Video transcript: Better Public Services 2.0

Transcript for a video about Better Public Services 2.0 and Auckland.

Title: Better Public Services 2.0, Lewis Holden, Deputy Commissioner, Auckland, State Services Commission

Lewis Holden, Deputy Commissioner, Auckland, State Services Commission

I am going to talk about Better Public Services, but I also am going to talk a wee bit about Auckland, given where we are and where most of you are from. And then the third thing I want to talk about is Better Public Services in Auckland. So there’s a sort of method to the madness – might not work but we’ll see how it goes. If all of that’s too boring, we can talk film or something else.

I want to start really where Martin Matthews was finishing, really, and that’s – this is the sort of ‘Lewis Holden view’ of state sector reform over the last 30-plus years in 60 seconds – so you can time me. First 20, so this is sort of mid-1980s ‘til the early part of this century, I’d characterise it as pulling things apart. And the real driver there was to improve accountability to taxpayers as owners. Very much focused on that which we could easily measure, which is the outputs that individual agencies within the state services could be held to account for. And it was pretty effective reform process in doing that, and as an old Treasury boy I’d say was a necessary set of changes. But as Martin was saying earlier, it’s 20 to 30 years old now and perhaps in some respects has outlived its usefulness.

The last 10 years, I’d say, have been more about putting things back together. Instead of a real focus on driving accountability at the individual agency level, we’re looking now much more at how we create, as state servants, value to New Zealanders as customers if you like. Now that does come with some loss I would suggest, and this creates a degree of concern throughout the system – some loss in terms of individual and individual agency accountability, but what it gets you is much more what we were talking about earlier, much more of an outcome focus, so you lose a little bit on that sharp accountability but I’d suggest you gain quite a lot more in terms of organising ourselves to deliver what our citizens want.

Another part of that relevant for an audience like this is by pulling things apart, and you can think about – we did that jurisdictionally, you know: local government does this, central government does that – we did between commercial or semi-commercial outcomes, and other outcomes, and we went quite micro in terms of the number of agencies. We had a whole lot of new typologies, if you like, of public sector organisations – so autonomous Crown entities, independent Crown entities, state-owned enterprises, departmental agencies, and so on and so on, and so forth, and now we’re in the process of bringing it back together. And the current iteration of this, which is very much being led by Peter Hughes, my boss, and in one sense all your boss as well as the State Services Commissioner, has been codified in this Better Public Services 2.0 programme.

At the heart of this is, very much as we were discussing just before, is about delivering outcomes or results to New Zealanders based on their specific needs and requirements. And it does that or seeks to do that by putting the – being very customer-centric, putting the customer very much at the centre of what we are delivering. And that implies a whole lot of other things about how we need to work because there’s a – you really notice this in a place like Auckland, people don’t tend to think in the way government is organised. I would hazard if we walked out in the street here in Kingsland and asked people to name ten government agencies they would struggle. Name one chief executive of a government agency and they probably wouldn’t – they’d struggle there as well. They don’t even really understand or care about the distinction between jurisdictions, between levels of government, between what the Auckland Council does and what central government does.

So there’s a number of themes to this Better Public Services 2.0 work, this is a very crowded slide and I’m not going to go through all of it, but if you go from one side to the other. State sector architecture – and that’s about ensuring that our state services are organised around people’s lives. So in the discussion earlier we were talking about personal safety. Well that’s not about one agency of state, or even one level of government, it’s about a whole bunch of things coming together.

Another theme is around better use of data and analytics, better sharing of that, better evidence-based approaches to what’s going to be effective. Digital service transformation – that’s largely about delivering state sector services in a way that customers – New Zealanders – need to access them. And then there’s a bunch of stuff about our people – for me, a big part of that is having a workforce that understands, is responsive to, and in many respects reflects the communities that we’re serving. And then underpinning all of that is a sense of a trusted, respected, high-integrity public service. It’s at least arguable, and I for one would argue it, that one of the unintended consequences of a lot of the reform process of the 80s and 90s was we perhaps lost something of that sense of what it means to be a state servant, what it means to be a public servant, and that sense of what we are here to do in terms of delivering better services to New Zealanders.

