International Themes in Public Service Reform


Index

Background Paper 3 1997-99

Michele de Laine
Consultant to Economics, Commerce and Industrial Relations Group
22 September 1997

Contents

Major Issues Summary

Introduction

Concepts in Public Service Reform

Characteristics of the Reformed Public Services Public Expenditure as a Share of GDP
Size of the Public Service
EEO Implications

Key Themes in the Reform Process Level of Political Involvement in the Reform Process
Level of Coherence of Reform Package
Differing Degrees to Which Agencies Are Given Autonomy
Role of Central Agencies in the Reform Process

Issues Arising from Reform Problems in Measuring Performance-Output, Outcomes and Quality Loss of Service-wide Perspective: Policy Coherence
The Maintenance of Ethical Standards
Accountability

An Evaluation of the Success of the Reforms

Conclusion: What Lessons Can Be Derived From These Experiences In Implementing Public Sector Reform?

Endnotes

References

Major Issues Summary

Australia has long been engaged in the process of public service reform, the pace of which quickened during the 1980s and early 1990s. The public face of the Australian Public Service (APS), the way in which work is organised and services delivered and the utilisation of technology in supporting changed work methods and increased productivity, have all changed markedly since the early 1980s.

Some of the initiatives pursued in this country were adapted or adopted from overseas; some Australian approaches to reform have been considered overseas.

Since the election of the Howard Government in March 1996, public service reform is again on the agenda. The National Commission of Audit has set out the Government's philosophical view on the delivery of government services, the Workplace Relations Act has been proclaimed and the Commonwealth Services Delivery Agency has been established out of elements of the Departments of Social Security and Employment, Education, Training and Youth Affairs. In addition, reform to the delivery of labour market programs is occurring with the Public Employment Placement Enterprise (PEPE) providing services formerly provided by the Commonwealth Employment Service (CES). The PEPE will compete for contracts to deliver employment placements with private and community sector providers. Commercialisation and privatisation, including the sale of the Department of Administrative Services (DAS) business units is proceeding. Proposed legislation to replace the Public Service Act 1922 has been introduced.

With this package of reforms in train, it is opportune to examine the scope of overseas reform, the successes and some of the issues emerging from both reform processes and outcomes. It is critical that the Australian quest for reform not overshadow or extinguish areas of excellence or best practice in the APS and the wider Commonwealth sector simply for the sake of change. For example, the APS has long prided itself on the maintenance of high standards of ethics in delivering services to the public. Whilst the 1996 World Competitiveness Report did not rate Australia's business managers highly, its public administrators were rated amongst the most professional and ethical. Successes of this kind need to be built on so that the Commonwealth public sector can deliver services in an efficient, effective and responsive manner.

The report entitled Governance in Transition reviews the reforms implemented by OECD countries in public sector management, and speaks of the emergence of a 'new paradigm for public management' which is characterised by a closer focus on results, decentralised management with stronger strategic capacities at the centre, flexibility to explore more cost-effective policy outcomes, and a greater focus on efficiency, productivity and competition.

The relative emphasis given to these ideas varies amongst OECD countries. Many of the characteristics of the paradigm have been in evidence in the public sector reforms which have occurred at Federal and State level in Australia since the early 1980s, and underpin many of the recommendations made by the 1996 National Commission of Audit. This paper focuses on the reform processes adopted in New Zealand, Britain, Canada and the United States which have been characterised by the separation of policy and operations and have involved both structural and functional changes. A common thread in the approach to reform has been the relative insignificance of the central people-management agencies to leadership of the reform process and the ascendancy of Treasury voices.

A reduction in the size of the core public service has been a uniform trend in the countries being examined. The reform processes adopted in New Zealand, Britain and Canada have reduced the size of departments of state principally through the creation of agencies charged with service delivery responsibilities. The effect on employment equity has not been consistent, but is a cause of concern in most countries and must be given due consideration in the reform process.

Differences in the way in which the process of reform has occurred, and the relationship between reform of the public service and partisan political imperatives, have proved to be significant. Visible political support for public service change is a vital key in the success of the reforms; but once the direction or course of the reform process has been set by political leaders, the intrusion of political considerations into the details of the reform strategy can work to undermine, contradict or limit the scope of reform.

The New Zealand reforms have been underpinned by a clear intellectual framework. Whilst the application of these principles to the wider public sector was largely successful and non-contentious in the eyes of commentators, the application of the same principles to the core public service has been controversial because it has seemed to lose sight of the multitude of factors which underpin sound strategic policy making. Britain, Canada and the United States have lacked such an easily identifiable framework for change.

Where policy and operations are separated, difficulty in effectively monitoring outcomes may lead to a possible divergence between the government's goals and those of the service delivery agencies. The task of monitoring and reporting on performance in a meaningful way, as well as ensuring that the government's interests are met, is a challenge still to be fully confronted by these reforming countries.

In an increasingly contractual service delivery environment, the ability to accurately and specifically prescribe the performance standards required, be they of a program or ethical nature, is becoming increasingly important, and there is a need to distil the ethical principles from the civil service cultural environment and determine whether they have continuing relevance. Where there has been a change from staffing based on tenure to the use of contracts, a further issue involves a perceived weakening of the professional ethic of public service. Closely related to this is the notion of accountability, and a concern that short-term focus on the impact of policies on the client may inhibit long-term vision and an assessment of the relevance of policies to the achievement of government goals; and whilst privatisation may be attractive, such a transfer of functional responsibility may not absolve government from ensuring that quality services are provided.

While overseas experience indicates that major reform can be achieved, and that public sector employment relationships can be decentralised relatively quickly, it also emphasises the importance of multi-party support, a reasonably coherent framework of ideas and achievable objectives, early demonstration of positive results, improvement in the quality and flow of information, and a need to align departmental management initiatives with the collective interests of government. Experience has also shown the necessity for improved systems of accountability to go with decentralisation or transfer of managerial authority, and for financial management reform to be integrated with overall management reform.

On the negative side, there is the potential for high fiscal and social costs due to restructuring, and the need to be aware that the costs of public sector downsizing include redundancy entitlements, loss of institutional memory, widespread anxiety, disrupted careers and employee suspicion of management. With the increasing pace of change, change-fatigued organisations lack the time for reflection, and are 'functioning much more as forgetting rather than as learning organisations'.

Ironically, the change process may be managed more effectively by adopting considered steps coupled with periodic reflection.

Introduction

The Public Management Service of the OECD in 1995 released the report entitled Governance in Transition: Public Management Reforms in OECD Countries. This report brought together a review of the reforms implemented by OECD countries in public sector management, and it identified common themes in approaches to reform and issues that still needed to be resolved.

The report noted that, for the public sector to remain responsive to the needs of those it serves, governments: …must foster the development of organisations that perpetually adapt and reshape themselves to meet changing client needs, and that develop new ways to cope with the changing world. Governments must be willing and able to learn.(1)

The driving force or common agenda identified in the report : …encompasses efforts to make governments at all levels more efficient and cost-effective, to increase the quality of public services, to enable the public sector to respond flexibly and more strategically to external changes, and to support and foster national economic performance.(2)

Governance in Transition identifies the emergence of a 'new paradigm for public management' in the OECD countries to stimulate 'a performance-oriented culture in a less centralised public sector'. According to the report, the paradigm-often called 'New Public Management' (NPM) or 'managerialism'-is characterised by:

  • a closer focus on results in terms of efficiency, effectiveness and quality of service
  • the replacement of highly centralised, hierarchical organisational structures by decentralised management environments where decisions on resource allocation and service delivery are made closer to the point of delivery, and which provide scope for feedback from clients and other interest groups
  • the flexibility to explore alternatives to direct service provision and regulation that might yield more cost effective policy outcomes
  • a greater focus on efficiency in the services provided directly by the public sector, involving the establishment of productivity targets and the creation of competitive environments within and among public sector organisations
  • the strengthening of strategic capacities at the centre to guide the evolution of the state and allow it to respond to external changes and diverse interests automatically, flexibly, and at least cost.(3)

Whilst the impression has been conveyed that adoption of the new management paradigm has been a global revolution, this is not the case. The relative emphasis given to these ideas varies amongst OECD countries(4), and those countries most influenced by managerialism appear to be those of the English-speaking group. Indeed, it has been suggested that NPM is an Anglo-American idea resulting from what has been referred to as 'the awfulness of the English'(5).

