4.3 Coordination of resources
The Review of the Centre (2001) suggested that resources within the public management system are not utilised effectively, and that the fragmented nature of the state sector has created a situation where a lack of coordinated activities hampers the management of resources in way that supports managing for outcomes.
Specific issues identified as arising from the perceived fragmentation of services include: coordination problems because of the number of agencies and the overlapping areas of delegation and boundaries used by government agencies and local government; difficulties in interaction with government for citizens; financial resources being split into a number of small pools creating overlaps and gaps in funding; and inadequate systems to allow service delivery to inform policy development.
There is no optimal structure for a state sector when considering how cross-cutting issues can be addressed. In fact, coordination issues are as likely to occur within large conglomerate agencies as they are in a more fragmented system. The British Comptroller and Auditor-General (2001) suggests that coordination issues need to be addressed by:
bringing together of a number of public, private and voluntary sector bodies to work across organisational boundaries towards a common goal [through]:
- Realigning organisational boundaries – bringing together the whole or parts of two or more organisations to create a new organisation;
- Formal partnerships – working together by contract, protocol or framework agreement;
- Informal partnerships – working together by liaison, consultation or unwritten mutual agreement (p.1).
The United Kingdom has piloted a range of structural mechanisms for addressing cross-cutting issues. Reviews to date suggest that some progress has been made in the different pilot areas, but both Flinders (2002) and Clark (2002) sound some notes of caution:
The current reforms are not substituting old structures with new, but, on the contrary, are imposing new layers and mechanisms upon the existing framework. It is therefore possible to identify the evolution of a complex matrix within central government. A programme intended to increase efficiency and effectiveness may therefore deliver the unintended consequences of increased costs, more bureaucracy, reduced flexibility and pluralistic stagnation (Flinders, 2002, p. 67).
Current initiatives seem to be framed within a managerial preoccupation that relies on inter-agency structures while neglecting other, vital, aspects such as operating culture, central to the delivery of any joined-up policy. This means that while managerial objectives may be achieved, policy outcome goals may not (Clark, 2002, pp. 115 – 116).
These comments reinforce the point that all levers of control, systems and processes need to balance and support each other if a managing for outcomes environment is to be successfully achieved. In other words, whilst structural change could prove to be a useful response in some instances, it should only utilised if it appropriately supports other initiatives.
The diversification of votes, portfolios, departments and other agencies in the New Zealand model can also create impediments for the strategic coordination of policy and service delivery as it can:
- increase the number of people that need to be engaged in strategy setting;
- lead to the development of a culture where agencies compete against each other;
- create systemic barriers to the effective use of resources in seeking to achieve identified goals;
- make it more difficult for Ministers to engage in strategy development; and
- reduce the ability of Ministers to focus on ownership issues.
So, what does this mean for a managing for outcomes environment?
4.3.1 Votes and portfolios
The power structures of an organisation (or in this case the institution) need to support any proposed change process. It could be argued that the current structures tend to reinforce the fragmentation of the State by allowing for agencies to have multiple requirements placed upon them, and thereby reducing the avenues for providing a common direction. Streamlining of votes and portfolios could allow for an increased level of engagement and coordination between Ministers and agencies on sector outcomes, thereby supporting an increased focus on outcomes.
Discussions about streamlining of Ministerial relationships can be difficult, in part because Ministers tend to see direct control over relevant resources as providing them with the ability to effect change. Streamlining of votes and portfolios would not necessarily require a reduction of the number of Ministers within the New Zealand public management system, or the creation of a formal inner Cabinet (although the existence of Ministers outside Cabinet essentially provides the latter already).
Rather, senior Ministers could be allocated portfolios for major agencies or policy areas with less experienced Ministers allocated sensible groupings of portfolios within those sectors. The letters of delegation, from the Prime Minister, could then identify the role of the more senior Ministers as having responsibility for strategic development of policy and oversight of ownership issues (where appropriate), whilst the other Ministers would be more focussed on operational issues. The difference between this proposal and current structures would simply be some rationalisation of the number of associate Ministers and the ways in which they are spread across a range of sectors. Providing for senior Ministers to take a lead role in budget-setting processes could also strengthen these proposed structural relationships.
Obviously, decisions about the structure of Cabinet, the number of portfolios and Votes is a matter for the Government of the day. Some streamlining of these could, however, assist Ministers to better achieve the outcomes they seek.
4.3.2 Organisational structures
The current organisational structures within the New Zealand model should be revisited, over time, to determine whether they do indeed reinforce an environment that does not support the alignment or coordination of resources. Appropriate responses to situations where this is deemed to be the case should then be developed.
In some instances this might result in structural change. For example, moving some of the smaller departments, or Crown entities, into larger agencies may well assist in providing for higher quality policy advice and better coordination in some sectors. In other instances more informal mechanisms for supporting better coordination might be appropriate and should be taken into account. For example, the ability to provide for the development of a lead agency, service delivery coordination processes such as memorandums of understanding, or other less formal systems should be considered. In undertaking any machinery of government analysis the impact of any decision on the wider sector should also be taken into account.
4.3.3 Roles of central and lead agencies
An analogy that could assist in developing an understanding about the roles of central and lead agencies is that of a large corporate with a number of business units where the role of Cabinet would be one of a direction setting and governance body, overseeing the activities of the various departments (business units), with the assistance of the central agencies (the corporate office).
Within such a structure central agencies would have a clear mandate to provide advice and support for Ministers, by operationalising oversight of departments and agencies within the State sector through flexible and empowering management systems.
The role of lead agencies could be to oversee areas of strategy development across unified sectors (for example, the justice sector), encourage ongoing evaluation of policies and programmes, and contribute to oversight and performance assessment of agencies within that sector. This should provide for more coordination across sectors, whilst retaining some physical separation of agencies where it is considered appropriate for this to occur.
4.3.4 Structures for the future
Streamlining of Ministerial relationships and provision for more coordination between agencies at a “strategic” policy-setting level could result in less fragmentation. It could also lead to the establishment of stronger silos between different sectors if systems are not sufficiently robust to provide for dialogue on cross-cutting issues.
Figure 3 illustrates one way the structures of the New Zealand public management system could support a managing for outcomes environment. In this scenario senior Ministers and the lead agency would be responsible for setting strategy across the sector (in consultation with junior Ministers and the other agencies), whilst all relevant Ministers and agencies would be responsible for delivering interventions consistent with the sectoral strategy.
The efficacy of such a model would rest in its ability to promote collaborative behaviour within sectors or networks. Achievement of this would be dependant upon leaders within those sectors providing best practice examples of articulation of outcomes, equitable processes for the reallocation of resources and rewarding of evaluative activity.
