Commission fiddles while its cred burns

9 April 2012: The convention that public servants remain neutral exists for a good reason. If next month’s Budget likely features even more belt tightening than earlier expected, there is one taxpayer-funded agency whose funding could surely go under the knife.

Such is the State Services Commission’s seeming indifference to the slow politicisation of the public service, it would be barely missed were it to be folded into some other body with a monitoring role such as the Treasury or the Prime Minister’s Department.

As the public service’s guardian against undue influence from outsiders, the commission is more lapdog than watchdog. It rarely barks, let alone bites.

Its seeming reluctance to say or do anything to bolster public confidence in public service independence and neutrality in the face of increasing erosion of those ideals by politicians was underlined this week by the contrasting willingness of  Lyn Provost to dive into the turbulent political waters surrounding the ACC.

The commission has instead stood idly by as politicians have become ever more brazen in exploiting the gaping holes in the State Sector Act.

This legislation, which comes under the commission’s purview, has always had a major flaw.

The greater freedom granted to chief executives in the running of their departments blurred the lines of accountability which once made ministers fully answerable to Parliament for everything that happened in those departments.

As amply demonstrated by Murray McCully’s interference in the botched restructuring of the Ministry of Foreign Affairs and Trade, ministers are no longer coy about sheeting home the blame to officials when things go wrong in their department.

The commission – more particularly Iain Rennie, the State Services Commissioner – cannot be agnostic about the shambles at that ministry. Rennie must be concerned about the unprecedented leaks of confidential material which have sought to embarrass both the ministry’s chief executive, John Allen, and the minister.

By the same token, Rennie has to be worried that such guerrilla warfare is not only a measure of the dreadful state of employer-employee relations at the ministry, but a fair indication of how low morale has fallen across the whole public service.

Neither can he ignore the manner in which Allen has been hung out to dry by McCully. Allen was appointed as chief executive to bring private sector efficiency to the ministry’s operations. Allen delivered – in spades.

When the scale of the backlash from staff became apparent, McCully wrote a letter to Allen in which he laid out how he wanted the ministry reconfigured, while at the same time stressing that the State Sector Act forbade him from telling Allen what he ought to do. Talk about trying to have it both ways.

Other ministers have refused point-blank to comment on restructuring exercises within their ministries. That may have made them look indifferent and even callous in the face of redundancies. But it ensured the authority of their chief executives was not undermined.

Allen’s authority has been almost destroyed by McCully’s wild swings between being hands-off and hands-on. Yet, at the same time, McCully could hardly sit back and watch diplomats with years of experience walk out the door.

If there is a lesson from this debacle it is that private sector practices do not necessarily sit comfortably alongside public service norms.

Distancing by ministers from the actions of their officials took hold during the last Labour government. It has flourished during National’s occupation of the Beehive. It is becoming the increasing habit of ministers to leave bad news announcements to their ministries.

Likewise, it is increasingly falling on officials to carry the can when things go wrong because of bad policy choices by ministers. The politicians hide behind the State Sector Act claiming they cannot intervene in so-called “operational matters”, even though such matters flow directly from policies determined by them.

By way of example, it is a pretty safe bet that when the ongoing cuts in departmental budgets really start to bite with cuts in services, chief executives will be in the gun – not ministers.

The latter will be able to thank Bill English who imposed the freeze on budgets but cleverly left it to chief executives to find the savings from within those budgets to ensure basic functions are kept running.

The search for savings means departments are implicitly making political decisions as to what to cut and by how much. The public service’s most valuable asset – political neutrality – is consequently at grave risk of being devalued.

The State Services Commission’s website gives the impression that it regards political neutrality as something akin to what was chiselled on Moses’ tablets of stone.

However, the commission is also part of a troika of “lead agencies” alongside the Treasury and the Prime Minister’s Department which is driving the quest for so-called “efficiencies” in state sector operations. This seems to have blinkered the commission.

One of the unintended side-effects of the State Sector Act has been to force senior public servants into the limelight by making them defend their decisions. That can make them look like they are defending their ministers’ political decisions. This has now been taken a huge step further with the head of the Treasury, Gabriel Makhlouf, going in to bat for Government policy.

In raising such issues as the size of school classes, teacher performance, the usefulness of national standards in primary schools in producing education data, and the desirability of GST not being undermined by a host of exemptions, he was no doubt trying to stimulate debate.

There is a vast difference, however, between giving the best possible advice on all the options and publicly advocating a particular course of action.

Rennie should be blunt. If Makhlouf wants to be a politician he should resign and roll up at election-time with his $300 deposit like every other would-be aspirant for political office. Otherwise he should be told to button his lip. But don’t hold your breath for that to happen.

By John Armstrong
NZ Herald’s chief political commentator

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