Many of the characteristics of the paradigm have been in evidence in the public sector reforms which have occurred at Federal and State level in Australia since the early 1980s, and underpin many of the recommendations made by the 1996 National Commission of Audit. Australia has been engaged in the process of public service reform since the mid 1970s, but the pace and scope of change quickened during the 1980s and early 1990s. Since the early 1980s there have been marked changes in the public face of the Australian Public Service (APS), the way in which work is organised and services delivered, and the utilisation of technology to support changed work methods and increased productivity. Some of the initiatives pursued in this country were adapted or adopted from overseas experience, and some Australian approaches have been considered overseas.

With the package of reforms initiated by the Howard Government in train, it is opportune to examine the scope of overseas reform, the successes, and some of the issues emerging from both reform processes and outcomes. This will assist in evaluating the trend and pace of reform in Australia.

Whilst the above characteristics may be taken to define the paradigm, the methodology by which different countries have sought to introduce and sustain programs of reform within their different political structures, and the relative emphasis given to each of the characteristics as goals of reform, has been anything but uniform. This paper will explore some of the themes emerging from the reform process in Canada, the USA, Britain and New Zealand, and will explore their relevance for reform in Australia. The themes in which country experiences are reviewed include:

  • the level of political involvement in the reform package, the level of coherence in the respective reform processes
  • the degrees to which agencies are given autonomy
  • the role of central agencies in the reform process.

However, there are characteristics or indicators of change which are common to the process-for example, changes to the size of the public service-and it is helpful to begin with a review of the characteristics.

Concepts in Public Service Reform

Public choice theory rests on the assumption that the behaviour of people individually and collectively, is driven by self-interest. This means that departments and agencies will act to ensure their continued viability and survival. It follows therefore, that such bodies should not both advise the government on policy directions and implement agreed policy. Consequently, in the reform process, policy advising functions and policy implementation (service delivery) functions are to be separated, usually with service delivery agencies being removed from departments of state.

Principal/agent or agency theory derives from the idea that political life can best be represented as a series of contracts between parties. The first party, the principal, enters into a contract with another party, the agent, by which the agent agrees to undertake various functions on behalf of the principal in return for an agreed reward. Consequently, considerable importance attaches to the negotiation and monitoring of contracts to ensure that services are being provided by the agent to the quality, cost and timeliness standards required by the principal. This is also referred to as the purchaser/provider split.

Contestability is a strategy to promote cost efficiency and effectiveness in the provision of goods and services. Traditionally, public service agencies have been the sole supplier of goods and services and advice to the government. The removal of barriers to private sector competition and the promotion of 'competitive neutrality'(6) are vehicles for promoting contestability.

Characteristics of the Reformed Public Services

One of the key reasons for reform of the public service has been economic, and is associated with ideas that the public service has become bloated, inefficient and unresponsive to the needs of clients. One of the strategies to address this has been to adopt business methodologies used in the private sector, including the wider use of information technology, in some cases coupled with an active privatisation program, transferring jobs from the public sector to the private sector. These reform strategies pursued in Englishspeaking countries have caused a significant reduction in the size of the core public service in each country.

The reform processes adopted in New Zealand, Britain and Canada have been characterised by the separation of policy and operations, involving both structural and functional changes. This split has acted to reduce the size of the departments of state, principally through the creation of agencies outside the core public service that are charged with service delivery responsibilities. Whilst the concept underpinning this development is the same, 'public choice', the manner in which it has been given effect varies between the countries(7).

Public Expenditure as a Share of GDP

Despite the rhetoric about smaller government, Governance in Transition found that no country for which internationally comparable data are available has been able to reduce its expenditure share (public expenditure as a percentage of GDP) below the 1970 level(8). Within this context and compared to other countries, Australian public expenditure (measured at 37 per cent of GDP in 1990) is one of the lowest in the OECD. It is close to, but lower than, that recorded by the other English-speaking countries. Several OECD nations recorded over 50 per cent, with Denmark, Norway and Luxembourg recording around 60 per cent.(9)

Australian net public debt (per cent of GDP/GNP) is also lower than that of most OECD countries, including Britain, the United States of America (USA) and Canada.(10) Nevertheless, concerns about government debt and budgetary restraints have been major spurs to public sector reform and the adoption of managerialism in this country.

Size of the Public Service

A reduction in the size of the public service has been a uniform trend in the different countries being examined. In New Zealand, for example, many functions were transferred from departments of state to Crown corporations set up to undertake commercial activities as state-owned enterprises on behalf of the New Zealand government, and many of these corporations have subsequently been privatised. This transfer accounts for most of the drop in public service numbers. In 1980, there were 84 153 staff employed in the New Zealand Public Service, but by 1995 this figure had fallen to 34 656 staff (permanent, temporary and wage)-a drop of 59 per cent. In the case of some departments, the reform process has been dramatic: in the Department of Transport in 1980 there were 4587 staff, but by 1995 only 53 remained to handle policy responsibilities(11).

Between 1979 and 1996, the number of permanent staff in the British Civil Service has dropped from 735 000 to 486 800, a reduction of 34 per cent. This reduction in numbers has been mainly caused by the movement of staff out of departments of state and into executive or Next Steps agencies from where privatisation was likely to follow. The Blair Government is preparing a white paper on public administration reform, but at this stage there appears bi-partisan support for 'Next Steps', although not necessarily for future privatisations(12). Approximately 72 per cent of Civil Service staff are currently employed in 124 Next Steps agencies, and this percentage is expected to rise to 75 per cent over 1997 with the conversion of 39 agency candidates into Next Steps agencies.(13)

In the United States, the third annual report of the National Performance Review (NPR) said that some of the 'best kept secrets in Government' included the fact that the USA federal government now has the 'smallest workforce in 30 years', having reduced its workforce by nearly 240 000 as at January 1996.(14)

EEO Implications

The effect on employment equity of reductions in the size of the public service has not been consistent, but is a cause of concern in most countries.

Britain represents a positive outcome. In November 1996, the Cabinet Office released a report on progress in implementing equal employment opportunity in the British Civil Service which indicated despite a fall in the number of civil servants, increasing proportions of them were disabled people, people from ethnic minorities and women. Indeed, the British Civil Service was the recipient of a Diversity Award for 1996(15).

On the other hand, in Canada, New Zealand and the United States there is some evidence that employment equity outcomes are eroding.

The Canadian Treasury Board reported that despite a reduction of 7.8 per cent in the overall size of the Canadian Public Service in 1995-96, its equal employment opportunity performance had been maintained.(16) Press reports, however, have questioned this, claiming that indigenous and disabled staff have been leaving in significant numbers in the downsizing program. This has been attributed to the disproportionate effect of downsizing on particular job classifications.

