Colin James: Machinery failure can topple governments

Behind Trevor Mallard's redistribution of tertiary education money from bad courses to good ones lies a story not just of waste but of managerial breakdown. The state's machinery didn't work properly.

Indicted stand former Tertiary Education Minister Steve Maharey, Secretary of Education Howard Fancy, a truckload of full- and part-time bureaucrats and umpteen other alleged "academics".

Tertiary education is a case study of how the state services can fail. It is a lesson Don Brash and Co should put high on their list of to-dos if they win office on September 17. Machinery of government failures can kill governments.

The evidence of failure is in a report by the state sector's three pre-eminent grandees: State Services Commissioner Mark Prebble, Treasury Secretary John Whitehead and Department of Prime Minister and Cabinet chief Maarten Wevers.

Mallard blamed the 1990s National Government's EFT system: each body enrolled brought a wad of cash. It wasn't even necessary to get the body into the lecture hall. One reform contemplated by Bill English is to ensure students at least turn up before the money is paid.

And, because money was short, "academic" boards ticked off courses of little or no value to the taxpayer so they could subsidise courses of value.

But how come the "academic" boards could do this? Because what those in the trade call the "machinery of government" - the way the bits of government mesh and operate - broke down.

The machinery of government is arcane. But understanding it or not might make or break a government. It is that machinery that translates ministers' brainstorms into changes in practice, and in outcomes for those on the receiving end.

Typically, a new government underestimates its importance and ministers learn in the school of hard (political) knocks. That goes for Helen Clark's Government after 1999, despite the fact that she had been Deputy Prime Minister and several others had had Cabinet experience in the late 1980s. The machinery had changed during the 1990s.

The same will apply if there is a National government. Brash and John Key are new boys. Of those who have had ministerial experience, only English has really tried to understand the theory and practice.

The risk for a new government bulging with policy ideas, as Clark's was, is the machinery can't deliver or can't do it quickly or gets it wrong. The result is some things are only now being put right.

English's take on what went wrong in tertiary education was that Maharey changed the culture and encouraged institutions to let rip. English says National would have ensured there was no twilight golf or radio listening. We can't tell, since National has been conveniently in opposition.

What we do know is that the Ministry of Education was thought not up to taking on the vice-chancellors and reshaping the system. So Maharey created the Tertiary Education Commission (TEC) - despite Labour's declared intention to reduce the number of such arm's-length bodies and integrate them into their "parent" departments.

That meant there were three separate bodies tramping round in tertiary education: the TEC, the Qualifications Authority (NZQA) and Fancy's ministry. And each focused inward. The excuse was they had huge change to deal with: a total rewrite of the school curriculum and a new "qualifications framework" (which ate up much of NZQA's time) in the 1990s; a vast rise in student numbers in that decade; reintegration of special education and early childhood education delivery functions in the 2000s into what had been just a policy ministry; introduction of the NCEA in the 2000s; the profiles, charters and centres of excellence in the 2000s aimed at reducing duplication and stopping the EFT rorts. Stir into all that heavy resistance by some institutions and teachers.

Even the three grandees express some sympathy: "The extent of change and its implementation has crowded out much of the capacity to take sector-wide perspectives and maintain strategic oversight." The three agencies "got somewhat trapped in concentrating on the design and management of processes to implement policies and were less able to consider the wider effectiveness of those policies and the strategic risks surrounding them". They also "didn't listen effectively".

It didn't help that Maharey was understandably distracted by his wife's protracted illness and death in 2003 and 2004. Nor that Fancy, one of the state's most conscientious and hard-working chief executives, lacked the toughness to inject the necessary "strategic insight".

Maharey has gone, replaced by Mallard. Fancy has been given some tough riding instructions by the three grandees. He has a tough job. The three agencies "do not have the capability to take a strategic approach to policy implementation".

TEC has a new chief executive with a big reputation and 1980s Education Minister Russell Marshall as chairman, so it might do better. NZQA, ultimately at fault for not demanding rigour from the "academic" boards, is reeling from the NCEA tragi-comedy. The ministry's tertiary arm is rebuilding.

Logically, all three would be amalgamated, which seems to be the three grandees' between-the-lines preference. But the upheaval would interfere with the improvements now being driven through, so they did not recommend that.

The lessons for the September 17 contestants: think hard about design, not just size, of the state. Labour's slowness to fix the tertiary muckup is costing votes. It's time for Brash and Key to think more deeply than just "cuts".