Who guards the guardians?
Colin James's address to the Institute of Public Administration, 25 June 2009
The public sector has long been big in New Zealand. An assumption that the government is by and large a friend in need and in deed is part of our political culture. This trust and the fact that the public sector is big means the public has a strong interest in its government operating by clear, well-understood and strict rules of conduct. Observance of those rules is not a technicality, to be adjusted for convenience. Observance of the rules -- of propriety in government -- is in the public interest.
Of course, the government isn't always a friend. Maori know that from their post-Treaty of Waitangi history. Everyone has a story or two about stuff-ups or gaps in services or unfair or incompetent treatment at the hands of a public agency or one of its staff. And there is a small minority which thinks the public sector is inherently a drag on economic progress and largely inimical to individual liberty.
But by and large, beginning in the nineteenth century with the active development of the infrastructure and provision of some necessary services which the private sector could not or would not supply or supplied inadequately and amplified from the 1930s onward with the construction of social security and then the welfare state, the public sector -- elected officials (ministers) and appointed officials (the public service), between them making up the government -- has been an integral part of our custom and culture. New Zealanders feel comfortable turning to ministers for action through the public service to address a problem or expand opportunity.
At the same time there is suspicion of the state. New Zealanders expect their ministers to be the public's servants, the people's servants. The public service is the agent of that public-serving ministry, not the staff of an impersonal, superior state. The government is a friend. It is not a master. When it intrudes too far into the private sphere, it is rejected. The anti-whacking legislation, popularly thought to be an anti-smacking measure, was rejected for that reason. The public interest dictates that the public sector respects the limits of its writ.
I recognise that the terms "public sector" and "state sector" are often used interchangeably and that the State Services Commission's remit was widened this decade from the public service to the state sector. But I think "public" carries very different connotations from "state". "State" is monarchic and/or autarkic and hierarchic (1) . "Public sector" is republican and egalitarian and, as many commentators have observed over a century or so, New Zealanders are small-r republican in their pragmatic expectations of the government, even if they still have a certain small-r royalist fondness for the Queen.
The underlying ethos of this suspicion of the state but comfort with the public sector (the government) is the notion of a "fair go", to which most New Zealanders subscribe without needing to think about it. This is both an individualistic notion and an egalitarian one. First it says that I should have as good a chance as possible to get on in life and to do the things I want to do and that other people should not get in the way. Second, it says that if I am to have a fair go, so, too, must everyone else; otherwise, why should others not get in the way of my fair go? Thus, each individual's expectation that others get a fair go is an integral part of the individual's own fair go. Fair's fair. Hence the welfare state: I can't get a fair go without a decent education and decent health care and help when I can't help myself.
So the public sector has a large role in ensuring the fair go, both in restraining individuals from blocking others' fair go and in ensuring everyone has genuine opportunity. And the public sector is thereby involved in the private sphere, in effect by invitation. How much it is involved is constantly renegotiated, depending on the public mood, prevailing theories and ideologies and the predilections of ministries.
Consequently, the borders between the public and private sectors are porous and constantly redrawn and there is much mixing and blurring of public and private. A charity, an iwi organisation or an NGO which accepts government money or contracts to the government to perform some services is to that extent part of the public sector. A road paid for by the public might in effect become the property of a private company.
The current search by ministers for new ideas to lift the public sector's productivity and their openness (at least for now) to ideas from all sources is likely to make those borders more porous still. The notions of social innovation and social entrepreneurialism also imply more mixing of public and private; likewise, the likely greater role of ecosystem services in economic activity. And if one looks out 25 years or so, health care, presumed for 60 years to be predominantly funded by the government, is likely to require a greater private contribution.
We are entering another period of profound and far-reaching change which will have significant implications for the public sector.
The State Sector Act 1988 replaced what Richard Norman in 2008 called "hierarchical structure and a clan-like focus on lifetime employment" and "internal focus and integration, coupled with stability and control" with "delegation of flexibility and discretion to chief executives and opening up of public service roles to external competition" and "external focus and differentiation of public sector tasks": in short, a change from "hierarchy and clan solutions" to "market and network solutions". (2) A supposedly unified public service was replaced by one organised in what came to be known as "silos", with chief executives specifically accountable for managerial decisions within the portfolio. There was considerable agonising during the 1990s about how to get better coordination among the atomised agencies which resulted from the separation of advice, regulation, funding and operations. There has since been a lot of waffle, especially from ministers, about "whole of government" and "joined-up government".