In New Zealand, under the State Sector Act 1988 there is considerable emphasis on organisations being good employers and on applying equal employment opportunity principles. Whilst agencies are required to report progress to the State Services Commission (the central personnel authority), achievement appears to lag behind rhetoric. Using personnel data for 1993 (cited in Boston et al), all EEO groups are greatly under-represented in management positions, although the representation of women in the public service is higher than in the labour market generally. In addition, the retention rate for women and Maori is poor. The numbers of women who are appointed to the public service is similar to the number who separate, but the number of Maori who separate is greater than the number being appointed. All employees in the EEO groups were appointed on salaries below the public service average.(17)

In the United States, the employment equity figures are also cause for concern. 1996 figures for minority representation show poor results with 43.8 per cent of non-postal jobs being held by white males, who are generally paid more than women and people in/from other EEO groups. Hispanics are under-represented in 38 of 40 federal agencies, women in 17 agencies and blacks in four.(18)

These results suggest that unless employment equity is given due consideration in the reform process; actively promoted as best practice in the utilisation of staffing resources and effective action taken to overcome shortfalls, outcomes for target groups are likely to deteriorate.

Key Themes in the Reform Process

Level of Political Involvement in the Reform Process

Amongst the countries being reviewed in this paper, there have been significant differences in the way in which the process of reform has occurred, and the relationship between reform of the public service and political imperatives.

In the case of Britain, former Prime Minister Margaret Thatcher drove the reform of the Civil Service over the 1980s, and her active and sustained involvement and leadership has been well documented. Small specialist units such as the Efficiency Unit and the Next Steps Unit were established within Number 10 Downing Street to spearhead change and overcome the perceived inertia of the Civil Service, and this hands-on approach to the reform process has been a hallmark of the British process. The hands-on approach of senior ministers has also been important to the previous government's successes.

The day after Prime Minister Brian Mulroney took office in Canada in 1984, he announced the formation of a task force to report on improving government program efficiency. By the time the task force reported, however, the political momentum was lost and no further reform occurred in the government's first term. In December 1989, in his second term, Mulroney launched PS 2000 to promote service to the public, innovation, accountability and improved personnel management in the public service. It was a process that involved 10 task forces chaired by deputy ministers (departmental secretaries) and was primarily an internal process.

Although PS 2000 was personally launched by Prime Minister Mulroney, neither he nor any of his ministers continued that political involvement. There was no linkage between the launch and the projects being promoted by senior departmental management and therefore PS 2000 was not seen as a key government initiative. The net result was that what had been intended to be a major vehicle for reform delivered only a limited number of useful changes.

The contrast between the high profile promotion of reform by Margaret Thatcher and the hands-off approach of Brian Mulroney could not have been more marked, and the difference is also clearly evident in the scale and pace of reform in their respective countries. The lesson for reformers would appear to be that visible political support for public service change, demonstrating the value placed upon the change process and on desired outcomes, is a vital key in the success of the reforms. Without this support it becomes altogether too easy to slip backwards into minor change around the edges of the civil service comfort zone.

On the other hand, once the direction or course of the reform process has been set by political leaders, the intrusion of political considerations into the details of the reform strategy can work to undermine, contradict or limit the scope of reform.

For example, in the UK there is evidence that political limitations have been imposed on the reform processes which agency chief executives can pursue within their agencies. The Public Accounts Committee reported that: Government's concern to balance autonomy and independence in the expenditure of public funds is also reflected in the balance between political objectives and due care in the expenditure of public money.

One example given at the time was the use of automated payments of benefits, generally accepted as the most secure and cost-effective means of delivery and preventing fraudulent misuse of conventional instruments of payment encased throughout post offices. Within concern raised by rural MPs, and post office organisations, about the threat this posed to the economic viability of post offices, [Social Security] Benefits Agency senior management were reluctant to push its use because 'ministers have no intention of putting all the post offices out of business or anything like that'.(19)

The effect of this intrusion was to introduce contradictory messages: chief executives were expected to deliver services in the most cost-effective and efficient ways but at the same time non-business considerations acted as a constraint on what they could do. This kind of contradiction needs to be dealt with in a structured fashion: the articulation of legitimate community service obligations (i.e. community services which would not be provided under strict cost effectiveness criteria) is one way to resolve this kind of dilemma.

Level of Coherence of Reform Package

New Zealand has the distinction of having pursued the most dramatic and radical path of reform of all the English-speaking countries, but this in part derives from its having the most antiquated delivery arrangements until 1984. Post, telecommunications, forestry, life assurance and electricity, for example, were all provided through departments of state. New Zealand did not experience the movement to transform such enterprise functions into corporate bodies which had recently happened in Britain and had been happening in Australia, Canada and the US for a century or more.

The appeal for many in the New Zealand reforms has been the clear intellectual framework that emerged. This included contestability, public choice, principal/agent theory and the separation of the government's ownership role from its purchasing interests(20). Whilst the application of these principles to the wider public sector, with the creation of state corporations and the privatisation program, was largely successful and non-contentious, the application of the same principles to the core public service has been controversial because it has seemed to lose sight of the multitude of factors which underpin sound strategic policy making. It has been observed that under the reforms, strategic decision-making will be more explicitly in the hands of Ministers and that 'this in fact was a key aspect of the reform program'(21).

Unlike New Zealand, the reform process in Britain has not had the coherence obtained from strictly following a theoretical model; indeed, it has been driven more through the political processes. This has meant that, although it is possible to distinguish a series of different influences and initiatives, there have been contradictions between them, and political needs have had supremacy. As put by a British official in 1993: …people at the top, actually, are very interested in the process of how you manage organisations and are quite keen to do something… [T]he striking point between us and New Zealand ... is if you ask people in this country to have a discussion with you about the application of principal/agent theory to their organisations they'll sort of say 'What?' If you ask them 'What do you think about Next Steps?' they'll probably say 'Well that's quite a good idea.' So it's not at all clear what's the intellectual and theoretical basis for what's being done. Moreover ... we've actually got a whole series of things all mixed up together and being presented as though they are a single whole... If you've got half-an-hour or an hour, I can do it for you. I do it all the time. But the cleverer people who I do this to often say, 'That's an elegant ex post facto rationalisation'.(22)

This should not be taken to say that conceptual models such as principal/agent and public choice have not had application in Britain. Overlaid on the concept which guided the Next Steps initiative have been iterative reform strategies, which were initially sequential and later cumulative. These strategies have included efficiency scrutinies (or Rayner scrutinies), the financial management initiative (FMI), the Citizen's Charter, Competing for Quality and benchmarking. The lack of an easily identifiable framework has meant that the reform process in Britain has lacked the clarity and pervasiveness that characterises the New Zealand reforms. In Canada and the United States, there has been no consistent effort at articulating a framework within which change was to be guided.

Differing Degrees to Which Agencies Are Given Autonomy

As discussed earlier, the reform processes adopted in New Zealand, Britain and Canada have reduced the size of departments of state principally through the creation of agencies charged with service delivery responsibilities. Whilst the concept underpinning this development is the same, i.e. public choice theory, the manner in which it has been given effect varies between the countries.

In New Zealand, the State Sector Act 1988 dissolved the previously unified public service, replacing it with a loose collection of freestanding agencies, with chief executives responsible to the relevant Minister for the operation of their agencies and the achievement of specified outputs. Agencies are discrete and structurally separate organisations from their parent departments, and are also separate organisations for employment purposes. Tenure was abolished for departmental heads; they became Chief Executives (CEs) appointed for renewable fixed terms. CEs became the employers of their staff and were required by law to be 'good employers' and to implement EEO principles. Staff of the public service were brought under the Labour Relations Act, which previously had only applied to the private sector. In addition, the State Sector Act created the Senior Executive Service, to act as a cohesive force in the otherwise disjointed new public service(23).

In Britain, the administrative arrangements linking departments and agencies and the processes by which powers are given to agency heads are different. In the UK, departments 'own' their agencies, so whereas in New Zealand the only relationship between various organisations is contractual, in Britain departments are linked to their agencies not only via a framework agreement and agreed operational plans, but also through an involvement in their daily management. This involves a blurring of roles.

