Lessons: have they been learned?

1/6/2024

This is an apolitical post. It is about the effectiveness of machinery of government changes.

As far as I know, the disestablishment of the Te Kōmihana Whai Hua O Aotearoa | Productivity Commission and Te Aka Whai Ora | Māori Health Authority are respectively the 501 and 502 machinery of government changes in Aotearoa-New Zealand since 1840.

Historically, these changes have occurred for various reasons, such as changes in government policies, governance and institutional non-performance, and the need to alter the mix of functions a public entity uses to deliver on the government’s objectives and outcomes.

Despite numerous changes, there appears to be no specific government policy publicly available for winding up or disestablishing a public entity.

In this context, I offer the following general and specific advice.

General advice

A considerable amount of information is collected during an institution’s lifetime. Similarly, a significant amount of learning takes place.

Every entity that is winding up should present formal records of the lessons learned to the responsible minister, central agencies, or our parliamentary bodies.

Although every entity and operating context is unique, lessons-learned documents will help preserve vital information and prevent errors.

Given that there have been over 500 machinery of government changes in less than 200 years, with more than 80% of them occurring since the 1988 public management reforms, machinery of government changes appear to be a popular, albeit potentially costly and unproductive, choice.

Specific advice

The senior leaders of a public entity that is to be dissolved should formally disclose the dissolution costs and assure ministers that all liabilities, obligations, and duties, whether actual, contingent, or prospective, have been officially transferred to another part of the Crown.

Those same senior leaders should ensure the proper disposal and reconciliation of the public entity’s current and non-current assets, including any intellectual property developed during its work.

Financial matters could be presented in the House, allowing Parliament to be comfortable and assured that the entity has paid all its bills and that any current and future liabilities are appropriately managed.

Also, a record of all matters relating to employee termination or transfer should be forwarded to the Public Service Commission. We do not have a central repository that reviews the cost of change and churn in detail.

Finally, the central agencies should conduct due diligence on board decisions six months before the final winding up of the public entity to ensure that decisions meet requirements for honesty, integrity, due care, and diligence.

I am not saying there are issues here, but given the vast number of structural changes we undertake, we do not know how many ticking time bombs are left: intentionally, accidentally or by way of fate.

Conclusion

I would like to end this post where it began.

There have been over 400 machinery of government changes in less than 40 years, which seems like a lot.

I am not alone in saying this. Schick (1998), Norman (2003), and Hamblin and Plimmer (2023) have been saying this in different ways for several decades.

All four have emphasised the need for more evidence of any improved performance resulting from the restructuring, especially because the structural changes appears to co-incide with significant increases in spending.

For my part, I look forward to the new Ministry of Regulation exercising its mandate in this space; they would be a welcome addition.

References:

Schick, A. (1998). Why Most Developing Countries Should Not Try New Zealand’s Reforms. The World Bank Research Observer, 13(1), 123–131.

Norman, R. (2003). Obedient servants? : management freedoms and accountabilities in the New Zealand public sector / Richard Norman. Victoria University Press.

Hamblin, R., & Plimmer, G. (2023). Instability in New Zealand’s public sector. Policy Quarterly (Victoria University of Wellington. Institute for Governance and Policy Studies).