State Services Minister Simon Upton has announced a major change of direction for the State Services Commission. The announcement is the key element of a major re-assessment of monitoring within the core public sector that has already seen new arrangements put in place for monitoring Crown Entities.

The new focus will see the Commission charged with becoming a principal adviser to Ministers on the health and capability of core government departments.

"The changes will require the Commission to upgrade significantly its ability to provide forward-looking, pro-active advice on the ability of government departments to deliver," said Mr Upton.

"They are designed to arm Ministers with the information they need to hold Chief Executives to account for their stewardship of taxpayers' resources. In turn, Ministers will have to devote more attention to the 'ownership' side of their portfolios."

Mr Upton said that the new mandate for the Commission would redress an imbalance that had been diagnosed since the radical reforms of the public sector began 15 years ago. [The attached excerpts from key commentators describe the problem].

"The severe fiscal crisis of the late 1980s properly focussed the attention of ministers on gaining control of public expenditure - the so-called purchase side of the equation. As a result, New Zealand politicians probably know more than any other country about what they get for the money they spend and how trade-offs between priorities are made. It has provided us with an indispensable and formidable control over public expenditure."

"But Ministers have been much less well-informed about the health of the ministries they deal with. While Ministers labour over purchase agreements, knowledge about the ability of departments to deliver is left almost entirely in the hands of Chief Executives."

"It is time that Ministers were put in a position to seek these assurances."

Mr Upton said that since becoming State Services Minister, he had been increasingly concerned by the focus of the monitoring undertaken by the SSC. It had tended to provide a rear vision mirror view of departmental performance rather than what the future might hold.

"What Parliament and the public needs is an assurance that government departments will be able to deliver in the future and that proper attention is being paid to non-financial matters such as skills, information technology management and ethics.

"Moving to a forward looking monitoring regime will require a radical shift in the commission's focus."

Mr Upton stressed that the new direction for the Commission did not mean a return to the old days when the SSC was a controlling central agency that meddled in day to day management decisions.

"Chief Executives have to be left to manage and any suggestion that the Commission should be trying to second guess them would lead to muddle and confused accountabilities. What we are seeking to do is ensure that Ministers, on behalf of the 'owners' (the people of New Zealand), can ask the sort of questions any concerned owner would want to ask. Ministers can't do that if they don't have high quality advice. The Commission has to provide it."

"It is surely strange that, currently, there are much more formal arrangements for monitoring the Government's ownership interest in State Owned Enterprises (SOEs) than we do for government departments. Boards are appointed explicitly to monitor the Crown's ownership interest in these companies. Recent announcements have extended this approach to the governance of Crown Entities. Government departments are every bit as important as Crown Entities and SOEs. Ensuring that they can deliver requires a fresh focus from the SSC and from Ministers."

Mr Upton said that he had been working with the SSC on the changes over an 18 month period and that the new focus had been welcomed by the Commissioner. Change would not occur over night but be achieved over a 3 year period as the skills were assembled.

"It is up to the Commission to prove that it can develop a dynamic, up-to-date approach to monitoring the quality of public sector management. Ministers are ready and willing to play their part."

Mr Upton said that the new focus did not cut across any of the Commission's statutory responsibilities. Nor did it affect the role of the Department of Prime Minister & Cabinet (as the Government's strategic adviser) or the Treasury (as the Government's principal financial adviser).

ENDS

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