New Zealand has too many Cabinet ministers and too many government agencies – but more departmental mergers is not the solution, Labour MP Trevor Mallard said at a joint lecture for the Institute for Governance and Policy Studies and the Institute of Public Administration New Zealand.

Mallard, a former Minister of Education and State Services Minister, said New Zealand’s government was too fragmented, with “Crown entities for Africa” and agencies like Work and Income New Zealand that were “a body with no brain”.

Too many ministerial positions had also been created to tie caucus into Cabinet, he said, and most of the “talent” in a Cabinet was in the top half. Under Helen Clark, the Cabinet committee of the 10 most senior ministers “worked extremely well … Those ministers were much more likely to have read – which is a good start – and understand – which is even better – the papers they were being asked to consider.”

The “ideal” Cabinet, Mallard said, would have 10 members and 5-6 positions outside Cabinet “with training wheels attached”. However, he admitted this was not a popular view among those ranked 8-20 in his own party.

Mallard also rejected the idea of wholesale government restructuring, saying its effect on morale and productivity made it unattractive. “I don’t have a major appetite for shape-of-government reform. The whole system is not coherent or logical, but the idea of spending years reviewing and changing is not appealing at all … I’m much less a fan of structural change than I was 15 years ago.”

Asked about alternatives, he said: “A lot of it goes to the ability of agencies to work together and have multi-agency budgeting.” Government also needed to relax the “very tight” chief executive responsibilities that inhibited change.

For example, when choosing a new computer system for WINZ some years ago, its senior management had not acknowledged that it needed to work better with IRD systems. They had instead taken a decision in WINZ’s interests only, Mallard said, adding: “We have got to work harder at avoiding that sort of approach.”

On ministerial appointments, Mallard took a softer line on the GCSB scandal than some of his Labour colleagues, saying the prime minister “had the right to make the appointment” of Ian Fletcher, and could have refused to answer questions about the GCSB.

However, he also noted that under Helen Clark, Cabinet “never” declined a State Services Commissioner’s recommendation.

The process then for appointments was that a deputy State Services Commissioner would talk to the relevant minster, “generally with me in the room”, about the skills and attributes that the minister wanted in his or her chief executive. But, Mallard said, “My rule was that ministers were never to mention names of persons who could do the job.”

Asked about Novopay, Mallard said it was “my fault”, since, as education minister, he had felt that the previous arrangement with Datacom left the ministry “captured by an outside organisation who could basically charge us what they wanted”.

An in-house solution was then investigated, before the decision was made to go to a new outside system, Novopay, “because allegedly there were $10 million worth of savings over a number of years and people thought that was important at the time … It was the victim in our time of short-term-itis.”

However, he added, Labour’s planned roll-out had been more careful. “There was to be a pilot, it was to be introduced regionally, and the old system would run in parallel.” National Party ministers, he said, “didn’t bother reading earlier decisions” before they approved the eventual Novopay roll-out.

In general, Mallard said the public service should rely less on contractors “who are here one day and gone tomorrow”. It should also create paths for public sector workers “to work independently of their teams across the public sector”. The public service needed to identify the next generation of leaders and allow them to “shift between agencies as they move along their career on a temporary basis”.

A government that relies too much on anecdote, doesn’t have enough specialists in top positions and isn’t properly held to account.

That was the disagnosis from Len Cook, who used to be head of statistics for both the New Zealand and the UK governments, and who gave a very entertaining – but also worrying – talk last night on how our government runs.

Speaking at an IPANZ and IGPS seminar, his argument was that several problems are seriously hampering New Zealand’s ability to foot it in the twenty-first century.

The first is that our government isn’t currently dealing with a world that is becoming much, much more complex – we’re still trying to make decisions on the back of an anecdotal, ‘she’ll be right’ approach that might have been fine 50 years ago, but isn’t now.

“This country has made so much policy on the basis of anecdote and a lack of evidence. It isn’t clear that our future can be so dependent on serendipity and received wisdom.”

In particular, we don’t go back and look at what went wrong, Cook argued. “The absence of a commitment to evaluate [the success or failure of policies] in New Zealand government is extraordinary.”

New Zealanders were “amazed” by how much evaluation the British government did, he said. “We do very, very little … We need a proper review of things that go wrong as part of our culture.”

New Zealand was also behind in terms of how much it spent finding out about how its ‘non-traditional’ trading partners – such as China – functioned. While New Zealanders were very comfortable in, say, the UK, they didn’t put much effort into understanding countries less similar to theirs.

The second big problem is in the way government departments are run. Senior public sector workers now have to do so much managerial work, Cook said, that the amount of time spent on making sure that good-quality advice is being provided is correspondingly reduced.

The government also recruits too many “generalists” to run departments, so that “you have to go down three levels [in a department] before you find someone who knows what they are talking about”.

Senior public leaders were also failing to develop the next generation of leaders in the way they had done in the days of greater cooperation and the “college of cardinals” approach among chief executives.

The third big problem is that the government isn’t properly accountable for its actions, Cook said.

