Barrie Saunders on state sector neutrality

The Dominion Post yesterday had an excellent opinion piece from Barrie Saunders, one of the partners at Saunders Unsworth on neutrality in the public service. I liked it so much I phoned them up and asked if I could blog a copy (as Dom Post does not have it online) and they have kindly sent me through a copy.

The full article is over the break. I wanted to focus here on Barrie’s recommendations:

To restore confidence in the public sector four things need to happen:

1. CEOs should act as CEOs and push back against any attempt by Ministers or their advisers in respect of the appointment of either staff or consultants, or anything else that should properly be decided in the department.
2. The State Services Commission should vigorously defend the model against those who seek to undermine it and provide strong support for CEOs who struggle.
3. CEOs should be appointed on open ended terms, as the Government has generally mandated for the private sector under the Employment Relations Act 2000. This would require a change in the State Sector Act. That extra security would help CEOs deal with inappropriate pressures from Ministers or elsewhere. Open ended appointments would still allow for redundancy in the event of restructuring and incompetence. The very rare cases of a breakdown in the relationship with the Minister would require one or the other to be transferred to another role.
4. Finally the Cabinet Manual should make it clear that Ministerial Advisers cannot do anything the Minister is unable to do. This is necessary to ensure that Ministers don’t hide behind their advisers when dealing with their departments. A code of conduct for them is another option.

The Hive also liked the article, and says the new SSC head is going to have to play a major role in re-establishing the political neutrality of the public service, and that maybe make a temporary appointment as Commissioner to be a change agent, and a permanent appointment after the election.

The full article is below

The public service’s reputation for political neutrality, professionalism and good employment practice received an unfortunate but well deserved hit in 2007.

The hiring and then termination of Madeleine Setchell’s position at the Ministry for the Environment, her non-hiring by the Ministry of Agriculture and Forestry after advice was sought from the Minister’s office, and the murky circumstances around the hiring of Labour Party activist Clare Curran at the Environment Ministry, show something is wrong in the Public Service. There is too much anecdotal evidence to conclude that these events were entirely unique.

The role of the Public Service is laid out clearly in the State Sector Act 1988. (Ministers are covered by the Cabinet Manual). It requires political neutrality so the public service can serve governments of different persuasions, implement Government policy and provide free and frank advice. By definition good CEOs will be able to adapt to different Governments and Ministers. This is a core competency – not an optional extra.

Chief Executives have sole responsibility for the employment of departmental officials. They should however keep Ministers informed of any employment matter that is likely to enter the public arena. This logically extends to consultants also.

The conflict of interest argument is frequently overstated and was in this case. Ms Setchell had only one employment interest and thus no conflict while at the Ministry for the Environment. No one argued John Key should have sacked his press secretary Kevin Taylor because his partner had become Communications Manager at the Ministry for the Environment. In Wellington, professional couples working in related fields, are well used to managing perceived conflicts.

Given the clarity of State Sector Act and the Cabinet Manual, why did two departmental CEOs apparently consider it necessary to have regard for the opinions of Ministers and or their political advisers?

To answer that, one has to consider the implications of changes to Ministerial offices and the position of departmental CEOs, as well as the impact of MMP and the Official Information Act.

Over the past 25 years or so Ministerial offices have gone from being managed by a permanent parliamentary core, departmental secondees and someone from Tourist and Publicity to handle the media, to something totally different. Offices typically have hand-picked press secretaries and advisers, who come from outside the public sector. The advisers work with government officials and the outside world. Some are extraordinarily influential and powerful because they typically have a free rein and report direct to the Minister.

Some departmental officials struggle with the politically appointed advisor role. Do they work on the basis that the adviser always speaks for the Minister? Reading the Minister accurately is important, and there are many ways this can be done, including watching out for smoke signals.

Unlike the previous policy where there were “permanent heads”, today’s departmental CEOs do not have tenure. They typically start with a five year contract which may be followed by a shorter term renewal, but there are variations to this formula. There are performance reviews and some pay is at risk. This change gave them more freedom to manage and the responsibility that goes with that.

Finally, effective communication has become a very high priority for the government. Ministers expect departments to deliver for them with communication to the public and sometimes on matters that are very political. Clearly in the eyes of some Ministers, if this involves crossing a few boundaries, that is ok, provided there are no ministerial footprints.

Given these realities it is hardly surprising two CEOs found reasons not to use Ms Setchell that had nothing to do with her capabilities. Unless some real leadership is taken by CEOs and the State Services Commission, variations of what happened last year will recur. To restore confidence in the public sector four things need to happen:

1. CEOs should act as CEOs and push back against any attempt by Ministers or their advisers in respect of the appointment of either staff or consultants, or anything else that should properly be decided in the department.

2. The State Services Commission should vigorously defend the model against those who seek to undermine it and provide strong support for CEOs who struggle.

3. CEOs should be appointed on open ended terms, as the Government has generally mandated for the private sector under the Employment Relations Act 2000. This would require a change in the State Sector Act. That extra security would help CEOs deal with inappropriate pressures from Ministers or elsewhere. Open ended appointments would still allow for redundancy in the event of restructuring and incompetence. The very rare cases of a breakdown in the relationship with the Minister would require one or the other to be transferred to another role.

4. Finally the Cabinet Manual should make it clear that Ministerial Advisers cannot do anything the Minister is unable to do. This is necessary to ensure that Ministers don’t hide behind their advisers when dealing with their departments. A code of conduct for them is another option.

Barrie Saunders is a government relations consultant who served as press secretary to Bill Rowling, then leader of the Labour Party Opposition, between 1976 and 1979. He has no government clients.