The reform process in Britain can be further contrasted with that of New Zealand in that when agencies are formed in New Zealand, the enabling legislation bestows powers on the agency chief executive in his or her own right. In the UK this is managed as a delegation of powers and not a devolution, and such powers can therefore be revoked if an agency steps over the line. One is an empowering model based on trust; the other demonstrates a reluctance to relinquish central control(24).

In Canada, a pilot program initially introduced five Special Operating Agencies (SOAs). The SOAs were modelled on the Next Steps agencies introduced in the UK, with framework agreements and business plans that spelt out the results to be achieved in return for operational freedoms, and budgetary arrangements were negotiated for each individual agency. But the objectives and priorities of the SOA initiative were not clearly spelt out, and the Canadian SOAs have been granted less autonomy than the British agencies. This is partly due to the failure to clearly set out the objectives and priorities of the SOA initiative, and relates also to the structural arrangements adopted. In Canada, agency heads are required to report to the deputy minister (departmental secretary) of their department-and sometimes, in practice, the assistant deputy minister. In addition, they are not exempt from government-wide actions and policies(25).

The scale of the reform initiative in Canada has been far smaller than that in Britain, with only about three per cent of public servants working in an SOA in 1995, but following a review and subsequent widening of the initiative a further 30 organisations have expressed interest in becoming SOAs(26).

These differences in the implementation of the split between policy departments and operational agencies, and particularly the willingness to tackle machinery of government issues to provide a legislative separation, translate into clear gradations in the relative thoroughness of reform, and the success of its implementation.

Role of Central Agencies in the Reform Process

It might have been expected that the central agencies, and particularly those with the responsibility for providing guidance in the management of staff, might have taken for themselves a pre-eminent role in promoting the reform program adopted by government. But in so far as there are common threads in the approach to reform between the countries being examined, the relative insignificance of the central people-management agencies to leadership of the reform process and the ascendancy of Treasury voices has been characteristic. Further, the continued existence of central agencies could be seen to be anachronistic given the reform trend away from a centralised civil service towards devolution, decentralisation and fragmentation.

In New Zealand, with the election of the Lange government 'the most evident change in 1984 was the influence accorded to the Treasury'(27). Treasury was active in providing intellectual support for the reforms and actually published its own guidelines for sound economic management following the election. It augmented them after the 1987 election with the publication of its paper on government management(28).

Whilst the intellectual leadership of the reform process in New Zealand was provided by Treasury, the government's agent in the implementation of reforms has been its people management agency, the State Services Commission (SSC), which had legislative responsibilities given to it under the State Sector Act 1988. Since 1988 the SSC has faced an increasingly complex environment, with a general pattern of developments which raises questions about the role of a central agency in the new environment. This has meant that: The SSC has been caught between the expectations of government and those of CEs. The government has expected that the SSC would act as its agent, controlling pay increases and employment conditions, and promoting the dissemination of a new management culture. CEs and their human resource managers, especially in the public service, have felt frustrated by central constraints that limited their ownership of their employment relations. The SSC has dealt with this by a staged process in which it used its employer party status to negotiate contracts that as much as possible met the government's agenda, while over time loosening the degree of direct central control it exercised over negotiations.(29)

These changes have meant that the SSC itself has needed to adopt new ways of working. Before 1988 the SSC used its direct involvement as the principal means to achieve the government's agenda, and it still plays a direct role in monitoring agency EEO performance(30) and has a role in reviewing CE performance. Now, however, the SSC must rely on such things as the terms of delegations and new arrangements for financial management.

In addition, the SSC retains powers under the State Services Act in relation to the Senior Executive Service (SES). This constrains the way in which CEs may exercise their appointment powers, the employment conditions that may be offered and the numbers and profile of SES staff within each agency. The SSC also has a training role in relation to the SES.

Recently, the SSC has been active in advocating the need for agencies to adopt a strategic approach to human resource management, and it has been leading the development of new ethical standards applicable to the modern state service.

Because of the nature of its role, it is to be expected that there will remain some tensions between the SSC and agency CEs, but some of these are likely to diminish over time as all participants learn to work within the new system. It is unlikely that in the short term the government will choose to abolish the SSC or remove its people management responsibilities; rather, the SSC is faced with generally increasing responsibilities within the same resource allocation.

In the US, there are three central agencies, the Office of Management and Budget (OMB), the Office of Personnel Management (OPM), and the General Services Administration (GSA) of which it has been noted: In a world of government more concerned with the empowerment of lower echelons of the public service and of their clients, central agencies appear to be anachronisms. Furthermore, given the entrepreneurial values now motivating public managers, any attempts to create conformity and uniformity through central agencies appears as a barrier to what is perceived to be good management, rather than essential to proper public administration.(31)

Staff of the three central agencies also wish to be empowered, creating contradictions with their respective roles that need to be resolved. Whilst all of these central agencies had a vested interest in the National Performance Review (NPR), none played a key role in its implementation. While [OPM] has had some symbolic significance in reinvention-the director of OPM received substantial press attention for dumping the entire Federal Personnel Manual from a wheelbarrow onto the White House lawn-the overall capability of the organisation has been seriously diminished. Indeed, its complete elimination has been discussed.(32)

This is related to the effect of budget cutbacks on OPM, OPM's weak leadership during the Clinton Administration, and its focus on its own restructuring. OMB was also absorbed in its own reorganisation, which diminished its influence in the reform process. However, it has been involved in the implementation of pilot programs associated with the Government Performance and Review Act, which underpins reinvention efforts.

The protracted nature of the reform process has led to a lack of system direction, and coupled with the severe cutbacks in funding to the central agencies, has meant that there is no-one articulating the need for a strong public service(33).

The OECD report Integrating People Management into Public Service Reform makes the point that whilst the balance between central human resource management controls and managerial flexibility is still evolving in most countries, reforms are often promoted by central agencies with success tied to ongoing support from both the political level and some influential unit with the responsibility for shepherding the reforms.(34) The lack of strong political and bureaucratic leadership in the case of the USA NPR reforms has been said to have limited the success of the reforms. Amongst career officials, there is considerable cynicism about the NPR, with some of them commenting that the reforms 'will pass'. What may 'stick', however, is likely to be: …'a smaller federal public service, a more insecure OPM, a somewhat confused OMB and a GSA that will be trying as best as it can to walk both sides of the street-a central agency and a provider of service in competition with others'. Clearly, 'this' might pass, but it has the potential to leave in its wake a new relationship between the centre of government and line departments and agencies.(35)

In Canada, there are two central agencies with responsibilities for the public service, the Treasury Board Secretariat (TBS), which is the general manager of the public service, and the Canadian Public Service Commission (CPSC), which has responsibilities for servicewide human resource management policy.

The announcement of PS 2000 provided the opportunity for the Canadian TBS, as elsewhere, to advance other proposals for reform that it had in train. In particular, TBS staff had been examining Next Steps to see what could be applied in Canada. TBS was positioned to play a leading role in the development and implementation of recent reforms, and the Clerk of the Privy Council has stated that TBS 'will provide leadership and strategic direction' as the government defines its 'optimal service delivery network'(36).

The reform process has meant reform for TBS itself and having to move towards a reduction in direct control and regulation, placing more emphasis on policy leadership.(37) The relationship of the TBS with some other organisations such as the CPSC is also changing. The role and issues for the Public Service Commission are more circumscribed:

  • How best to ensure that democratic, professional and ethical values continue to permeate our public sector organisations appropriately, regardless of form?
  • What is the appropriate scope and degree of the PSC's involvement and how can it best ensure a competent, nonpartisan and representative Public Service in the emerging governance system?(38)

Answers to these and other questions will no doubt be sought through a high-level committee commissioned with developing a blueprint for the Canadian public service into the next century.

