Beyond Rankin: two huge policy changes

Christine Rankin was the small beer. The pre-Easter manoeuvre that wrote her out of the government’s script marks two very big policy changes.

One is the reversal of a central principle of the 1988 state sector reforms.

The second is the flagging of a “social equivalent of the Treasury”, testing all policy against social criteria the way the Treasury does against fiscal and economic criteria.

The government had long flagged — though with little vigour and less analysis — some rationalisation of the 39 departments. This was in line with the thinking of a number of comentators and of former State Services Commissioner Don Hunn’s.

“Fragmentation”, as it has been code-worded, has walled up state servants in silos and rendered some departments too small and too isolated to do their jobs adequately. There are also around 200 Crown entities, not counting schools, many of which could be incorporated into departments.

When Associate State Services Minister Margaret Wilson produced a bill late last year designed to rationalise Crown entity governance, Helen Clark took an interest. Confronted also with the Christine Rankin reappointment issue in December, she stalled the bill and then detailed State Services Minister Trevor Mallard to develop a process by which the government could set about a major rationalisation over time across the whole state sector.

The Labour/Alliance cabinet wants “whole-of-government” or “joined-up government”. The amalgamation of the Ministry of Social Policy (MSP) and the Department of Work and Income (DWI) is a first step.

That is unremarkable. But the direction that step sets the government on is.

At the heart of the 1988 reforms was the separation of policy advice from regulation and delivery of services. This was intended to — and did — sharpen managers’ focus, produce efficiencies and improve effectiveness.

If the number of departments is to be reduced, the 1988 principles would suggest building bigger policy departments, bigger regulatory agencies and bigger service delivery units. Indeed, Roger Sowry, as National’s Social Services Minister, had aimed to build the Ministry of Social Policy into a major multi-portfolio policy agency incorporating not just social welfare and housing, which he achieved, but health and labour, among others.

The Clark government, however, has chosen to amalgamate departments by policy area. Mr Mallard called the pre-Easter MSP-DWI amalgamation only a small initiative, involving minimal disruption. But, ministers affirm privately, it casts the die by which any future amalgamations will take place.

This is a major departure from the 1988 principles — and done almost by sleight of hand. The move, acknowledged and indeed championed by Social Services Minister Steve Maharey, who demanded of Mr Mallard that the MSP-DWI merger be done only in the context of a strategy for the state sector as a whole, only becomes evident from a close reading of the ministerial papers.

The move is all the more remarkable, since it has been done without — or at most with minimal — advice from officials. This is major policymaking by amateurs, namely politicians.

A measure of the risks in such back-of-the-envelope policymaking was in a little report before Christmas by the Ministry of Economic Development on the government’s election promise to reimpose temporary parallel importing bans on CDS, software, films and books. The ministry found no evidence of harm to anyone from the removal of the bans in 1998, some evidence of better access to expensive periodicals by university libraries and no evidence that reimposition of the bans would achieve the government’s objectives.
But wait, there’s more.

Mr Maharey was not just battling Mr Mallard on a context within which to situate the MSP-DWI merger. He fought tooth and nail for — and got — major insertions into the job description of the chief executive of the merged entity.

These insertions effectively disqualify Ms Rankin, though an able operational manager, because the new role goes far beyond her qualifications.

The clue is in the name of the new entity: the Ministry of Social Development (MSD). Mr Maharey stated in his letters to Trevor Mallard that he wants a department that will be the social equivalent to Jim Anderton’s Ministry of Economic Development.

He got written into the new CEO’s job description a section committing the government to grow the MSD “to become the government’s primary adviser on strategic and cross-sector social policy”. The MSD will over time “provide evidence-based advice on social wellbeing, on the causes of and responses to social problems and on the effectiveness of government programmes across all social policy areas, including education, health, housing and justice”.

The job description requires a paragon who can think “strategically and analytically about the government’s roles in relation to social policies and the delivery of services”. This extraordinary individual “must demonstrate the analytical and conceptual skills to lead and advance debate” on social wellbeing, policy responses and auditing social policy generally and “to lead production of timely, innovative, relevant and intellectually rigorous policy advice integrating the broad range of social policies”.

It is almost certain that the government will not pay enough to get this intellectual and managerial Hercules. As a useful adjunct, Ms Rankin’s capabilities fall far short. State Services Commissioner Michael Wintringham said as much in his letter of December 18 to Ms Clark.

Just what Mr Maharey is driving at becomes clearer from a reading of a report he commissioned in September from Paul Duignan and Bob Stephens and which reached draft form, available to inform the argument over the job description, only in February (published on 12 April).

This report looks to the development of the old MSP (soon-to-be-MSD) into a “policy analysis and ‘ideas’ factory” able to undertake a “medium/long-term policy alignment/coordination role”. This is jargon for pulling all social policy into a consistent long-term framework.

At the moment health, education, housing, justice, social security and social services policy are all developed independently, using different assumptions and analytical frameworks — and so heading towards potentially different and even conflicting social outcomes. Mr Maharey’s intended superministry will establish the framework to which all these agencies will eventually work — much as the Treasury has established the economic framework within which all economic agencies work.

In fact, he began work on this last year, with the establishment of a still fledgling strategic social policy group inside MSP. (Incidentally, the cabinet took housing policy out of MSP, in keeping with its portfolio approach to state sector organisation).

The Duignan-Stephens report goes even further. “Achieving social participation and equity [the social policy objective they were set by Mr Maharey] is likely to require action in all policy sectors,” they say. “This includes . . . economic policy areas and the work of economic policy agencies such as fiscal policy, taxation, labour market regulation and economic development. . . People do not differentiate whether outcomes derive from the social or economic sphere as long as they and their communities get what they need.”

They even provide an economic justification: “Social participation and equity is an important contributor to economic growth.”

So Duignan and Stephens see the MSP (soon-to-be-MSD) as “defining and monitoring desirable societal outcomes” and “planning, developing, implementing and evaluating social and economic policies and programmes aimed at these objectives and monitoring their success”.

This would need, they say, to take account of social diversity and “encourage intersectoral collaboration and wider community involvement”.

All this is right up Mr Maharey’s alley. And it is miles bigger than Ms Rankin.