The next ambition in the public service revamp

A third-term government risks slipping into torpor and/or pothole-filling. Not the Key-English show.

Potholes have proliferated in the first 12 months of its third term: think of Nathan Guy (kauri logs), Sam Lotu-IIga (Serco), Nick Smith (iwi and housing land) — even John Key (ponytails, refugees, Saudi corporate beneficiary).

Filling potholes takes time and energy. Some ministers have got fractious with officials and each other. Positioning to succeed Key adds an edge.

But by and large the cabinet is not as fractious as some in a third term — think 1967, 1982, 1997. There is no torpor.

That is partly because Key frequently refreshes his team. Chronologically or politically ageing ministers are moved on to the retirement village in the political sky.

Some ministers who are not quite ready for the rest-home have action plans. One is Bill English.

A pointer was the Productivity Commission’s report last week on “more effective social services”, which English — not the then Social Development Minister, Paula Bennett — commissioned, with the then State Services Minister, Jonathan Coleman, in tow.

It has been English who has invited, then driven, new social services approaches. One is the “forward liability investment approach”, which started with benefits and is to be applied in social housing, education and criminal justice.

As noted here in the past, the Ministry of Social Development’s version aims to avoid a future liability, so is more like insurance, as in the accident compensation system whence it came. It is not focused on building assets. That is, it is not real investment.

The Productivity Commission essentially agreed: it recommended refinement “to better reflect the wider costs and benefits of interventions”. That “would improve the alignment between decisions based on an investment approach and those offering the highest social return on investment”.

By “social return”, the commission meant the return to the whole country, not just the government. There is logic in that: the government belongs to, and is the agent of, the whole country, not just ministers and officials.

English is unlikely to go down the “social return” track.

But the commission did explore a track English has itched to go down. He wants tighter focus on the most difficult cases. Solving them, he thinks, will yield the highest fiscal gain over time.

The commission distilled four categories of people who draw on social services.

Of those with “straightforward” needs, “self-referral” people could themselves sort what they needed if the delivery agencies had a strong customer focus while “cross-referral” people needed help coordinating the services (as in education and health) they used.

Then there were two categories of people with complex needs, involving more than one agency. One category — “the client as navigator” — could coordinate the services they needed, that is, navigate the agency systems themselves with the right help or “empowerment”. The other — “navigator as integrator” — needed active guidance and help to navigate the systems to get needs met.

All very well except for the often counterproductive and over-legalistic contracts which over-risk-averse officials impose on the thousands of non-government deliverers. The commission’s section on contracting had an almost despairing tone. If English is to get the return he hopes for, he will need to fix that.

Tie the commission’s thinking into the system introduced in 2012 of 10 numerical stretch “targets” for some services, most straightforward and involving one agency and some involving more than one agency.

These have sharpened agencies’ focus. But meeting a target does not necessarily improve overall social wellbeing. Getting a sole parent into a low-paying job may be worse for the dependent child and more fiscally costly. Doing better by a single “customer” may not benefit the citizenry as a whole.

Moreover, no present target deals with the health of the natural environment and resources, an area of critical national importance but low on the Key- English agenda — though there is some push in some official quarters to add it in the next targets revamp.

The bigger aim in that next revamp is to ratchet up to complex, multi-agency targets, to produce genuine “outcomes” — changes for the better in real people’s real lives. This relates to the Treasury’s evolving “living standards framework” attending to four “capitals”, financial, human, social and natural, in addition to GDP.

Complexity requires going beyond cross-agency frontline activities, with each agency’s chief executive responsible for that agency’s bits, to “system leaders” and a particular chief executive accountable for each multi-agency outcome, with the necessary resources, tools and leverage and with new legal and organisational forms, including stronger chief executive “clusters”.

Can English go that far? Would a Labour-Green cabinet junk the lot? Who said third terms are tedious?