PART 1: Annual Report of the State Services Commissioner
Over the period covered by this Annual Report a major focus for the State Services Commission (SSC) was making progress towards the achievement of the Development Goals for the State Services. The first section of this essay details the SSC's work to establish a common framework of understanding in relation to the goals and the launch of benchmarking research.
Secondly, this essay looks at trust issues arising in the State Services. These include an opportunity to unify the State Services with common standards of integrity and conduct, two major reviews undertaken by SSC and guidance for public servants appearing before select committees.
In March 2005 the Government agreed an ambitious set of Development Goals for the State Services. As detailed in last year's Annual Report, the goals provide a framework for delivering the next generation of State Services.
The ideas behind these goals are not new, but, by making them clear and visible, and by setting progress milestones for 2007 and 2010, a clear agenda has been set.
The Development Goals are not intended to outline what outcomes the State Services will achieve as that is a matter for Government policy. Rather, the goals are aspirations for how the State Services will go about its work.
Achieving the Development Goals will need the momentum and support of State servants across the whole State Services. Transformation of the way State servants see and undertake their diverse roles, the way agencies design and deliver services and the way systems and networks are structured will present many challenges. These solutions will only be possible if State servants engage with the challenges collectively. The role of State Services chief executives and chairs of Crown entity boards is to lead in a way that will achieve the Development Goals.
However, the responsibility for driving the programme, including developing a means of monitoring progress towards the goals, lies with the SSC.
It is only by making improvements where needed, and by rigorously monitoring progress towards the Development Goals, that we will be able to deliver on the overall goal of "a system of world class professional State Services, serving the government of the day and meeting the needs of New Zealanders".
During the year in review, the SSC launched the State of the Development Goals Report 20061. This report is an attempt to establish a platform for understanding performance across the State Services and will be used to monitor progress in relation to the Development Goals.
The State of the Development Goals Report2006 has two main purposes. The first is to describe what the State Services might look like when the goals have been achieved. The second is to introduce an initial set of indicators for measuring progress towards achieving the goals and their associated milestones.
It is expected that the reporting methods and indicators will be refined over time. Future reports will help identify key issues and areas where action is needed to maintain momentum on the Development Goals programme.
The report is addressed to those working in the State Services, but it also enables New Zealanders generally to understand how well the State Services is performing.
It provides a guide to good practice in the State Services and is one of the tools that can be used to identify areas for system improvements. It is important that good practice in our sector is acknowledged so that it can become more widespread.
Similarly, we need to ensure that the areas identified as requiring improvement are prioritised and managed effectively and efficiently. We also need to make sure that lessons learned are shared with each other to promote increased effectiveness and to contribute to our growing understanding of good practice.
To accomplish, this we will need to work together more effectively. At times, this will require us to make decisions that are in the interests of the State Services, above those interests of our individual agencies. This will necessitate a broadening of our strategic vision and of our concepts of leadership, and trusting in each other's ability to lead and to deliver that vision.
The six Development Goals support each other and collectively contribute towards strengthening the degree of trust New Zealanders have in the State Services. Improving trust is an ultimate outcome, as well as being the sixth goal.
Amendments to the State Sector Act extended the scope of my integrity and conduct mandate, signalling the Government's focus on the importance of trust in the State Services. This important change enables me to set minimum standards of integrity and conduct for many of the agencies that make up the State Services, and to apply those standards by issuing a code or codes of conduct.
Before making any decision on the appropriateness of issuing a code, the SSC undertook a comprehensive engagement programme with Crown entities. This programme identified integrity provisions already in place in agencies, and explored whether setting additional standards may contribute to increased trust in government and confidence in the State Services. The discussion document
Integrity and Conduct - Setting Standards for Crown Entities2 outlines the issues that the SSC explored with Crown entities.
Based on information collected during this engagement, I have now decided to develop a single code of conduct for State servants. The code will apply to employees of Public Service departments, and to Crown entities (120 agencies in all) but exclude School Boards of Trustees, Crown Research Institutes and Tertiary Education Institutions. It will not apply to Crown entity boards, as the engagement process found that specific integrity obligations already in place meant that the setting of additional standards was not necessary. Setting shared standards will build a unifying sense of values across the State Services; meeting those standards will strengthen trust in the State Services and reinforce the spirit of service.
The standards are likely to be aspirational in character. The code will provide flexibility for agencies to develop policies relevant to their roles and cultures that detail the requirements for their employees. This recognises that agencies operate in varying environments.
To ensure the code is relevant to employees in a large and diverse workforce, stakeholders have taken part in the development process. Qualitative research has been conducted with State servants and members of the public to identify values and standards of behaviour expected of State servants. This research included focus groups and an online questionnaire. Further testing with State servants and stakeholders, including focus groups, will help to refine the new standards. The target for introducing the unifying code is June 2007.