Ministers often haven’t been required to actually answer questions – except more recently under Lockwood Smith as Speaker – and select committees don’t have the “grunt” and the power they do in the UK.

In short, for the last century, Cook said, New Zealand had traded in well-known markets with long-established partners, and had been able to get by on ideology and beliefs – but no longer. “We have to develop a more enquiring capacity to analyse what’s happening.”

After his speech, people in the audience backed up some of these concerns, and expressed others. One public sector worker, in particular, talked about how the quality of policy advice was being compromised by “the desire to please ministers”, and cuts to budgets that took place “to the detriment of good advice”.

Because policy analysis was increasingly being “retrofitted” around what the minister had decided, often in the absence of good evidence, ministries now produced “policy-based evidence” rather than “evidence-based policy”, the public sector worker said.

The wit and wisdom of Len Cook

On cross-party liaisons being forbidden: “In recent years, it’s become important to sleep in sheets of the same colour, whether you’re at home or not.”

On ministerial competence: “We have a great political system, but it’s like giving the keys to the car to teenagers on Saturday night – and they do wheelies with it.”

On government being so fragmented by the 1980s and 90s structural changes: ministerial responsibilities are “a random scattering, a bit like pick-up sticks”.

On Sky City: “20 years ago, I fired a mid-ranking public official who spoke to one of the parties [in a tender] and gave them information he shouldn’t have. Did I make the wrong decision?”

On inquiries: New Zealanders look for “a safe pair of hands” to run a review, whereas the British want to be “done over by the best bastard”.

The recent fate of UK leaders in New Zealand highlights the difficulty of parachuting in managers from one country to another.

Every country has different rules for its public services – which is why UK civil servants aren’t always a hit overseas.

“An unexpected journey” is the subtitle of the first Hobbit film, New Zealand’s latest contribution to world cinema. It’s also been the fate of Lesley Longstone, the senior British civil servant who was recruited to head up New Zealand’s Ministry of Education, and who is now returning home just over a year into a five-year contract.

Longstone’s abrupt departure follows that of Janet Grossman, who returned to the UK last year after only nine months as the head of Work and Income New Zealand, a frontline benefits and work support agency.

It is often assumed that public managers can move seamlessly from one country to another, especially if they possess a shared cultural heritage and similar political systems. But these two recent departures rather give the lie to that idea – in particular Longstone’s experience, which was marked by a series of disasters.

An attempt to increase class sizes, in order to redirect money into teacher training, resulted in a humiliating backdown after parents and teachers revolted. A move to merge schools in post-earthquake Christchurch was just as badly handled, with parts of it struck down by the courts. To cap it all off, a new private sector system for paying teachers, called Novopay, has been a near-total failure – so much so that it is known in some quarters as Novopain.

Not all of this is Longstone’s fault, of course. New Zealand’s education minister, Hekia Parata, new to the job, is widely regarded as being out of her depth, and was described by the main teachers’ union as “aloof and autocratic”. It is no surprise that the two women had the “strained” relationship that was cited as the main reason for Longstone’s departure.

In the words of Brenda Pilott, the head of New Zealand’s Public Service Association union, Longstone became “the fall guy for an inept minister”.

But several factors counted against the British import. First, despite having held senior positions in Britain, Longstone apparently had no actual experience of running a department or the all-important matter of managing a direct relationship with a minister. In particular, she may not have appreciated how difficult it would be to work for Parata.

Moreover, she had no personal knowledge of the way the New Zealand public sector works – which is, in some key ways, quite different from its British equivalent. Civil servants at all levels in New Zealand have a much closer relationship with their minister than is the case in most countries. Its chief executives, in particular, are more obviously accountable for their performance, through private sector-style contracts and set objectives.

In Longstone’s case, that accountability translated, rightly or wrongly, into having to front up to the media to defend key decisions, after Parata failed to show – something that UK permanent secretaries, for example, would rarely, if ever, have to do.

The reasons for Grossman’s departure are less clear, and may have been partly personal. But it cannot have helped that her minister, Paula Bennett, suddenly appointed a board of outside “experts” to oversee Work and Income’s operations. Internal power struggles between Work and Income and its parent body, the Ministry of Social Development, are also rumoured to have played a part.

For neither Longstone nor Grossman would any of these internal issues have been clear from afar. These issues might, however, have been picked up by people who knew the terrain better – including those who have made the cross-country transition more cautiously.

After all, many of New Zealand’s public sector leaders are originally from the UK. But the successful ones have usually gone out there for the long term and worked their way up through the hierarchy, rather than being parachuted in.

As Pilott put it, the New Zealand government “needs to think long and hard about making overseas appointments, and consider the unique complexities, demands and pressures of the New Zealand context”. Nonetheless, the trend continues: Kevin Lavery, the chief executive of Britain’s Cornwall county council, has just been appointed to run the city council in New Zealand’s capital, Wellington.

Lavery, whose time at Cornwall has been controversial, may of course prove to be a good appointment, especially if he has done his homework. But if not, recent history suggests that he may end up, in the words of the Hobbit’s original subtitle, going “there and back again”.

First published in The Guardian