State Services Commissioner's Statement
14 November 2007.
http://www.ssc.govt.nz/sscers-statement

State Services Commissioner's Statement

Findings of the Inquiry into the Public Service Recruitment and Employment of Ms Madeleine Setchell

14 November 2007

SEE ALSO…
Report By DK Hunn To SSC - Main Body - PDF FORMAT
Annexures To DK Hunn Report - PDF FORMAT

In August I asked Mr Hunn to conduct an independent investigation of the Public Service's handling of their recruitment and employment processes relating to Madeleine Setchell. I also asked him to independently assess the performance of the State Services Commission and myself in these matters.

Working with the Solicitor-General, Mr Hunn has now completed that report. It is a thorough and methodical account of the facts of the matter and reaches considered conclusions. I would like to thank both Don Hunn and David Collins for their efforts.

It is now my responsibility to do three things. First, I need to draw lessons from these events as guidance for future behaviour by Public Servants. Second, I must determine my view of the performance of the three Chief Executives who were involved to various degrees. And third, I need to respond to the conclusions that Mr Hunn has arrived at about my own performance and that of the State Services Commission.

I will be very brief in outlining the lessons at this stage. They are explained more fully in my report, but they can be summarised as follows:

• Political views of Public Servants are generally not relevant to their employment - it is their behaviour that matters.

• All conflicts including political conflicts, must be managed; for a small number of public servants, any political alignments create conflict but there is nothing that places communication manager positions into any special category.

• Family connections are relevant, and these demand special sensitivity from employers - including ensuring that employment procedures only involve those who need to know about the situation.

• Ministers and senior officials must communicate freely, and that depends on continued confidentiality for open discussions, but the "no surprises" convention does not override a Chief Executive's responsibility to maintain discretion as a good employer.

• Sometimes severance payments may be a necessity to resolve a difficult situation, but public sector agencies ought generally ensure such settlements are not confidential; it is better to be open about such matters.

The events of this case remind us that standards and conventions need constant reinforcement. I will continue to ensure that opportunities are provided for public servants to absorb and discuss the conventions and guidelines relating to political neutrality in the public service and to relations between public servants and ministers.

Second, I have arrived at conclusions about the performance of the Public Service Chief Executives that have been involved in this matter.

But before discussing the performance of officials, I must first refer to the other person involved, Madeleine Setchell. I found that Ms Setchell has behaved entirely properly. She provided information about the potential conflict at appropriate times. It was not her fault that things did not turn out well.

With regard to the Ministry of Education, I conclude that the performance of the Ministry of Education was appropriate and accordingly I have no matters of concern to raise in respect of the Secretary of Education.

In relation to the Ministry of Agriculture and Forestry, I conclude that overall, the Chief Executive performed well in this matter but I do have reservations about the decision to consult the Minister. It was not strictly necessary for the Chief Executive to consult the Minister. With the benefit of hindsight, I conclude that the Chief Executive could have made his own decision and then informed the Minister.

This is not a substantial concern and I do not think that it amounts to a performance matter requiring any action from me.

The performance of the Secretary for the Environment raises several matters for consideration. First, though there has been widespread speculation suggesting that Mr Logan may have improperly sought to meet the Minister's political priorities while making employment decisions, there is no evidence of such behaviour. There is nothing in Mr Hunn's report that suggests that Mr Logan was in any way improperly influenced in his behaviours.

Second, though at the time I had reservations about his raising the matter with the Minister, I now conclude he had sufficient reason for that discussion. Following discussion with the Minister he arrived at his own conclusions, as he should.

Third, Mr Logan was entitled to take the apparent conflict into account and to seek to manage that conflict, but I am not convinced that it was inevitable that Ms Setchell must transfer from the position of Communications Manager to another job.

Fourth, overall the employment in the Ministry for the Environment of Ms Setchell and her subsequent separation were managed poorly. There was a confusion of roles and initially inadequate attention was given to a declared conflict. Once the conflict became apparent, the Ministry sought to resolve it quickly in a process during which Ms Setchell was not treated with appropriate sensitivity and she was not given adequate opportunity to explore options. Ms Setchell was entitled to expect fairer treatment from a good employer.

In addition to the other administrative matters relating to employment and severance, the Ministry entered into a settlement with Ms Setchell; the terms of the settlement included a confidentiality clause. I can see no special circumstances in this case serving to override the expectation that a public sector employer should act to preserve maximum transparency in such settlements. I consider it was a mistake to agree to confidentiality on this occasion.

The errors in the employment process are regrettable lapses and they add up to an unfortunate picture, but none of them represent a retreat from basic public service values.

That is not to say that this issue is of no consequence. Ms Setchell suffered significantly as a result of these management errors. The compensation payment to Ms Setchell was the agreed means of recompensing her loss. Though Mr Hunn has found that payment to be appropriate in the circumstances, the fact remains that one of the real consequences of a poorly managed process is the expenditure of taxpayers' money. Accordingly, I have decided that there will be a monetary consequence for Mr Logan through the operation of the annual performance management system.

Response from the State Services Commissioner to Mr Hunn's finding in respect of SSC and the State Services Commissioner

Mr Hunn has made a number of findings in relation to the State Services Commission. I accept them all. Mr Hunn notes that the direction that I proposed that the Ministry for the Environment should follow was "comprehensive, cogent and correct". He notes as well, however, that though the follow up to this advice was the legal responsibility of the Chief Executive, the SSC could have been more effective in remaining close to the issue and influencing events more positively. He identifies a number of particular processes that could have been more robust.

I accept all those concerns and they provide a helpful list of opportunities for improvement. I have already met with the SSC Senior Management Team and we have determined that we will address all those issues in the coming months. All of them are already within our work programme to continue to improve the performance management role of the SSC and our internal information systems.

I accept full responsibility for the matters that Mr Hunn has raised. I do not consider that there is any particular performance failure demonstrated by individual staff within the commission which would require a performance response.

Turning to my personal performance, I accept Mr Hunn's conclusion that I made an error in failing to ensure that the appropriate members of staff in SSC were aware of all the information that had been conveyed to me by Mr Logan. This, combined with my later forgetting the information about the discussion with the Minister, means I am responsible for some of the confusion that followed during July. I regret those mistakes. They do not reflect the standards that I seek to maintain while holding this office.

None of us are beyond accountability for our actions.

Accordingly, I have decided to act as closely as I can to what I would require of other Chief Executives in similar circumstances. I have consulted with senior colleagues; they agree that in similar circumstances with another Chief Executive I would impose a penalty of around 2.5% of salary. I see no reason why I should be exempt from my own standards, so I have made a payment to our departmental Chief Financial Officer which is equivalent to a deduction of 2.5% from my annual salary.

However, that cannot be the end of the matter. In addition to my own processes, Ministers will make their assessment. That is because under the law while it is only parliament that can remove a State Services Commissioner, only Ministers can initiate such action. Just as it falls to me to determine whether the performance of Chief Executives is good enough, so it falls to Ministers to judge my performance.

I consider it reasonable that Ministers should hold me to very high standards. If Ministers, on considering this matter, believe that I should stay in the job I will continue to serve. If Ministers have lost confidence in my performance, I will leave.

ENDS

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