More on purchase advisors

I’ve been reflecting more on the Ministerial purchase advisors, and while Labour have largely stuffed up this issue, there are a couple of aspects where the Government can be legitimately criticised.

First of all, I have to say that Labour are seriously misjudging NZ outside the beltway, if they think they are going to get any resonance by complaining about how Ministers have used some experienced experts to help cut costs in their Departments. Only the PSA think this is a bad thing. In provincal NZ, and Auckland, you could put on a parade and have these advisors celebrated for their service to NZ. It would get more people along than the Santa parade.

Simon Upton writes in the Dom Post about his experience with purchase advisors:

The country learned last week that government ministers have been employing “purchase advisers”. The scoop was portrayed in sinister tones. The advisers were “secret”, “handpicked” and had been “unmasked”. Their employment amounted to an “unusual arrangement”.

Shocked to the core, I sought clarification and was disappointed to learn that the conspiracy only ran to seven such operatives. I rather hoped there would have been more because it is an eminently sensible use of public money.

So sensible in fact (and so “unusual”) that I took the trouble to extol the virtues of this approach to Trevor Mallard back in 1999 when he succeeded me as state services minister. I strongly commended the continued use of purchase advisers, a role I – and some of my colleagues – used extensively during our decade in office.

Upton continues:

Mr Mallard didn’t apparently take much notice of my advice.

Purchase agreements, I understand, became optional and in recent times ministers have contented themselves with negotiating “statements of intent”. A decade of billowing surpluses meant that no- one had to worry too much about priorities. Ministers could afford to indulge themselves with words rather than don overalls and climb down into the engine room of the numbers.

There are those who regard the idea of ministers “purchasing” outputs as an ideological tool to undermine public service and the Public Service. For me it was completely the opposite.

Without transparently negotiated prices there was no way of resisting the call for across-the- board spending cuts. Nothing is more injurious to the professionalism of the Public Service. It is a lazy way in which ministers can make demands of their officials without taking responsibility for the consequences.

Now there is an issue about whose budget do they get paid out of? Should it be Ministerial Services or the Department whose purchase agreement they are advising on? I would have thought it would be easier to have them contracted and paid through Ministerial Services – as does Andrew Geddis. The Government says it has advice that it was proper for Departments to pick up the cost. I presume the rationale is that as the savings they identify will come out of the Departmental budgets, the costs of the purchase advisors should also be reflected there.

Also in the commercial world, when two parties are negotiating a contract, it is not unheard of for the contract to include that one party will pay for an independent advisor for the other party.

I’ve yet to see the advice the Government has as to whether or not they should be funded out of Ministerial Services or each Department. I think it was tabled in the House yesterday so would be great if someone can publicise it.

So what is my criticism of the Government on this issue? That they allowed Labour to portray this as some sort of secret, to be ashamed of. The Government should be proud they have got former state servants of such high calibre to help negotiate purchase agreements that will result in a more efficient public sector. They should have been boasting of the names and front footing what they were doing.

When in doubt, publicise it. It always looks better being released proactively by the Government rather than weeks later under the OIA.