So that in a nutshell is the Better Public Services 2.0 programme, we can talk about that a wee bit more later, but I want to talk a wee bit about Auckland, and I’ll start with a slide I use quite a lot, which is really just a way of demonstrating that in a global, and even in an Australasian context, Auckland’s a pretty small city. But in a New Zealand context it’s a really, really big city. It’s also rather different from the rest of New Zealand. Now we all know this, but I think when you’re living and working in Auckland you see this very much every day. The ethnicity mix within Auckland is very different from that of the rest of the country, although in many respects is a sort of fore-runner of what’s to come in other parts of New Zealand as well.

Now I want to talk about growth because I think this is really the defining characteristic of Auckland as a city and the challenge of Auckland in the context of New Zealand, which is very much a challenge for the state services. So the vertical access is the share of growth, and the horizontal access is the share of population. So the sort of headlines are – you’ll know this, but Auckland sort of 34/35 % of New Zealand’s population. That makes it really unusual in a country/city pairing. London, about 22% – France, about 17% of their countries. But what’s probably more significant is that vertical access, the share of growth over the next 30 or so years, where Auckland’s got over 60% of the projected growth for New Zealand. So that gap between Auckland and the rest of the country is only going to get larger.

Now, growth is generally a good thing. I would, as a economist, argue that conglomeration benefits growth – as a big city, a big growing city, is a good thing, and it is a product of success. It really reflects the fact that a lot of people want to come and live here, or those that are living here want to stay and don’t want to go elsewhere. But one of the challenges that we have as a country and as a city, is that we’ve not been very accurate at forecasting the growth that we are having to manage, and this graph – which comes courtesy of Auckland Transport – is there anyone from Auckland Transport here? Thank you very much for this graph. What this essentially shows is that – how when Statistics New Zealand do their forecasts, every few years they update those forecasts, and you’d think that all else equal, when they update sometimes the forecasts will go down and sometimes they’ll go up. What we’ve experienced in the Auckland context is that each time they’ve reset the forecasts, and these are the medium projections, we’ve seen an adjustment upwards, and as the numbers on the bottom would indicate, over the last 15 or so years our prediction of when Auckland would hit the magic two million population mark has been brought forward about 34 years. So that’s essentially – we’re growing that much faster than we had all anticipated.

And I’m not going to dwell on these but anyone who knows and lives or comes to Auckland knows the two big issues are roading – Martin didn’t quite fix all that before he took up his new role – and housing. And what this graph, I think this is an interesting one, I won’t get into the detail of it but it’s the trajectory of morning peak congestion on the main arterial network, and what it’s showing is a rather frightening increase in congestion on our key roads in Auckland and this is on a kind of quarterly, updated quarterly-type basis, so we are – to some extent – struggling to keep up with the growth that we’ve been experiencing. And a very similar pattern is – this is feasible enabled residential capacity and what you see there is what we kind of thought was necessary in terms of housing, and what we now think is necessary in terms of housing. And if you’re using outdated information, it’s no surprise that you’re going to undershoot and that I’d suggest is one of the things that we’ve been seeing.

Now – transport, housing, they’re obviously very important for a whole lot of reasons, but they may also tell us something about the Auckland productivity story. And this is a slightly complicated diagram, but the essence of it is – every big city in the world, and this is one of the reasons why big cities are quite a good thing, you expect to get what they call, the economists call, a productivity premium, from that city. In other words, because of the benefits of firms existing close to each other, larger throughput, all those sorts of things, big cities internationally tend to be a lot more productive than the rest of the country of which they are a part. And that means that they pay higher taxes and it means higher levels of service for the rest of the country. The good news is that Auckland does exhibit what they call a productivity premium. The not-so-good news is that it’s about 8% currently and 10 or so years ago it was about 14 or 15%. So the productivity premium that Auckland is generating, that all New Zealanders stand to benefit from, is actually heading the wrong way. And a lot of big cities internationally – you expect a premium of somewhere in the order of 40 to 60%. So 14% wasn’t great but 8% is a lot worse. Some would suggest, ‘Well it’s no wonder that Auckland’s productivity ain’t great if everyone’s stuck in traffic trying to find a house to buy.’ I suspect the issue’s a little bit more complicated than that.  