In a transitional environment such as the one that exists in these reforming countries, reform efforts are unlikely to achieve maximum effectiveness unless central agencies provide some guidance to agencies. Removing the prescription without providing some direction leaves a vacuum. As noted in the OECD study Integrating People Management into Public Service Reform: Countries achieving the most change have made key reforms mandatory for line departments and agencies finding that, in the initial stages, relying purely on departments and agencies to develop human resource management initiatives is not effective. However, those countries that have achieved significant decentralisation emphasise that as the reforms progress, central agencies must relinquish control and line departments and agencies must participate actively in developing their own human resource management strategies and setting their own rules of operating.(39)

Issues Arising from Reform

Problems in Measuring Performance-Output, Outcomes and Quality

In looking at the reform experiences of the English-speaking OECD countries, the question of how to measure success-or, indeed, change-becomes apparent. Of these countries, only New Zealand has commissioned comprehensive evaluations of the total reform package. They were undertaken by Basil Logan in 1991(40) and by Allen Schick in 1996(41).

In Canada, for example, whilst improvements in service delivery have been identified in some SOAs such as the Passport Office, in general the measurement, evaluation and reporting on performance has been disappointing. For adequate comparisons to be made, baseline data is needed on performance in the area before the change to agency status. Such data is frequently unavailable, and performance indicators are limited and primarily financial. Some agencies apparently either do not prepare annual reports or do not publish them(42). This makes an assessment of the value of reform difficult, if not impossible.

For service delivery agencies, some aspects of performance can be managed through contracts that specify outputs. However, where policy and operations are separated, policy or regulatory agencies may find it difficult to effectively monitor the outcomes achieved by the service delivery agencies. This may lead to a possible divergence between the government's goals and those of the service delivery agencies. Further, information from service deliverers must be fed back into the policy development cycle, so that policy does not get out of touch with consumer demand. A remaining challenge in New Zealand is for the government to redress the imbalance in the performance monitoring system between outputs and outcomes, such that it regularly makes a serious assessment of the outcomes of the policy directions being pursued and not just the outputs produced by agencies.

Next Steps agencies in Britain generally have throughput targets and goals for efficiency and quality, as well as financial objectives. The Social Security Benefits Agency, for example, in 1992-93 had 23 high-level service delivery targets, including its commitments under the Citizen's Charter(43). Much of the popular criticism of the reforms, and especially of the Citizen's Charter, has been that the performance focus has been on throughput at the expense of quality(44). With restricted resources, focusing on throughput (or speed) can cause a drop in accuracy such as the Benefits Agency experienced in 1993, and it can also detract from other aspects of client care. In some cases, if the indicators are not selected properly, the whole program can be hijacked. Although itself not an agency, this danger is illustrated by the situation in the Foreign and Commonwealth Office, where some staff apparently do not open files until there is a prospect that the case can be completed within the time specified in the performance indicator(45).

The task of monitoring and reporting on performance in a meaningful way, as well as ensuring that the corporate interests of government are met, is a challenge still to be fully confronted by these reforming countries.

Loss of Service-wide Perspective: Policy Coherence

In Logan's review of the New Zealand public service reforms, a common criticism was the lack of a unifying strategy at the political level on desired government outcomes, which would carry across to the determination of priorities to be sought from departments. He said that: …we found a widespread view among public servants that the structure of performance management has not been completed by the development of an integrated view of ultimate policy goals developed at the Cabinet table.(46)

This deficiency has increased the likelihood that the collective interest of the government may not be met, with different agencies pulling in different directions.

The New Zealand government's response to this gap has been to revise its strategic planning framework, introducing a Strategic Result Areas (SRAs) and Key Result Areas (KRAs) approach, and requiring that CEs' performance agreements dovetail into this process. CEs' performance agreements are now required to specify the SRAs to which their agency will contribute, and outline several KRAs that are expected to contribute to those SRAs, to the Minister's priorities and to the 'strategic effectiveness' of their agency. In this way, the performance agreements have become a critical tool in furthering the political goals of the government.

In 1996, the State Services Commission chaired an inter-departmental working group which produced a report that sought to clarify the government's expectations as the owner of departments, and it suggested ways of meeting these expectations. This approach was also intended to ensure better alignment between agencies and government priorities(47).

Again, this is an emerging issue in all countries where the direction of reform is moving towards the fragmentation of the unified public service.

The Maintenance of Ethical Standards

The maintenance of appropriate ethical standards to accompany the transformation of traditional civil services into new organisational forms and modes of service delivery has not received the level of attention that might have been expected, especially given the contemporary interest in ethics, and the exposure in the press of possibly unethical behaviours. Ethics are of value not only to citizens but to those involved in commercial transactions with governments. It is worth noting that while the 1996 World Competitiveness Survey did not rate Australia's business managers highly, the same survey ranked Australia's public administration as amongst the most professional and ethical-that is, it rated highly on its transparency (communicating government intentions to the community) and the absence of improper practices such as bribery and corruption(48). This is not to be taken to suggest that the further public sector reform is carried out, the more likely is there to be a weakening of public administration values: New Zealand ranked very highly on some of the key public administration indicators in the same report.

Nevertheless, there are issues that warrant consideration in terms of the operation of mainstream public service agencies as well as the standard of conduct that should be applied to organisations delivering government services as GBEs or outsourced bodies. One of the challenges facing practitioners and policy makers alike is the need to distil the ethical principles from the civil service cultural environment-in other words, separate the principles from the way in which they are practised-and determine whether they have continuing relevance. It is in this area, particularly, that differences between the public and private sectors might be seen. In an increasingly contractual service delivery environment, the ability to accurately and specifically prescribe the performance standards required, be they of a program or ethical nature, is also becoming increasingly important, and may influence the success or otherwise of the delivery arrangements(49).

A further issue affecting the core public service in countries such as New Zealand, where there has been a change from staffing based on tenure to the use of contracts, involves a perceived weakening of the professional ethic of public service(50). This weakening has been attributed to the shift to 'strong vertical lines of accountability between Ministers and chief executives and away from collective discipline and strong central management and the increased uncertainty and risk of the period of restructuring of the public service which some saw as demoralising and corrosive to loyalty'(51). Changing patterns of employment such that the public service is no longer a '45-year career haven', are also identified as being significant. Schick takes this further, concluding that the contractualism of the New Zealand public service is itself a contributor to the reduction in the ethos of public service: Responsibility itself is not sufficient assurance of effective performance; if it were, there might have been no need to overhaul public management. Yet something may be lost when responsibility is reduced to a set of contract-like documents and auditable statements. In the new world of New Zealand management, it is urgent to uphold the old-fashioned tenets of managerial responsibility, while strengthening the modern instruments of managerial accountability.(52)

The suggestion therefore, is that the quality of the employment relationship may have deteriorated and that public servants may have a sense that they no longer have a general duty of loyalty to the Minister and the government of the day. The notion itself of public service and the commitment and preparedness to make extra efforts in the spirit of that service may be diminished because of this change.

Accountability

Closely related to the need to maintain appropriate ethical standards in the new future of public service delivery is the preservation of the notion of accountability. Lines of accountability in a Westminster system have the marks of familiarity, if not clarity. With the dismantling of such a system, concern has been expressed that inadequate attention has been given to reassessing the relationship between politicians and civil servants and where the responsibility should lie. One could go so far as to ask: just who are the civil servants in this new environment?

