Are state sector governance changes a tweak or a redesign?

The very name of it, the State Sector and Public Finance Reform Bill, sets off the snooze button. 

But this bill, introduced last week into the House, is a key part of the government’s better public services (with less resource) agenda.

It is an omnibus bill which would amend the State Sector, Public Finance and Crown Entities Acts to, in the words of State Services Minister Jonathan Coleman, “create a range of public sector management tools to foster an innovative, efficient public sector to deliver better identified results for New Zealanders”.

The changes stem from recommendations of the better public services advisory group, whose final report was released in March this year.

The package is aimed at:

• Supporting and encouraging government agencies to work more closely together and share functions and services.
• Giving more financial and reporting flexibility to support agencies working together.
• Creating stronger leadership at system, sector and departmental level. 

Leadership is a main feature of amendments to the State Sector Act 1988 which would see the state services commissioner’s role as leader of the state services greatly strengthened.

The commissioner would have a broader function of reviewing and advising on system wide performance, rather than the present more narrow individual agency performance, with the aim of ensuring the state services work as a system. 

The commissioner would also have enhanced powers in relation to the employment and deployment of chief executives.

Responsibilities of chief executives would be extended to make their “stewardship” (longer-term departmental focus) role more explicit and include an obligation to consider the collective interests of government.

A new arrangement for service delivery would come in the form of departmental agencies (based on the UK "executive agency" model).

A departmental agency legally sits within a host department with – unlike other units within departments – having its own chief executive, who is directly responsible to a minister for the agency’s activities.

And perhaps giving legislative status to this government’s early practice of placing troubleshooters within government departments to assess cost-cutting opportunities? 

“Core ministerial staff”, recruited on events-based employment agreements to support ministers, would not be subject to chief executive obligations to notify vacancies or have a review procedure.

An amendment would also make clear, following the contrary Supreme Court 2010 ruling in Couch v Attorney-General, that the purpose of section 86 is to protect public service chief executives and employees from personal liability when they act in good faith in the performance of their functions and powers.

Amendments to the Public Finance Act 1989 are directed at concerns that a lack of financial flexibility acts as a barrier to greater cross-agency collaboration and innovation, and that prescriptive reporting requirements can make information less transparent.

Proposed changes to Crown entities – which provide most of the public services New Zealanders use and, unlike departments, are not directly controlled by the Crown – could be seen as eroding self-governing autonomy in favour of compliance with the government’s overall strategy for the provision of state services.