$1 billion to be cut from state sector

The government expects to save up to $1 billion in the state sector over the next four years, with the public service itself expected to play a key role in implementing change.

Finance Minister Bill English made the comment today when he announced a proposal to reduce the number of government agencies as the government sought better value for money, less duplication and improved co-ordination across the state sector.

The proposals include disestablishing five crown entities and three tribunals, merging two government agencies, establishing shared corporate services across the government's three central agencies and consolidating the services of a number of others.

Officials will now take due diligence on the proposed changes, Mr English said.

That involved gathering financial and other information from the affected organisations.

“We expect these changes to result in savings over the medium term, which will be offset by some initial upfront costs.”

He said there was no set goal for staff reductions or money saved.

Due diligence is to be finished by July, after which cabinet will make final decisions.

“New Zealand currently has 39 government departments, over 150 Crown entities of various types, not including school boards of trustees, and more than 200 other agencies,” Mr English said.

The costs of running government was too high, with too much duplication and waste, he said.

“Change is now a necessity.

“The public sector is increasingly taking the initiative when they see this kind of process being undertaken,” Mr English said.

“It is clear that [the pace of] change will pick up. That momentum will pick up.”

To help with the reforms the government has set up the Better Public Services Advisory Group.

It will help ensure any changes will improve the focus and results of the public sector as a whole, Mr English said.

“The group's members will help bring a clear focus on value for money, innovation, high quality service provision and effective change management.”

The eight members of the group are Department of Prime minister and Cabinet chief executive Maarten Wevers, Watercare Services chief executive Mark Ford, Air New Zealand general manager of people and technical operations Vanessa Stoddart, Wise Group chief executive Jacqui Graham, State Services commissioner Iain Rennie, acting Treasury secretary Gabriel Makhlouf, Ministry of Social Development chief executive Peter Hughes and Ministry of Justice deputy chief executive Sandi Beatie.