Although New Zealand's administrative arrangements best demonstrate the accountability characteristics identified by Stone(53), a case illustrating many of the dilemmas of accountability in the modern management environment involved the collapse of a viewing platform at Cave Creek, in New Zealand's South Island, in April 1995. The collapse caused the death of fourteen people and the injury of another four, with one person being left tetraplegic. The platform had been built by the Department of Conservation (DOC), which administers the area(54).

The New Zealand Government responded to the disaster by instituting an inquiry under a District Court Judge. Judge Noble found that the defective viewing platform had breached both the Building Act and the Health and Safety in Employment Act, each of which exempted the Crown from prosecution. The platform had not been built to the appropriate building standard, and integral to its collapse was a lack of adequate fastenings: in the evidence, it was put that $20.00 worth of nuts and bolts would have secured the structure. It was found that the breaches were due in part to the Department's failure to have in place an adequate project management system. Judge Noble noted that 'while a lack of money was not the cause of its collapse', the platform had been 'conceived and built within a culture developed to do more with less'(55). One commentator discussed the resulting conflicts of principle and objectives in the following terms: …what was to be regarded as an output, and what was an outcome, given that the chief executive was responsible for the former and the minister for the latter? Was a bag of bolts an 'output' that should have been purchased by the minister in order to ensure a desirable outcome in the form of a safe viewing platform? On the caveat emptor principle, should not the minister have been wary of buying faulty goods? Was a safe platform-rather than an unsafe one-itself an output that should have been 'produced' by the chief executive? Had the state sector reforms rendered DOC (and other departments) more concerned with measuring outputs, especially under the new financial management strictures embodied in the Act, than with producing desirable results? Judge Noble thought so (Commission of Inquiry 1995, 76). Sadly, though tragically undesirable the actual outcome was precise and measurable: 14 dead and four injured.(56)

The Cave Creek incident demonstrated conclusively that instead of removing the 'enveloping haze' surrounding the accountability of civil servants and ministers, the public sector reforms in New Zealand had created greater fog. The incident also suggests that the two key pieces of legislation-the State Sector Act 1988 and the Public Finance Act 1989-work at cross purposes, leading to the conclusion that: …the statutory inventiveness of the reforms' quest for sharper public service accountability can still be defeated by political expediencies.(57)

The Cave Creek incident also demonstrates that 'management reforms are increasingly compartmentalising government in part by focusing on what is in the box which can be controlled by an individual manager'(58). A corollary of this is the resultant tendency of managers to respond by defining what is in the box very narrowly, and this may be dysfunctional. The question then is: 'Who is worrying about the big areas of performance outside the narrow boxes defined for managers?'(59) Is there a focus on the short-term impact of policies on the client, at the expense of long-term vision and an assessment of the relevance of policies to the achievement of government goals?

Another major accountability concern arises where governments privatise public organisations which are involved in the delivery of programs to citizens. Whilst privatisation may be attractive because of the possibility of cheaper service delivery, to reduce the size of the public service because of an ideological belief that private sector delivery is always more efficient, such a transfer of functional responsibility does not absolve the government from ensuring that quality services are provided. However, the change in service delivery arrangements shifts accountability or redress mechanisms from the political arena to the legal. In the process of moving from a public monopoly to market-driven services, government's public accountability is replaced by contractual relationships. As the relationships are established, issues concerning the quality of the service are moved from the ballot box, where they used to be when the provider was a government entity, to the courts, where disputes over contract are adjudicated. The problem, as some writers see it, is not with the paring of some expenses from public budgets but with the abdication of the government's responsibility for the welfare of its citizens, which can result when public services are contracted out.(60)

These concerns also are especially real in social justice terms; the people most in need of the broader welfare role of government (not just social security) are those least likely to be able to challenge its non-provision.

An Evaluation of the Success of the Reforms

As can be seen from the discussion above, the scale and impact of the reform process on the structure and operations of the public service in the several countries has been different, and could roughly be described in terms of a continuum ranging from New Zealand at the most comprehensive end, through Britain to the United States of America and Canada. For the sake of completeness, although not discussed here, Australia would be ranked alongside Britain in terms of the breadth of its reform efforts since the early 1980s. What then are the key issues which can be distilled from the experience of these countries?

Public service reform in Canada is typified by the term 'episodic'. A lack of political involvement in pursuing reform, which conveyed the impression that it was not of national importance, limited its scale and dimension.

In the USA, the need for 'more clearly linking the question of what government ought to do and how government ought to do it' is seen as one of the biggest challenges to the success of the National Performance Review(61). In addressing this fundamental question, it would be expected that some of the other contradictions between the legal framework applying to the public service and the aims of the reinvention movement-thrown up by the adage to 'steer more, row less'-would be resolved.

A persistent question asked in Britain has been: 'Next Steps to where?' In other words, what is the strategic direction and how do the various reforms assist in achieving this goal? The reform process has focused almost exclusively on improving client service, a short-term goal, at the expense of improving the government's strategic capacity and direction. The reforms that have been introduced have not been integrated, and the inseparable linkage between policy development and implementation has not been adequately recognised in terms of 'getting policy right'(62).

Further, although the reforms introduced in Britain have been intended to facilitate the empowerment of managers and decentralisation, Britain has not undertaken the structural, machinery of government changes necessary to provide clarity in the separation of functions. In other words, there is a gap between the rhetoric of reform and its results, which has led some commentators to conclude that 'so far, few firm and far-reaching consequences have been manifest'(63). In his 1996 review of the New Zealand reforms, Schick suggested that the impact of the reforms could be heightened by improving: …strategic management (i.e. increasing the State sector's capacity in planning for the future); the resource base (i.e. getting the financial incentives right for managers and getting the price right for the production of outputs); and accountability (in terms of developing a model of responsibility which is based not only on the specification of results but also on values, judgement and leadership).(64)

Conclusion: What Lessons Can Be Derived From These Experiences In Implementing Public Sector Reform?

Gary Sturgess, in a provocative article entitled Virtual Government: What Will Remain Inside the Public Sector? addresses the question of where public sector management reform is heading. He postulates that: If the defining metaphor of the industrial state was the railway, then the image which best captures post-industrial government is the Internet. Government in the future will look less like BHP and more like Benetton. When Luciano Benetton comes to work in the morning, he does not walk into a knitting mill and spend the day supervising row after row of machines. He walks instead into an office and contemplates a pile of contracts. The vast bulk of Benetton's garments are manufactured, distributed and sold under contract. All that Benetton owns is what he needs to own in order to add value.(65)

Whilst this appears to be the direction in which reform is currently progressing in the Anglo countries, it is not matched by developments in other OECD countries which have not been as eager to embrace economic rationalist arguments and public choice models of governance. Although in vogue now, are these developments likely to have the longevity of say the Northcote-Trevellyan reforms as an organisational principle for the civil service, or are they part of that cyclical phenomenon in public sector management in which the pendulum swings first in one direction and then the other?

Certainly the coal mine canaries are warning about what they see as 'the substitution of broad and banal formula for specific decisions in the particular case', whereas 'in the good society there is in these matters one dominant rule: decisions must be made on the social and economic merits of the particular case. This is not the age of doctrine; it is the age of practical judgment'(66).