There were three obvious solutions: stronger central agencies with a coordinating role (Richard Norman concluded in 2008 they are too weak); networks of interlocking committees (backed in 2002 with slightly more flexible cross-portfolio funding options); and inventive and imaginative use of digital communications to create virtual networks. The more recent evolution of CEO "clusters" may offer another route to better coordination.
Of those options, the digital dimension seems to me to offer the most. Under-30s take for granted its rapidly changing modes, technologies and uses. Clare Curran, Labour's communications and IT spokesperson, though over 40 herself, in a speech on Tuesday neatly summed up the greater potential transformational capacity of digital networks compared with that of previous network innovations such as roads, railways, electricity and telephones: "It is like previous [network] revolutions because it will give people new ways to work together, be together, share and grow and enjoy life. It is unlike [previous network revolutions] because it deals not with goods or travel but with information. And we, the consumers, are not only passively receiving the information; we're starting to do stuff with it ourselves -- and producing it ... e-commerce, free distribution channels for music by budding artists, live video conversation, social networking sites, blogs, Google Streetview and Twitter ... bank payments replacing cheques, live video streaming of concerts, conferences, big events" ... linking cows "to an internet-based automatic milking system to improve productivity ... My Sky, HD TV, 3D TV, Blue ray game consoles, Skype, 3G." (3)
If an over-40 MP can reel off such a list and grasp that there are extraordinary possibilities, it seems to me that highly educated senior public servants ought to be able to grasp the possibilities too and learn from new recruits. There is no compelling reason that the country which produced the 1912 public sector reforms and the 1988 act can't realise the digital potential for the public sector -- in ways which a pre-baby-boomer like myself can't begin to imagine.
Clare Curran's new society sounds like anarchy. Certainly my core business, journalism, has been fragmenting rapidly into anarchy, leaving me a Jurassic specimen high on the beach while mutants and avatars with unfamiliar DNA frolic happily in the surf. But it seems to my limited and decaying imagination that if the business of government is set to become more diverse, as I expect, and if consequently the borders between public and private become still more porous, it would be in the public interest for some imaginative people to explore new ways of doing things to more effectively and efficiently serve the public interest. That is a consequential obligation, given the public's trust in a big public sector.
The public interest is the public sector's work. Understanding, protecting and advancing the public interest is what the public sector does -- or is charged with doing.
There are two parts to this work.
One part is done by the politicians. They are elected by the sovereign people as delegates or deputies. They are constrained ultimately (though inexactly) by elections and between elections only by informal mechanisms: the media, polls, citizens-initiated referendums and perhaps in due course binding referendums, citizens juries and citizens assemblies, which can have an effect on politicians' votes and therefore their power. (The courts also have a constraining role in two main senses but that is a separate story.)
Being elected, the politicians, and particularly those in the ministry, can claim they are authoritative interpreters' of the public's interests. This comes in two forms: policies put to the voters at an election and in theory forming a mandate for specific actions; and a mandated authority, having won office, to use their best judgment on issues not put to voters at an election.
The degree to which these claims are justified is disputable by other politicians, by lobby groups, the media and interested citizens. But that ministers have the authority to act is not disputable by public servants. They are bound to give effect to, or at least try to give effect to, ministers' lawful instructions. A department is an extension of the minister. That is a cornerstone principle of our system. It is the basis for the insistence in our system that public servants set aside their personal or political preferences in the work they do for the minister.
But politicians are temporary. Though the longest-serving politicians can spend up to three decades in Parliament (occasionally more) and up to two decades in the cabinet (as Sir Keith Holyoake and Sir John Marshall did), ministers typically spend a relatively short time in office and not even all that time in the same portfolio. Senior public servants typically spend much more time in the public service and serve ministers of different parties at different times, according to the ebbs, flows, eddies and flurries of elections. The Cabinet Manual recognises this with its injunction to public servants to "act in such a way that their agency maintains the confidence of its current minister and future ministers". (4)
This temporal superiority gives senior public servants the opportunity -- I would say the duty -- to develop and keep in mind a longer perspective on what constitutes the public interest. Moreover, since senior public servants do not risk losing their jobs at the hands of voters, they have the opportunity -- I would say the duty -- to develop and keep in mind a more measured perspective. And, since by training and by working in their fields, senior public servants have more opportunity to develop knowledge and expertise than politicians (though some ministers do acquire considerable depth of expertise), they have the opportunity -- I would say the duty -- to develop and keep in mind a deeper perspective.
Put another way, senior public servants, if they are to do their work well, need to be able to, and actually, look through the excitements of the moment and the ideologies and interpretations of the ministers of the day and distil the longer-run, broader and deeper currents of the public's economic, social, environmental and cultural needs and aspirations. And junior public servants might be expected to be developing that capacity.
