Rob Campbell: Self-serving managers and consultants the problem, ‘more’ public spending oversight not the solution

Rob Campbell, former unionist and now company director, says some public agencies are chronically underfunded but others just need their skills and objectives fixed up. Photo / Michael Craig

OPINION

In a Herald column, Bryce Wilkinson from the New Zealand Initiative has called for “more oversight of public spending”. What is really needed is not more but better oversight.

The Wilkinson comment is motivated partly by the traditional change-of-government “discovery” that much of what the previous guys did was wrong-headed and/or poorly delivered.

Like many traditional practices, this one is bolstered by the fact of it often being true.

In the current case, the concern shared by many is given focus by recent Auditor-General reports on two big projects in which substantive defects were revealed.

I’ve spent a bit of time in public sector agencies in recent years. My strong observation is that there is considerable inefficiency and poor governance scattered across the sector.

From my leftist perspective, this is wrong because it undermines confidence in public services and because it limits their effectiveness per dollar spent.

Ministers like these in the current Cabinet need competent advisers, but the system too often rewards over-caution and ineptitude, Rob Campbell argues. Photo / Mark Mitchell

The left is, wrongly, often too defensive of poor performance when efficient and effective public service is key to our objectives.

But adding more oversight is not the answer. It is quality, not quantity, that matters.

In many cases, there is too much overlapping and confusing oversight. Many projects have a series of internal and external monitors and reporting lines which duplicate each other.

Pen-pushing managers

Managers spend too much time preparing reports to satisfy these and take attention away from delivery.

They group together in committees and internal boards for career protection and pay informally approved external consultants to gain endorsement. The system does not support effective decision-making but compliance and caution.

There is not waste everywhere or in every agency.

Some are clearly and chronically underfunded for their allocated responsibilities (The Environmental Protection Authority is one I am familiar with) and do a great job on what limited parts of those they are able to address.

Other agencies and projects have poorly defined initial “business cases”, accountabilities and skills to deliver the political promises they follow. These are the real issues: lack of appropriate capital allocation at the highest level and of skills at the operational level.

These issues are not solved by “oversight” or governance at the agency or project level.

There are two reasons for this:

• The various internal and “board” governance structures put in place are not always appropriately skilled and are dominated by group compliance and caution, not open challenge;
• Partly related to this, they often face second-guessing about reactions from above or external reviews because accountabilities are not tightly defined or recognised.

Better skills, not more oversight

The basic principles of delegation to a competent level and of delegation of authority to act do not operate in too many instances.

These problems are not limited to the big capital spends. They also apply to a wide range of direct service delivery and contracted or “commissioned” services.

Poorly defined project outputs, costs and accountability are very common.

The keys to changing this are in management skills and accountabilities more than the oversight or review level. Public service management favours compliance and continuation over innovation and competency.

There is a wide variety of activities public agencies undertake. In those, it is important that broadly competent and representative advice is available to ministers, alongside their standard public service advice.

This will help them in making sound decisions and the more they structure such advice from people with a limited range of views, the poorer their decisions are likely to be.

Straight talkers needed

They need people who will tell them they or their agents are wrong.

The practice has not been to seek out such people but to seek input to manage various interests and organisations. It all costs, without evidence of genuine benefit.

Again, we do not need more of these structures, we need better ones.

Already we can see with the changed Government new appointments of external reviewers or monitors, shifting of various review and planning agency names and models. It has a rather familiar ring to it. Shuffling at the oversight level.

You cannot help but feel for the people working across public agencies who do not control any of this.

In my experience, they often have a pretty clear view of the faults and opportunities facing their work and their agency.

But they know that further up the hierarchy, different factors come into play and the poor direction and accountability I describe obscure getting those faults fixed and those opportunities realised.

The last thing they need is more oversight bodies.

Rob Campbell is a professional director and investor. He is chancellor at AUT, chairman of Ara Ake, chairman of NZ Rural Land, and an adviser for Dave Letele’s BBM charity. He is also the former chairman of Te Whatu Ora Health New Zealand.