Are there any learnings that can be derived from these overseas experiences in implementing public sector reform? Jonathon Boston has synthesised the lessons from the New Zealand experience of reform into the following points, which may offer useful guidance for effective public sector reform: a. For successful implementation, major reforms require a high level of political support, ideally of a multi-party nature. Additionally, rapid implementation will be much easier where key officials accept the need for change and endorse the main reform initiatives.

b. It is desirable to start any major reform programme with a reasonably coherent framework of ideas and clear, achievable objectives.

c. Careful consideration must be given to the ordering of the reform process, including the political desirability of being able to demonstrate positive results early in the process.

d. Although organisational restructuring is often necessary and desirable, especially in the event of major changes to an agency's purpose or mission, such restructuring can have high fiscal and social costs. Major restructuring should not, therefore, be embarked upon lightly. Further, administrative reorganisation should always be accompanied by consideration of the implications for constitutional arrangements, particularly the location of political responsibility.

e. It is possible to decentralise public sector employment relationships relatively quickly. Similarly, the transition from a highly centralised bargaining system to one based largely on enterprise or departmental bargaining can be achieved without great difficultly.

f. In certain circumstances, it is possible to downsize the public sector very considerably in a relatively short time-frame without major industrial disruptions. But it depends on a willingness to pay the price in terms of redundancy entitlements, loss of institutional memory, widespread anxiety, disrupted careers, and employee suspicion of management.

g. Any centralisation or transfer of managerial authority must go hand in hand with improved systems of accountability, including both ex ante contract specification and ex post reporting.

h. Improving the quality and flow of information available to decision-makers is a vital ingredient in the quest for improved performance, both by individuals and organisations.

i. Financial management reform will be much more successful when integrated with overall management reform, including employment practices such as the ability of senior managers to obtain the right mix of staff and legislation making CEs responsible for financial management.

j. Under a decentralised system of management there is a corresponding need for processes to align departmental management initiatives with the collective interests of government.(67)

Whilst these characteristics have been present in different mixes and to different degrees in the various Anglo countries discussed above, there is a degree of correlation between the application of these pointers and the scale and success of the reform programs being pursued. The New Zealand reforms, whilst demonstrating all of these characteristics, most clearly illustrate the importance of conceptual clarity in the reform program to its success. Britain, on the other hand, has achieved success with its reforms because of the political primacy accorded the reform agenda and the leadership and support provided by the then Prime Minister Margaret Thatcher. Nevertheless, because the implications of some reform initiatives in the UK were not fully considered before they were implemented, there have been some contradictions between them and a weakening of the process.

In seeking to understand the process of change, 'it is possible to distinguish between changes which are concerned with the role, boundaries and structure of governments and those more concerned with the internal management 'paradigm' of the public sector'.(68) Since there are elements of change common to both, the distinction is not entirely satisfactory, but the structure and boundaries of the state are changing in many countries. The kinds of major change seen in the UK and in New Zealand are clearly examples of the first category; with the USA in the second category. In the case of Canada, its focus until recently has been on the internal management paradigm but is gradually moving into the former group.

Another distinction arises through differences in responsibility for direct service provision, as occurs between unitary systems of government (such as the UK and New Zealand) and federal systems (Canada and Australia). A further distinction is the different emphasis placed on outputs and outcomes in different jurisdictions, again with the UK and New Zealand adopting the former and Australia the latter approach(69).

There are considerable similarities in the reforms adopted between the Anglo-American countries, which in some cases can be explained by the process of information sharing and experiential learning(70).

Whilst considering Boston's points as guidelines for the effective management of the change process may indeed be useful for those charged with steering the course of public sector reform, the implementation of any significant program of reform will necessarily mean that decisions are being taken, consciously or pragmatically, about some of the perennial issues in public sector management. Some of the more significant ones include:

  • Where should the boundary be drawn between the public and private sectors?
  • What is the proper boundary between politics and administration?
  • What are the proper limits to administrative discretion?
  • How should public institutions be designed so as to meet the special needs and interests of cultural minorities?
  • What is the appropriate balance between centralisation and decentralisation?
  • Is it necessarily best for agents to serve only one principal?
  • How can the multitude of formally autonomous yet functionally interdependent organisations that constitute the public sector be effectively coordinated?
  • How should performance be measured in the absence of a bottom line?
  • What are the duties of public servants?(71)

Rather than focusing on formulaic models to drive civil service organisational principles and methods of service delivery, the more useful question is, what does the state need to undertake to add value in society, and, how can more meaningful partnerships be constructed between the many different components of the public and private sectors?(72)

A thorough understanding of earlier reform experience, both local and overseas, is invaluable in preventing the reinvention of the wheel and in avoiding the repetition of problems. With the increasing pace of change, and the overlay of different reform initiatives, many organisations are change fatigued, lacking the time for reflection and are 'functioning much more as forgetting rather than as learning organisations'(73). Ironically, the change process may be managed more effectively by adopting considered steps coupled with periodic reflection.

In terms of progress in reform, the experience of Australia's fellow Anglo countries has varied from massive change in New Zealand, through substantial change in Britain (and Australia), down to fairly modest changes in the USA and Canada. The change process has introduced many improvements particularly again in Britain and New Zealand, but some dysfunctions remain to be addressed. The overall verdict on the success of the reforms is, as Chou En Lai is reputed to have responded to a question about the French Revolution by saying that 'it was a little too early to tell'(74). The challenge for Australian reformers is to build on Australia's already substantial public sector reform successes, utilising learnings from overseas experience.

