10.3 What would a 21st century public sector look like?
As we have noted above, the literature surveyed in this paper does not establish a definitive policy prescription for the organisation of the state sector. Rather, it provides an approach to thinking about state-sector organisation, and suggests directions (as opposed to definitive endpoints) in which policy on state-sector organisation is likely to move, if this approach was adopted as the basis for more detailed policy developed. Those policy directions might result in a 21st century public sector being structured around:
- Fewer public-sector organisations with specialised units in each organisation collecting information, but fewer points at which that information is coordinated and investment decisions are made. This is likely to promote further thinking about the use of contestability in policy advice and service delivery both within and between large public-sector organisations.
- Greater clarity in monitoring, with only one central monitoring agency being given “ownership” of public-sector performance. Where Crown entities have governance boards, then monitoring by ministries might be replaced by clearer and stronger accountability for the board in both monitoring and reporting to the minister on performance.
- A clearer distinction between organisations where all decision-making can be delegated to an entity whose objectives are defined by statute, organisations where governance can be delegated to a board, and organisations where the minister retains residual decision rights. In the latter case, advisory boards might assist with stakeholder consultation, but any confusion with governance would be removed. The more substantial is the delegation of residual decision rights by the minister, the stronger should be the focus on performance at the level of private-sector boards, with smaller numbers of board members and higher levels of remuneration per member.
- Less public ownership of service delivery, with wider delegation of responsibility for investment in outcomes and customer relationships to private or community service-delivery organisations. This existing model of the use of private general practices to delivery primary health care, and the Whānau Ora initiative, may be expanded into other areas of service delivery.
- Increased levels of private ownership of state infrastructure assets, with the contracts taking advantage of the recent literature on the ways in which contracts may be structured:
- To recognise the value of real options and the flexibility in the timing and staging of investment, and
- To incentivise appropriate levels of investment in quality improvement and cost reduction.
- Greater attention to the structure of compensation and reward, both to change incentives and to change the type of people who are attracted to public-sector organisations. This will include a focus on staff training and incentives in teams, the remuneration of those who have the strongest team-leadership skills, the ability of the public sector to ensure that individuals in the team display a diversity of complementary skills, and selective recruitment to senior positions from outside the public sector.
Each of these areas of policy development will of course need to be the subject of more detailed consideration and application of the framework that we have provided before explicit policy recommendations could be provided.
