Britain and the US should follow New Zealand’s example of Public Sector Reform

Posted by PITHOCRATES - August 12th, 2012

Week in Review

Ruth Richardson was Finance Minister of New Zealand from 1990 until 1993.  During that time New Zealand reformed their public sector.  Something she believes Britain needs to do to help pull it out of its financial troubles.  And it probably wouldn’t be a bad thing for the U.S. to do either (see Want to reform government? Start with the Civil Service by Ruth Richardson posted 8/9/2012 on The Telegraph).

New Zealand underwent a radical reform of the public sector nearly three decades ago, [as] Minister of Finance I knew it was crucial to secure a results-driven and accountable public sector. The NZ public sector performance management system broke sharply with the bureaucratic norm…

The UK Government faces the same urgent imperatives that New Zealand did. A crippling fiscal position; an inefficient and unaccountable public sector; and a bureaucracy incapable of innovation…

I learned that success in government relies on ensuring that the forces of productivity and innovation, so crucial to lift private sector performance, must equally be allowed to make themselves felt in the ranks of the Civil Service.

New Zealand, like the UK, used to be burdened by a typical bureaucracy . The system served its own ends, behaved in a wasteful and unaccountable fashion and there was a complete disconnect between resources and results…

And so the public sector performance management system for which NZ has become renowned was instituted.

We introduced contracts between Ministers and the heads of government departments to focus them on our priorities. And to sharpen accountability we put these heads of departments onto fixed term contracts, rather than providing them with jobs for life. We then let these managers get on and manage their organisations.

We also radically changed the way the way we managed our budgets. We made departments account properly for their assets, so that they would value them better. We made them report their performance in a way that every citizen could understand. These changes were important in allowing us to monitor the performance of services, were central to holding heads of department to account and were crucial in the quest to do more with less in fiscally straightened circumstances…

It is hardly a surprise that the old guard – the unelected government with real staying power – are lining up to oppose reform. But their arguments are discredited by our experience in New Zealand…

The real crux of the matter is – why should civil servants have jobs for life? The real life “slumdog millionaire” from Mumbai, who wants to use his winnings to take India’s tough civil service exam so he can win a secure and prestigious lifetime job”, is so typical of the species and the problem. And why shouldn’t they be accountable for their performance?

Do more with less?  Accountability?  That’s crazy talk.  No wonder the career civil servants are fighting similar reform in Britain.  And in the U.S.  Why would they want that when they can have prestigious lifetime jobs?

In the U.S. they don’t call them civil servants anymore.  Not when they work for the federal government.  No.  Civil servant was too demeaning for their prestigious stations in life.  Now we call them federal workers.  The very sound of it elevates them above us.  The civil society they serve.

It is hard to initiate this type of reform, though.  Because the people who can initiate this reform are served well by these civil servants.  For the more people that work for government the more votes they will get.  As civil servants tend to vote for the people who want to expand government.  Not shrink it.  Because few people will vote themselves out of a job.

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