2.2  An effective and efficient system?

Over the last fifteen years five key reviews of the New Zealand Public Management System have been undertaken, in addition to the work of a number of commentators who have analysed various aspects of the reforms[3]. The various reviews, and general commentary, have generally been positive about the core of the New Zealand model. The conclusions reached by both reviewers and commentators do not suggest that the clock should be turned back or that the core of the system should be significantly altered[4]. In coming to a common conclusion that the system is relatively sound both reviewers and commentators have tended to point to the following as positive aspects of the reforms: clearer accountabilities; greater transparency of Government activity; clarity of roles and responsibilities; devolution of resource management; better information about the activities of departments and the outputs they deliver; and the philosophical connectedness of the reforms[5].

In large part these strengths tend to focus on the efficient delivery of services over the 1990s. As a result, in identifying weaknesses within, or challenges for, the New Zealand model the commentators tend to point to the need for a greater focus on the effective delivery of services and maintaining and developing the capability of the public service.

2.2.1  A lack of focus on outcomes?

Provision for formal strategic management processes in the New Zealand model was not made until the mid 1990s, with the development of the Strategic Results Areas (SRA) process. Until that time outcomes tended to be identified through the strategic policy development processes – making the identification of outcomes dependant upon the quality of policy advice provided by officials and informal dissemination of information.

Many reviewers and commentators have suggested, however, that the provision of strategic policy analysis is insufficient in providing for an effective identification of outcomes sought by government. Instead, they tend to call for a strengthened strategic management system – one where outcomes can be specifically referenced and articulated by both Ministers and senior managers within the government. This recommendation seems to arise from a perspective that improved articulation of desired outcomes may provide for increased strategic engagement, alignment, planning and evaluation.

More recently the Managing for Outcomes process has provided for some strengthening of the current strategic management components of the New Zealand public management system. Initially heralded by the development of Statements of Intent – accountability documents designed to provide for the articulation of outcomes that an agency is seeking to achieve – the process now also emphasises a need for agencies to consider other aspects of the planning cycle, particularly evaluation of interventions, and the capability the agency will require if it is to effectively work towards the achievement of identified outcomes.

The risk with the current Managing for Outcomes process, however, is that with little or no reference to how the strategic management system sits within the wider public management system there seems to be a presumption that by purely focusing on improved strategic management the government will be better positioned to achieve articulated outcomes.

2.2.2  Poor focus on ownership / capability?

The architects of the New Zealand system provided for a split between two concepts associated with the delivery of services by the public service – the purchase and ownership interests [see Scott, Bushnell and Sallee (1990); and Scott, Ball and Dale (1997)]. The former concept recognises that Ministers (particularly Vote Ministers) would probably be most interested in purchasing services at least cost, and that in focusing on this it would be possible to drive efficiency gains through the system.

The ownership interest (to be overseen by Responsible Ministers) is a concept that reflects the need for chief executives and Ministers, as stewards of the public interest, to ensure that the ongoing capability of the public service to deliver services would be maintained and developed over time. The ability of chief executives to effectively manage and develop future capability requirements over the 1990s could be seen as limited, however, because of the constraining pressures exerted on baselines over the 1990s. A point that can be supported by increased calls for capability funding over recent budgets, and by a number of statements that suggest the capability of the public service has been reduced over the last ten to fifteen years, and a renewed focus on finding ways to address those areas where capability issues have been identified.

This environmental shift has become particularly apparent since the election of the Government in 1999. The current Minister of State Services has been clear that capability is an issue that needs to be addressed across the State sector in a variety of speeches [see Mallard (2000:1); (2001), (2002:1), (2000:2); and (2000:3);] and in setting the terms of reference for the Review of the Centre in 2001 (Advisory Group, 2001).

In order to effectively manage for outcomes it is important that resources – both financial and physical – be aligned in appropriate ways. The general perception of commentators is that the systems within the New Zealand model do not provide for this – in part through poor coordination of policy development, service delivery and use of resources; and in part through the operation of the financial management system.

The points made above should not be read as suggesting that the picture is completely bleak. There are a number of examples where outcomes have been built into policy development, resources are marshalled in pursuit of outcomes, performance is assessed against outcome measures, evaluation of policies is undertaken, chief executives have effectively managed their departments, and agencies have operated effectively with others to address cross-cutting issues. It is perceived that a managing for outcomes environment would, however, be characterised by such behaviours being seen as the norm rather than exceptions.

2.2.3  Conclusion

On balance, commentators suggest that whilst the core of the model is sound and no major reforms are required the New Zealand model needs to be strengthened so that “outcomes” and “ownership” considerations become an integral part of the wider system, supported by a culture that provides for an increased focus on the achievement of results. These perceptions have been reinforced by an expressed desire, on the part of key Ministers, for change towards a managing for outcomes focus in the New Zealand public management system.

In part, these demands may reflect a perception that having developed a sound efficient base for the New Zealand public management system, it is now time to focus on finding a way to address the “wicked problems” that face governments – i.e. those defined by Harmon and Meyer (1986) as: problems with multiple, conflicting definitions and no clear solutions, and whose necessarily imperfect solutions beget further problems (p. 391).

Accepting that the core of the system is basically sound does not mean, however, that we should not revisit the core principles upon which the New Zealand public management model sits. Nor does it mean that the ways in which these core principles have been implemented are those that will best support a shift in focus towards outcomes focused management.