Endnotes

  1. Organisation for Economic Co-operation and Development (OECD), Governance in Transition: public management reforms in OECD countries, (Public Management Committee, PUMA), OECD, Paris, 1995, p. 7.
  2. ibid.
  3. ibid., p. 8.
  4. F. Ridley, 'The New Public Management in Europe: Comparative Perspectives', Public Policy and Administration, 11 (1), 1996, p. 16.
  5. Frank Castles quoted in Christopher Hood, 'United Kingdom: From Second Chance to Near- Miss Learning', chapter 2 in Lessons From Experience: Experiential Learning and Administrative Reforms in Eight Democracies, Johan Olsen and B. Guy Peters, (eds), Scandinavian University Press, Oslo, p. 274.
  6. Competitive neutrality involves ensuring that public sector agencies do not gain any benefits associated with their public sector status which might otherwise give an advantage in a competitive environment.
  7. Public choice theory originally evolved in the 1960s amongst economists, who believed that government had grown too large. It did not impact upon political leaders until after the oil shocks of the 1970s and the ensuing stagflation. The analysis presented at that time by William Niskanen of the 'budget maximisation' behaviour of bureaucrats in seeking to enhance their budgets because of an overlap between their own personal interests and the benefits of a large budget, appealed to leaders such as Margaret Thatcher. See Colin Campbell, 'Does Reinvention Need Reinvention? Lessons From Truncated Managerialism in Britain', Governance 8 (4), 1995, pp. 482-485
  8. ibid., p. 19.
  9. Economic Planning Advisory Commission (EPAC), Public Expenditure in Australia., AGPS, Canberra, 1994, p. 2.
  10. ibid., p. 15.
  11. State Services Commission, fax on public service numbers, November 1996.
  12. The title 'Next Steps' derives from the report of the Efficiency Unit in 1988, entitled Improving Management in Government: the Next Steps. Based on interviews with managers across the Civil Service, the report examined obstacles to improving efficiency and effectiveness. It recommended that since government was not homogeneous and a large proportion of government business involved the execution of policy (ie. service delivery) rather than policy development, it could be better managed by separating these two functions and acknowledging the difference. This led to the creation of executive or Next Steps Agencies. In opposition, the Labour Party strongly opposed the privatisation of Her Majesty's Stationery Office and the recruitment Services and Assessment Agency, but did not oppose 'Next Steps'.
  13. UK Cabinet Office, Press release OPS 77/96. Full listing of press releases is at http://www.coi.gov.uk/coi/depts/GCO.
  14. US National Performance Review, Reinvention Express 2(20), 25 September 1996, http://www.npr.gov in the news room.
  15. UK Cabinet Office, press release, OPS 173/96. Full listing of press releases is at http://www.coi.gov.uk/coi/depts/GCO.
  16. Treasury Board Secretariat of Canada, On Track Towards Smaller, More Affordable Government, 2 August 1996, http://www.tbs-sct.gc.ca/.
  17. Jonathan Boston et al, Public Management: The New Zealand Model, Oxford University Press, Auckland, 1996, p. 255.
  18. Cited in Joanne Llewellyn and Margaret Varghese, 'International Trends in Public Administration: Notes', Canberra Bulletin of Public Administration 82; also published on Public Service and Merit Protection Commission homepage at http://www.psmpc.gov.au/ref/cbpa82.htm.
  19. UK Public Accounts Committee report quoted in Alan Doig, 'Mixed Signals? Public Sector Change and the Proper Conduct of Public Business', Public Administration 73, Summer 1995, p. 206.
  20. See Boston et al, op. cit., chapter 2 for a discussion of these theories and their application to New Zealand. Graham Scott and Peter Gorringe in their article, 'Reform of the Core Public Sector: the New Zealand Experience', Australian Journal of Public Administration, 48(1), 1989, pp. 81-82, discuss the theoretical underpinning of the reforms.
  21. Malcolm Holmes and David Shand, 'Management Reform: Some Practitioner Perspectives on the Past Ten Years', Governance 8, 1995, p. 570.
  22. Colin Campbell, 'Does Reinvention Need Reinvention? Lessons From Truncated Managerialism in Britain', Governance 8(4), 1995, p. 499.
  23. Boston et al, op. cit., p. 211.
  24. Although the Next Steps initiative was underpinned by ministerial accountability, Labour in opposition sometimes suggested that agency chief executives should instead be accountable to select committees. This might be an issue to be addressed in the forthcoming White Paper. It is however likely that the new government will consolidate existing reforms and seek further efficiencies, for example through the promotion of electronic government services and similar changes.
  25. David Wright and Graeme Waymark, Special Operating Agencies: Overview of the Special Operating Agency Initiative (Canadian Centre for Management Development Management Practices No. 10), Canadian Centre for Management Development, Montreal, 1995, p. 2; and F Leslie Seidle, Rethinking the Delivery of Public Services to Citizens, Montreal, Institute for Research on Public Policy, 1995, pp. 82-83.
  26. Wright and Waymark, op. cit., p. 2.
  27. Laking, 'Changing ideas of public service in New Zealand', Asian Journal of Political Science, 3(1), June 1995, p. 94.
  28. ibid.
  29. Boston et al, op. cit., p. 243.
  30. ibid.
  31. Donald Savoie and B. Guy Peters, 'Managing Incoherence: the Co-ordination and Empowerment Conundrum', Public Administration Review, 56(3), 1996, p. 283.
  32. Patricia Ingraham, 'Reinventing the American Federal Government: Reform Redux or Real Change?', Public Administration, 74, Autumn 1996, p. 462.
  33. Alan Dean (with Dwight Ink and Dona Wolf), 'The US Experience of Civil Service Reform', seminar presentation, Centre for Research in Public Sector Management, University of Canberra, August 1996.
  34. OECD, Integrating People Management into Public Service Reform, (Public Management Committee, PUMA), Paris, OECD, 1996, Summary at http://www.oecd.org/puma/mgmtres/hrm/pubs/ipm96/summary.htm
  35. Savoie and Peters, op. cit., p. 287.
  36. Seidle, op. cit., p. 93.
  37. W. Phidd, 'Public Sector Organizational Reforms in Canada: Five Departmental Case studies', paper presented to the 'Executive at the Political Vortex' Conference, Structure and Organization of Government Research Committee of the International Political Science Association, Canberra, 1-3 August 1996, p. 15.
  38. Canadian Public Service Commission, Annual Report 1995-96, at http://www.psc-cfp.gc.ca.
  39. OECD, Integrating People Management into Public Service Reform, Summary of Key Findings.
  40. Basil Logan quoted in Laking, ibid, p. 96.
  41. Allen Schick, The Spirit of Reform: Managing the NZ State Sector in a Time of Change (report prepared for the State Services Commission and the Treasury), State Services Commission, Wellington, 1996.
  42. Wright and Waymark, op. cit., p. 7. Seidle, op. cit., p. 84.
  43. Seidle, op. cit., p. 37.
  44. Norman Flynn, 'Case Study: Next Steps Agencies' in Norman Flynn and Franz Strehl (eds), Public Sector Management in Europe, Hertfordshire, Prentice Hall, 1996, pp. 76-77.
  45. ibid.
  46. Laking, op. cit., p. 96.
  47. New Zealand State Services Commission, Annual Report 1995-96, The Commission, Wellington, 1996, p. 8.
  48. International Institute for Management Development (IMD), The World Competitiveness Report, World Economic Forum, Lausanne, Switzerland, 1996.
  49. See the series of three articles by Chris Aulich and Kylie McIntosh in the 'Economic Notes' series, 'Market Forces' section of the Canberra Times, 21 November, 5 December and 19 December 1996.
  50. Allen Schick, The Spirit of Reform: Managing the NZ State Sector in a Time of Change, (Report prepared for the State Services Commission and the Treasury), State Services Commission, Wellington, 1996, p. 25.
  51. Laking, op. cit., p. 100.
  52. Schick, op. cit., p. 85.
  53. See Bruce Stone, 'Administrative Accountability in the "Westminster" Democracies: Towards a New Conceptual Framework', Governance 8, 1995, pp. 505-526.
  54. See Robert Gregory, '"Careful Incompetence" at Cave Creek? Responsibility for a National Tragedy', paper presented to the 'Executive at the Political Vortex' Conference, Structure and Organisation of Government Research Committee of the International Political Science Association, Canberra, 1-3 August 1996.
  55. Gregory, ibid, p. 3.
  56. ibid., p. 11.
  57. ibid., p. 16.
  58. Holmes and Shand, op. cit., p. 566.
  59. ibid.
  60. Arie Halachmi, 'The Challenge of a Competitive Public Sector', in Arie Halachmi and Geert Bouckaert, The Enduring Challenges in Public Management: Surviving and Excelling in a Changing World, Jossey-Bass, San Francisco, 1995, pp. 231-232, drawing on Morgan and England, 1988, p. 984, and Abramoritz, 1986.
  61. Donald Kettl, 'Deregulating at the Boundaries of Government: Would it Help?', in John J DiIulio (ed.), Deregulating the Public Service, Brookings Institution, Washington, 1994, pp. 61-62.
  62. Holmes and Shand, op. cit., p. 567.
  63. Peter Barberis quoted in Flynn, op. cit., p. 78.
  64. New Zealand State Services Commission, Annual Report 1995-96, Wellington, 1996, p. 8.
  65. Gary Sturgess, 'Virtual Government: What Will Remain Inside the Public Sector?', Australian Journal of Public Administration, 55(3), 1996, p. 60.
  66. Norman Abjorensen, 'Galbraith Finds Much to Lament and to Criticise', The Canberra Times, 9 March 1997.
  67. Boston, ibid., pp. 264-265.
  68. Malcolm Holmes and David Shand, 'Management Reform: Some Practitioner Perspectives on the Past Ten Years', Governance 8, 1995, p. 553.
  69. ibid., p. 553-4.
  70. See Johan Olsen and B. Guy Peters, eds, Lessons From Experience; Experiential Learning an Administrative Reforms in Eight Democracies, (Oslo: Scandinavian University Press), 1996.
  71. Boston, ibid., pp. 8-9.
  72. Sturgess, ibid., p. 72.
  73. Ewan Ferlie with Lynn Ashburner and Louise Fitzgerald, 'Corporate Governance and the Public Sector: Some Issues and Evidence from the NHS', Public Administration 73, Autumn 1995, p. 391.
  74. Quoted in Holmes and Shand, ibid., p. 551.

References

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