During the year, SSC undertook two independent investigations at the request of the Government, involving different aspects of trust in the State Services. Carrying out independent reviews into specific State sector issues is an important aspect of the SSC's 'business as usual' work; it also contributes towards the goal of improving New Zealanders' trust in agencies of the State Services.
The first inquiry was into the cost escalation of the Department of Correction's Regional Prisons Development Project. Some public commentary on this issue had indicated a concern that one or more individuals involved with the project had manipulated the process for their own advantage.
The SSC did not find any evidence of wrong-doing or deliberate actions for personal gain. The report outlines how an increase in required prisoner beds led to an intense focus on delivering the new prisons on time. It was impressive that the Department delivered on such a tight timetable, but it came at a cost.
The review found that several intertwined factors led to the apparent price increasing by $140.8 million when compared to the estimates presented as part of the Budget 2005. These factors were market influences, consent and regulatory changes, design finalisation and infrastructure costs. In addition, for such a major project, the nature and level of the departmental reporting to Ministers was not adequate at times and did not sufficiently signal the fiscal risks to the Crown. The project management lessons learned from this review have now been shared with other government agencies.
The second inquiry initiated during the year in review was into the leak of a New Zealand Government Cabinet Paper to Telecom new Zealand Ltd. My inquiry found that the Cabinet paper was taken by Michael Ryan, a messenger employed by the Department of the Prime Minister and Cabinet during the course of his normal work, and was given to an employee of Telecom. The investigation found that Mr Ryan acted alone. He took a paper that it was his job to handle and abused the trust given to him by passing it to someone who ought not to have been given it.
The actions of one individual had the effect of casting suspicion on many agencies and many public servants. I was therefore pleased to be able to get a quick result in this inquiry as this was a matter of intense public interest involving an unprecedented leak of sensitive Budget information.
The last matter arising during the year that I wish to briefly comment on involves State servants appearing before select committees. An important component of the goal of strengthening trust and reinforcing the spirit of service is ensuring respect for the institutions of democratic government and the people who serve in them. This encompasses both respect for Parliament and the political neutrality of public servants appearing before its committees.
The appearance of the chief executive of Television New Zealand before the Finance and Expenditure Select Committee on 7 and 14 December 2005 and consequences of his comments, have focused attention on the exact nature of the role of State servants appearing before select committees, and sparked an investigation by the Privileges Select Committee.
I believe the standards and guidance contained in the Public Service Code of Conduct3 and Public Servants and Select Committees Guidelines4 set out clearly what is expected of public servants appearing before select committees. Although not directly applicable to employees in Crown entities, they reflect the long-standing traditions of good faith, loyalty and political neutrality of those working for the Government. The implications of not following them can be complex and could include loss of credibility, reputation and the confidence of the agency and Minister. Currently, the Code standards and guidelines do not apply to State servants beyond the Public Service, although they are a good general yardstick to follow.
There is tension between Parliamentary requirements in respect of State servants' interactions with select committees, and expectations of State servants' political neutrality and their ability to serve the government of the day and successive governments. Professionalism, mutual respect, preventative action on the part of Committee chairs and chief executives, and forbearance seem to me to be reasonable approaches to navigating potential conflicts.
I will also be considering whether the Public Servants and Select Committees Guidelines needs to be revised, in light of the Privileges' Committee's report and the code of conduct that I am developing for the State Services.
This is an exciting and challenging time for the State Services and it demands the best of all our efforts. The challenge is to build on our foundations and to continue to strive towards the overall goal of a system of world class, professional State Services, serving the government of the day and meeting the needs of all New Zealanders.
Consistent with advancing the Development Goals, each Public Service chief executive has prepared their own plan for how they will use the framework to achieve better outcomes in their agency or sector.
There is no doubt that there are significant challenges in achieving successful outcomes. The framework is intended to support more widespread adoption of effective and efficient ways of working, consistent with the Government's drive for better coordination and unity across the State Services.
Overall, I am encouraged by the progress that we have made to date and I am also determined that we continue working together to collectively lift the performance of the State Services.
Lastly, I would like to record a farewell the Deputy State Services Commissioner, Tony Hartevelt, who will step down from this role in early 2007. Tony has been an integral part of the SSC leadership team for five years. His superb relationship management skills, his deep understanding of the State's relationship with the wider business community, and his commitment to and enthusiasm for a more effective and unified State Services will be missed by SSC staff and by senior colleagues in the Public Service.
State Services Commissioner
1 State of the Development Goals 2006 (SSC, 2006)
3 Public Service Code of Conduct (SSC 2005)
4 Public Servants and Select Committees Guidelines (SSC 2005)