Changes in structural design in the New Zealand social services sector.

AuthorWhitcombe, Judy
PositionReport

Abstract

Reform and reorganisation of the New Zealand public sector have been ongoing since the 1980s, resulting in changes to the structural design of public sector agencies. The belief that providers of services, bureaucrats and professionals were capturing the policy process influenced the separation of policy ministries from operational departments. The impact of those changes on the social sector throughout the 1990s was profound. Ministers expressed concerns about the quality of the policy advice they were receiving. The initiatives developed in the Ministry of Social Policy encountered implementation difficulties, which meant that unspent funding for social policy initiatives was carried forward from year to year. After 1999 a Labour-led government adopted an approach aimed at reunifying the social sector and addressing the problems of fragmentation and "siloisation", which were identified in the Review of the Centre by the Ministerial Advisory Group. The result has been a re-coupling of policy and operational agencies across the social services sector, with the Ministry of Social Development now the largest government department.

INTRODUCTION

The structural changes that have taken place under the public sector reform process in New Zealand are linked to changes that have taken place worldwide to modernise the public sector and improve its performance. In New Zealand the reform process involved the removal of business functions from the public sector to create state-owned enterprises, and a review of the operations of the core public sector to establish a clear focus for government agencies.

This paper focuses on the successive changes that have occurred in the structure of social service departments and the logic behind the changes that have taken place under different governments since the initial separation of policy ministries and operational departments. The changes reflect the perspectives of the various governments and key ministers within those governments. The decoupling of policy and operations in the social sector that went on during the 1990s resulted in concerns about the quality of the policy advice the Government was receiving and the problems that were becoming apparent with the implementation of policy initiatives.

BACKGROUND

The most appropriate environment for the development of robust social policy has exercised governments, ministers, academics and government agencies over the years. These issues were considered by the New Zealand Planning Council (2) in their 1982 report Who Makes Social Policy? At that time, the Planning Council had been accused of giving more weight to economic rather than to social issues. The report identified the Cabinet Committee on Family and Social Affairs as having the function of shaping social policy at the highest level. Although the Planning Council's report reviewed the other participants in the development of social policy, its comments on the overall organisation of policy development are most relevant to the situation in the 21st century.

The report noted that there was a "compartmentalised approach" to social policy and that competition between departments, and defensive attitudes, underlay the very fragmented approach to social planning in New Zealand. Greater interdepartmental cooperation in the exchange of information and in research efforts, which would recognise the interrelationships and interdependence, was suggested. The report's conclusion addressed structural issues and noted that attempts in the past to improve coordination between departments had gone as far as amalgamating departments or parts of departments, but then asked "would any improvement be gained from creating a joint Health-Education-Social Welfare department?" (New Zealand Planning Council 1982:48). A more coordinated approach was seen as being essential for the development of social policy over the longer term. This message was subsequently echoed in the Review of the Centre (2001) report.

The need to separate policy advice from operational activity was first outlined in Government Management (Treasury 1987). The public management system at that time was criticised for not providing government with high-quality policy advice. Conflicting objectives arose when advice and implementation occurred within one organisation. The phenomenon of "producer capture" was also identified. Because government required advice to enable it to assess the most appropriate intervention, doubt was expressed that the agency involved in the provision of advice would be impartial if it were also involved in the delivery of services. Ministers needed contestable policy advice from a variety of sources. The decoupling of policy ministries from operational departments followed progressively.

Structural reform proceeded throughout the 1980s and 1990s. The creation of state-owned enterprises, through the State Owned Enterprises Act 1986, was followed by environmental and conservation restructuring in 1986/87, and then restructuring of the Ministry of Research, Science and Technology in 1989 with the establishment of Crown Research Institutes. Agencies established in the 1990s included the Department of Prime Minister and Cabinet and the Ministry of Maori Development, Te Puni Kokiri. In the social (3) sector, changes commenced in 1989, starting with the separation of the Department of Education and proceeding through Housing, Justice and Social Welfare in the 1990s. The last department to be established was the Department of Child, Youth and Family Services in October 1999.

CONCERNS ABOUT THE QUALITY OF POLICY ADVICE

The passing of the State Sector Act in 1988, the Public Finance Act in 1989 and the consequent managerial reforms resulted in a period when departments and governments were focused on achieving efficiency and effectiveness. However, after the first flush of freedom and excitement, Ministers began to concentrate on the quality of the advice they were receiving. In 1991 the Minister of State Services, Hon W. Birch, directed the State Services Commission to review the purchase of policy advice. He wanted to achieve a permanent improvement in the cost-effectiveness of advice (State Services Commission 1992).

In March 1997 the then Minister of State Services, Hon. Jenny Shipley, also expressed concerns about aspects of the advice being received. The Minister commented on the inability of the public service to clearly define the outcomes the Government sought to achieve and to put forward sound policy solutions for the Government's consideration; the inadequate human resource capability in some departmental policy units; and the lack of attention to implementation issues. The Minister and the State Services Commissioner agreed to initiate a project that would investigate how the quality of policy advice could be improved. The project (4) identified five contributing factors:

  1. lack of clarity in Ministers' statements about desired outcomes

  2. insufficient incentives for active cooperation by departmental chief executives

  3. significant variation in standards of leadership, and in the performance of policy units

  4. substantial under-investment in capability development- in the past and currently

  5. significantly inadequate and/or ineffective use of information, research, evaluation and consultation techniques as inputs to policy development.

The first two...

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