8.2 Structures
The structures that support the New Zealand public sector model should be sufficiently flexible to promote improved coordination and alignment of activity across the public service. This could be supported through some revisiting of the machinery of government principles, and be provided for through: restructuring of Ministerial relationships, as referred to above; increased use of the “lead” agency concept; and continued innovation around ways to support “joined-up” government at the front-line.
8.3 Strategic management
This paper has suggested that the strategic management system needs to be focussed on outcomes, and identification of the links between outcomes and outputs, identification of the capability an agency requires; and providing for ongoing review of the activities that support the strategic direction of both agencies and the government.
The Managing for Outcomes process appears to provide a sound basis for the ongoing identification of these factors. It could also prove to be a sound core for other component parts of the wider system to be wrapped around.
More specifically, the Managing for Outcomes process could allow for regular strategic reviews of agencies or sectors (possibly every three to five years) with the aim of:
- specifying outcomes for the agency or sector for the coming three to five years;
- identifying capability and policy issues that need to be addressed in working towards those outcomes;
- considering possible financial management changes to support an outcomes framework within the agency or sector, and ongoing funding arrangements for the period;
- identifying appropriate performance indicators (to be used in holding the chief executive to account for service delivery and wider organisational or individual performance areas);
- identifying wider policy areas to be evaluated over the period leading into the next review; and
- identification of respective roles and responsibilities over the period leading into the next review.
Such a process should provide for close dialogue between departments, central agencies and Ministers. It should also provide for an identification of the ways in which ongoing risks will be managed over the period, and the role central agencies will play in relation to the department or sector. This could result in the identification of areas where central agencies will be obliged to undertake work for, or interact with, the agency or sector – thereby underlining the relational aspects that will have to support a managing for outcomes environment.
8.4 Financial management
In addition to considering how financial decisions can be made in ways that support managing for outcomes, it may be that the financial management system should be amended to provide for:
- proactive baseline reviews – to help move away from incrementalism and to allow for better assessment and management of capability and ownership issues;
- reallocation of resources in a more responsive manner; and
- wider appropriations to provide managers with greater flexibility, whilst also retaining sufficient transparency.
Where the strategic management system will primarily be focused on outcomes the financial management system needs to be based on outputs. This will occur not only because of the attribution issues associated with needing to report to Parliament on the ways in which resources have been used, but also because robust information about the cost of outputs is required to assist in reallocation and setting baselines that allow for both service delivery and ongoing development and maintenance of capability.
8.5 Performance management
Performance management in a managing for outcomes environment will require provision for both accountability and a learning environment within the one public management system. More specifically, it will be important to develop a culture that holds Ministers and chief executives responsible for the articulation of outcomes; and accountable for the identification of outputs most likely to achieve those outcomes, efficient delivery of those outputs, evaluation of whether anticipated results have been achieved, and amendment of activities if evaluation shows that results have not been achieved.