I am not suggesting that the public servant's interpretation of the public's wishes should be substituted for the minister's interpretation. The minister has the mandate and the public servant does not. What I am suggesting is that senior public servant's detachment from the exigencies of politics gives him/her -- or should give her/him -- a perspective that can enhance the minister's interpretation and/or give cause for pause and reconsideration.
That is, I think, at the core of public servant's obligation to offer free and frank advice, even if it is unwelcome to the minister or at odds with the minister's interpretation of the public's wishes or interpretation of what is in the public's interest.
Senior public servants are in that sense guardians of the public interest.
The result is an automatic tension between the minister and the chief executive officer. This was particularly evident in 2000 when a new Labour-led government suspected public servants were cast in a neoclassical mould and needed re-education.
That government's response was, in part, to appoint more advisers to ministers' offices from outside the public service as counterweights to the advice coming from their departments. This was not a new practice but the Labour-led ministers expanded it. They also kept public servants out of cabinet committee meetings. They were "servants", below-stairs. That, and ministers' general suspicion, caused considerable angst in some quarters of the public service. The government also in 2000 set up a Standards Board to lay down the duties of public servants to ministers. (The board also laid down standards for ministers dealing with public servants.)
The expansion of personal policy advisers has had two disturbing results. One is that pressure has grown on actual public servants seconded by chief executives to ministers' offices to cross the boundary between providing technical advice and improving liaison between the department and the minister to serving the ministers' political needs. That transgresses the public service's strict code of impartiality as between political parties. The second is that ministers' personal appointees have been accorded quasi-public service status despite being clearly political. In the cauldron that a minister's office often becomes, the line between political activity and technical advice has been blurred.
Ministers are often frustrated by constitutional niceties. They want things done. Departments and agencies often fall short of ministers' hopes, for ideas and in execution. So ministers are tempted to, and occasionally do, step over the boundary.
The good news is that by and large they don't. The bad news is that sometimes they do -- in part because they can't see where the boundary is. David Benson-Pope paid with his seat in the cabinet and in Parliament as a result of unwise actions in the Madeleine Setchell affair. (5) In April 1999 the present Minister of Foreign Affairs lost a portfolio because of irregularities in his dealings with a Crown entity board. One former chief executive tells me that in his time "I received two requests from ministers to employ independent people for ministers. [The first time] through inexperience I agreed. I never did it again... My experience was the requests were usually an attempt to disguise ministers' budgets." (6) This chief executive cleaned out a person contracted into the department at the suggestion of a minister.
Which brings us to purchase advisers. I think purchase advisers, judiciously used, are a good idea, especially for new ministers, just as I think ministers employing personal policy advisers to provide second opinions on departmental advice is a good thing; ministers need help in addition to the departmental secondees' technical advice. But the way this government has gone about appointing purchase advisers is an incursion across the boundary. Departments have been required to contract in, and pay for, advisers who report not to the chief executive but to the minister.
This was justified on a 1993 cabinet office circular which stated that the cabinet had agreed a minister "may be assisted by a purchase adviser who is independent of the department" and laid out the terms and conditions. But that circular stated that the advisers should be paid out of the Ministerial Services vote in the Internal Affairs Department. This is the vote that pays for ministers' personal appointees. (7) The determination by this cabinet that departments should pay for the purchase advisers does not accord with that condition.
The State Services Commission objected privately in January that "this appears to set up a new class of ministerial adviser -- neither political adviser nor departmental secondee. It would seem proper that they sit within Ministerial Services. Ministerial Services is set up for this function and this would provide for a transparent process." (8) An undated Treasury cabinet paper around the time of the commission's email assumes Ministerial Services would contract them. But ministers insisted the departments employ the advisers -- because, I understand, they did not want it to show on the Prime Minister's books as minister responsible for Ministerial Services. The Treasury accepted this and the State Services Commissioner, in a letter to Labour MP Chris Hipkins, said: "I do not find that the arrangements, in principle, breach the State Sector Act 1988". (9)
The Treasury and the State Services Commission, along with the Department of Prime Minister and Cabinet, as the "central" agencies, have a watchdog brief over the whole public service. If public servants are in some sense guardians of the public interest, as I argue, these agencies, and particularly the State Services Commission, are the logical guardians of the guardians. Sir Geoffrey Palmer, quoted in an email to your president, stated as much in a radio interview that the State Services Commission is "responsible for ethics, for the conduct, for the training of the public service. They [sic] are the guardians of the guardians". (10)
That includes patrolling the boundary between ministers and what the Royal Commission on the State Services in 1962 called the "loyal, incorruptible and politically neutral" public service. (11) If the ministers sometimes can't see where the boundary is, it is the public servant's -- and specifically the State Services Commission's -- duty to the public to mark the boundary clearly and defend it vigorously. And in my view, to be effective it should publicly report its findings. I await with interest the commission's public statement on the newest ministerial boundary incursion, the appointment, apparently to be made by the minister, of a "minder" (the Prime Minister's term) for the Immigration Service, to oversee the service and report directly to the minister, not through the chief executive of the service's parent Department of Labour. If true, this seems on the face of it most irregular.