So that’s what I wanted to say about Auckland, and now I want to talk about combining those two ideas. There’s a little bit of a – I’m sure not in this room, but back in Wellington there tends to be a little bit of a thinking of, ‘Well government’s about what Wellington is doing, and Auckland does other stuff.’ And there’s certainly a view when you talk to business colleagues in Auckland – they tend to think, ‘Oh notions like Better Public Services and all the rest, well that’s a Wellington thing, really nothing to do with us’. But as this graph illustrates – and this looks at country-wide but it’s the same for Auckland, believe you me – what it shows, if you can see it at all, the blue part of the bar is the percentage of public expenditure in different countries by different levels of government. Principally, local government and central government. What it shows is that New Zealand is arguably the most heavily centralised form of public administration in the world, and translating that into an Auckland context: what that means is about 90% of public expenditure in Auckland and for Aucklanders is actually sourced from central government in Wellington. So, if we wanted to, from a central government point of view, just point the finger at Auckland Council and say, well everything’s their fault, that would be a tiny bit unfair and a tiny bit disingenuous. So Auckland’s well-being and functionality is very much a consideration of central government.

And this one – if you really want to frighten an Auckland audience, I’ve found – again probably not this one – is when you tell them that not only does much or most public expenditure in Auckland derive from decisions that are taken in Wellington, but actually central government, in terms of employment, is by far the biggest business in Auckland. According to the 2013 census, we had around 95,000 public servants in Auckland, one for every six-and-a-half private sector workers. Now, yep, a lot of that is made up of sectors that often people don’t really think of as government, but of course they are, and that’s – I’m talking here health workers, education workers, police officers, and the like. We even though have 9500 in the core public service. Interestingly, a very, very small policy and strategic complement of central government here in Auckland, so about 50 policy staff currently, and then there’s my role as Deputy Commissioner of Auckland with the State Services Commission. I’m not going to dwell on this but my role is sort of a – the head of foreign affairs refers to it as the ambassador to Auckland; I’m not so sure that’s the best description, but very much an interface between Auckland interests and central government interest, reflecting all that data I’ve just been showing you, with a particularly important relationship between the Auckland Council and its associated agencies, and central government counterparts.

So now this is my attempt to sort of integrate those two sets of themes. Although within that Better Public Services 2.0 framework that I put up before, you don’t see the word ‘Auckland’ mentioned at all, we have actually created an additional theme within that Better Public Services framework that’s all about Auckland, and we call it delivering the Auckland that New Zealand needs. And just as the other themes of Better Public Services 2.0 have been built up by a group of self-nominating chief executives, saying, ‘Well, we’ll take this corner of the tapestry and work together on that,’ we’ve established a group of ten central government chief executives that I convene to work on delivering the Auckland that New Zealand needs. And we’ve also included within that mix Stephen Town who, as many of you will be aware, is the Chief Executive of Auckland Council. And so in one sense – I’ve mentioned state sector architecture before – what we’re trying to do in Auckland is create much more of a shared accountability, not only between different central government agencies, but each equally putting their hand out and saying to Stephen, ‘Well, why don’t you come and work with us on this set of work.’ That group – and very much, this is stuff that has been picked up and is being driven and owned by what’s called the state sector leadership team, which is the collection of all the chief executives in Wellington – we’ve identified a number of aspirations, if you like, which are these things listed up here, and you can see it is very much about getting on top of the data, having a shared understanding of both what is and what will be in Auckland, and some shared aspirations, some shared objectives about what we need to do as a public service, as a state service at all levels of government and across all sectors of government in order to deliver an Auckland that is a great city, not just for the people who happen to live here, but contributing effectively to the wider economy.

And we’ve also – and I’ll finish up on this and hopefully there’ll be a few questions or comments – we’ve also tried to get a little bit more specific about what some of our shorter medium-term objectives are, and what you may or may not notice is – the way I’ve framed this is the Auckland theme of Better Public Services 2.0 is both a thing in itself, a priority in itself, but it’s also very much a spatial representation of what we’re trying to do at a system-level. So it is about some of the things that we were talking about earlier around agencies working differently, cross-jurisdictionally, cross-sectorally, to deliver the services that people in this community and these communities need. It is about recognising the importance of a more diverse workforce within the state services that better reflects the communities that we have here in Auckland. And it is about using data and technology in a smarter and more collegial way, to deliver the results that we need to deliver for Auckland and New Zealand.

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