6 March 2012

Public sector efficiency needs to regain its lost mojo

Unless the Government finds its innovative mojo, moves to increase the efficiency of the public sector are likely to bear little fruit.

In a just released White Paper Alastair Boult, National Director, Government Advisory Services for accounting firm Grant Thornton New Zealand, said that tinkering with mergers of government departments is not enough.

“To achieve lasting efficiencies and long-term gains, the public sector as a whole needs to recapture its drive for innovative thinking, something not seen in this country since the ambitious reforms of the 1980s and 1990s.

“Those reforms transformed the public sector, changing the structure, organisational capacity and performance of government. New Zealand was once a pioneer and led the world in modernising government.

“To reform our present public sector we need to regain our innovation mojo from the last century. We need to change, not tinker,” he said.

According to the White Paper, innovation in our private sector continues to grow while creative thinking in our public sector has fallen by the wayside.

“The chronic lack of innovation in our public sector has led to declining efficiency, poorer services and a loss of value for taxpayers. Compared with other developed economies, our public sector is slower and less effective. Put simply, we are not being smart about the way we approach our public services.”

How can we achieve this?

“We need leadership from the top that recognises the significant role innovation plays within government. We need public sector management that creates and supports innovation processes and we also need a culture that tolerates failure, encourages creativity and embraces new ideas.”

According to Alastair Boult, the Government’s rhetoric is not matching its own record of supporting innovation.

“When measuring investment into research and innovation, New Zealand continues to place at worrying low levels. Both government and business spending into research and development (R&D) compares poorly with OECD countries.

“As of 2007, New Zealand spent only 1.18% of gross domestic product on R & D. However, the Government’s own R & D investment is also low with a 2007 OECD audit of New Zealand innovation policy ranking us 23rd out of 32 economies in the share of government R & D funding allocated to the private sector.

“New Zealand can, and must, reclaim the leadership and reputation we once enjoyed. We can get our innovation mojo back but it requires urgency and commitment, which will involve:

• Clear leadership and commitment from politicians of all political hues on the importance of innovation in government.
• Talented, experienced public sector managers who recognise creativity and are incentivised to take managed risks.
• The implementation of explicit innovation processes within government with both the people and resources to drive real change.
• Strong communication with the New Zealand public about the case for change and the economic and social benefits.

“There is a policy and leadership gap in the political marketplace which Government needs to fill urgently,” Alastair Boult said.

ENDS

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