But should I be surprised? During the election campaign in 2002, at the government's request, the State Services Commission arranged for a press briefing by Barry Carbon, then newly appointed as chief executive of the Ministry for the Environment, on allegations about genetically engineered corn, which had flared into a bitter argument between the Labour party, then in government, and the Greens; the minister was present at the briefing.
Neither that incident nor the purchase advisers will shatter our constitution or collapse public trust. Busybodies and the media can probably make enough noise to stop the slippery slope getting steeper.
But the proliferation of personal appointees in ministers' offices demands regularisation. The curious arrangement whereby these people, who are not public servants, are treated as if they are quasi-public servants by way of their employment by a section of the Internal Affairs Department, is awkward or worse. The State Services is even now devising a code for them, which would further extend public service legitimacy to them. It is long past time that this activity is separated out from the public service into a distinct commission. Indeed in my summary of a series of roundtables of senior public servants, politicians and academics I ran for the Institute of Policy Studies and the Centre for Public Law in 2001-02 on the relationship between ministers and chief executives, I argued for "formalisation of the personal appointees' role and of the minister's office as it is now organised and for a separate and explicit employment arrangement for personal appointees and explicit boundaries around personal appointees' functions and power". (12)
There was almost no support for that at the roundtables. But the discussion generally did indicate that a great deal had changed, was changing and would continue to change in the way the public sector and the relationship between ministers and chief executives operated. While there was -- and is -- no crisis, the list of significant changes I distilled, I argued, "is enough to suggest that informally, in the way the constitution normally does in this country, the conventions governing the minister-chief executive relationship are changing and that a new doctrine may be developing". (13) I would not change a word of that now. In the light of the purchase advisers affair public servants might want to ask if the direction the public sector is taking is in the public interest.
Does it matter? Yes. To go back to where I started, an assumption by the public that the government is by and large a friend is part of our political culture and hence the public sector is big. To do the work of the public interest the public sector must operate in such a way that that trust remains deep. Since politicians sometimes chafe at proper practice and fail to recognise the boundary between politics and the public service, it falls to public servants to guard the boundary. And, since politicians are constrained by their shorter terms and by the necessity to tend votes, it falls to public servants to be the guardians of the longer-term, more measured and deeper dimensions of the public interest.
And that in turn requires strict surveillance by the "guardians of the guardians".
1. I follow Roger Scruton's fourth definition of a state as "a kind of quasi-person in popular thinking, with rights, obligations and also a personal identity over time distinct from the identity of its members": Scruton, Roger, A Dictionary of Political Thought (Macmillan, London 1996), p528
2. Norman, Richard, "At the centre or in control? Central agencies in search of new identities", paper to a conference on "After the Reforms", organised by the Victoria University of Wellington School of Government, 28 February 2008
3. Curran, Clare, MP, Address to the 10th Annual Telecommunications and ICT Summit, 23 June 2009
4. Cabinet Manual 2008 (Cabinet Office, Department of Prime Minister and Cabinet, Wellington), s3.51, p44
5. Madeleine Setchell lost the job to which she had been appointed in the Ministry for the Environment in 2007 after a personal adviser in the office of the Ministry for the Environment contacted the chief executive, who tried unsuccessfully to offer her another job in the department. Setchell was the wife of the Leader of the Opposition's chief press officer.
6. Private email
7. Cabinet office circular CO (931) 9, 6 August 1993
8. Email from Kate Mallalieu, State Services Commission, to Simon Gilmore, Treasury, 21 January 2009, 12.55pm
9. Letter from Iain Rennie, State Services Commissioner, to Chris Hipkins MP, 16 June 2009
10. Email from Beith Atkinson to Ross Tanner 25 May 2009, relayed by Ross Tanner to Colin James. The email attributes specifies that the radio interview was on Nine-to-noon on Radio New Zealand on 6 May 1997.
11. Cited in Palmer, Sir Geoffrey, and Matthew Palmer, Bridled Power. New Zealand government under MMP (Oxford University Press, Auckland, 1997) p84
12. James, Colin, The Tie that Binds (Institute of Policy Studies, Wellington, 2002), p73
13. James, op cit, p73