot agrees. It is unlikely that New Zealand-style accountability would have prevented the ‘schoolboy cock-ups’ at the Department for Transport, he says. On the other hand, West Coast-gate has certainly added grist to Maude’s reforming mill.
Back in the real world, beyond the arcane discussions in Elvish, there are some interesting ideas and bits of good practice to learn from. But no magic bullets – from New Zealand or anywhere else – can conjure up more from much, much less. With apologies to Tolkien, there’s no one public service ring to rule them all.
This article first appeared in the November issue of Public Finance