Public Service Commissioner Peter Hughes

The Public Service Commissioner has set out to defend the public service as we head to an election where National has signalled it wants to make the service an issue.

The Commissioner, Peter Hughes, in an appearance before Parliament’s Governance and Administration Committee last week, said he had deliberately chosen to time his first report on the state of the public service in the middle of the government’s term “so that going into the election, everybody’s got information about the state of the public service which is key to effective government.

The report was the first presented under the new 2020 Public Service Act, which requires that the Commissioner submit the report every three years.

He would have already encountered National MPs at Select Committees picking up the call from National Leader Christopher Luxon to cut government spending by scrapping some of the 14,000 new roles that have been created in the core public service since 2017.

Hughes quoted from a sheaf of European reports which showed the New Zealand public service ranked high (generally within the top five) internationally in terms of trust, democracy and effectiveness.

“The OECD look at the relative cost-effectiveness of public services around the world, and in terms of per capita costs, we were one of the leanest public services,” he said.

“Our per capita cost is around 18,000 US dollars; if you look at Denmark, it’s at $30,000; Norway,35,000; Australia, 22,000; Great Britain, 20,000.

“The OECD average is 20,000, so that’s a bit of an efficiency lens, so we do rank reasonably well.”

However, that cost-effectiveness may have partly come by keeping public servants pay down.

“What I’ve seen, not so much in Wellington, but certainly in the regions, is what I call the poaching of our public servants, and it’s quite chronic,” said Committee chair, National MP Ian McKelvie.

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“You just referred to the cheapest public service in the world. Is that costing us?”

Hughes said that right across the economy, there were tight labour markets, so staff turnover across the public service was currently high, 18 per cent against a more usual 12 per cent.

“We recently revised pay guidance for the public service, which will loosen constraints that have been on public service pay, particularly at the middle and senior levels that I think will help with this,” he said.

“But at the end of the day, if you’re in a competitive market, it’s a bidding war, and some people will just keep on bidding, and there’s a limit to which we can do that in the public service.”

However, the Commissioner said most people in the public service were there for more than just their pay.

“I think public servants, by and large, are highly intrinsically motivated,” he said.

“They do the work because the work aligns with their values and allows them to make a contribution back to the community, and so they will accept generally lower pay.

“This happens all the time.

“Public Service chief executive pay is operating at a discount of between 50 and 60% on equivalently sized jobs in the private sector.

“But there is a level at which you are trading on people’s goodwill and where pay becomes a factor.”

But not everybody in the public service might find their job rewarding.

“I would say from my experience of public servants is they will come and work for you as a public service employee for two reasons; if you’re doing stuff that makes a difference,” he said.

“If you’re running a government department that’s not actually doing a heck of a lot, you won’t get the best people to come and work.

“But if you’re doing a big program of work, like climate change or criminal justice, law reform or whatever, It’s a huge motivator.”

The new public service legislation in 2020, which was the product of Hughes and his-then Minister, Chris Hipkins, offers a number of radically different opportunities to the public service, particularly in terms of breaking down the rigid walls that have tended to divide departments off from each other and Wellington off from the rest of the country.

One of these has been the ability to appoint regional public service commissioners.

“These are senior public servants that have a mandate to convene all of the heads of government agencies at a regional level, said Hughes.

He believes the model can go further than simply being a vehicle to coordinate government agencies within a region. Perhaps learning a lesson from Whanau Ora, the Commissioner believes these new structures could allow the bulk funding of government activities within a region.

In Tairawhiti, there is a Regional Public Service commissioner,” he said.

“There’s actually a board made up of the heads of the agencies iwi, local government and some NGOs.

“We’re able to bring all that together at the regional level.

“This is a model which I think has huge potential, and we need to power it up as we go forward.

“Once we’ve done that, we can then allow regional public service commissioners in those boards of agencies more decision-making at the regional level.

“So, for example, if you look at an area like Gisborne, there is a truckload of government money going into the region but largely through individual government programs coming out of the individual government agencies.

“I really believe that if we allowed some of that money to be bulked up and allowed the local people some decision-making over that money, they could potentially achieve better outcomes than the programs can. “

That is not something that could easily happen in the short term. The way money is appropriated in the Budget does not easily allow for bulk funding, nor does it allow for funding to be spread across votes.

Hughes said the first thing to do was get the administrative structures in place in the regions.

“I think the first thing is to build the system and then shift decision-making towards that,” he said.

However, Hughes’ critics are not only in the National Party.

In a post last week on The Pundit blog, the left-wing economist and long-time Wellington gadfly Brian Easton has argued that the public service is suffering from the downgrading of the role of professionals, experts and those at the workface with the public.

“Such is the culture of generic management that, having botched one job, the manager goes onto the next,” he wrote.

“They seem immune to the Peter Principle that one rises to one’s level of incompetence, for in many cases, they continue to rise.

“It seems that one’s position rather than one’s performance is the criterion of success.

“Apparently, no one in the management team is ever responsible, in contrast to professionalism, where personal responsibility is integral.

“This lack of responsibility may be the reason why there is so much inertia, as a problem is moved from desk to desk rather than dealt with.

“At best, things get lost in committees and garrulous do-nothing reports.”

Hughes is not due to report again for what will be his last report as Commissioner until 2026. Perhaps he might address Easton’s concerns then.