Public Services in Crisis? A Tale of Two Nations: Strategic Drift and Strategic Whiplash in the UK and Aotearoa New Zealand

Note: This analysis was initially prepared as a commissioned piece for a local private sector client in December 2024. With their permission, I am sharing these insights more broadly to contribute to the ongoing dialogue about public service reform. While the core analysis remains unchanged – at the time this post was published – from the original submission, it has been formatted for wider circulation. The comparative analysis with the UK has provided a valuable international context for understanding the challenges Aotearoa New Zealand public service faces in the coming year.

United Kingdom’s Core Challenges

The UK public service currently faces five fundamental challenges that strike at the heart of modern governance:

1. Fiscal Austerity’s Long Shadow

The persistent effects of restricted public spending have created a “capability deficit” within the civil service. Departments are attempting to deliver increasingly complex services with diminished resources, leading to “institutional attrition” – the gradual erosion of institutional knowledge and delivery capacity.

2. Digital Transformation Imperatives

While the Government Digital Service pioneered innovative approaches in the early 2010s, the UK now faces a “digital modernisation crisis.” Legacy systems persist across critical services, and there’s an urgent need to harmonise digital infrastructure while maintaining service continuity – a challenge exacerbated by competition with the private sector for technical talent.

3. Workforce Demographics and Skills Gap

The UK is experiencing an “expertise exodus” – an aging workforce combined with difficulties recruiting and retaining younger talent, particularly in specialised and technical roles. The traditional allure of public service careers has diminished against more competitive private sector offerings.

4. Post-Brexit Regulatory and Administrative Recalibration

The ongoing process of regulatory divergence from EU frameworks demands significant administrative capacity. This creates “implementation friction” as departments navigate new regulatory landscapes while trying to maintain service standards.

5. Climate Resilience and Net Zero Implementation

The civil service faces the monumental task of operationalizing climate commitments across all departments while building resilience to climate-related disruptions in service delivery.

Aotearoa New Zealand’s Core Challenges

The public service in Aotearoa New Zealand also currently faces five quite fundamental challenges:

1. Austerity and Failed Cost Management

Aotearoa New Zealand exhibits “false economy syndrome” in its approach to cost management. There is no doubt Wellington’s attempts at cost reduction have resulted in “capability hollowing.” Departments have pursued surface-level savings without achieving genuine efficiency gains, likely leading to a “cost boomerang” this year: where short-term savings are likely to generate more considerable long-term expenses through degraded service capability and increased remediation costs.

2. Te Tiriti Partnership

The continued development of genuine partnership models with Māori, in what I call “bicultural governance maturity,” represents both an opportunity and a complex administrative challenge. It looks like the service is confused about how to do that. The service thinks karakia is a substitute for an decent effectiveness analysis.

3. Geographic Service Equity

The challenge of delivering consistent services across diverse geographic regions while managing resource constraints is keeping the proximity-equity problem front and centre for politicians. It looks like the days of post-code public services have returned.

4. Climate Adaptation Urgency

Aotearoa New Zealand faces immediate climate resilience challenges, particularly in coastal infrastructure and service delivery networks. It appears to have put its head in the sand on these.

5. Digital Inclusion and Connectivity

Like the UK and Australia, Aotearoa New Zealand is encumbered by legacy systems. It urgently needs to invest in digital service delivery that reaches all communities equitably. That means consolidating some regulatory functions and registers. However, there is not a lot of money to go around, and the Ministry of Regulation is being focused on ideological goals rather than substantive system efficacy and outcomes.

The Strategic Coherence Crisis

United Kingdom

The UK exhibits strategic fragmentation. Departments pursue conflicting objectives without coherent cross-governmental strategic alignment, creating policy collision zones. For example, devolution delivery conflicts with environmental protection goals, while digital transformation initiatives clash with departmental autonomy preferences. This lack of strategic coherence manifests in “implementation paralysis” – where competing priorities effectively neutralise progress. This has not been helped by what is coming out of Number 10.

Aotearoa-New Zealand

The smaller scale of Aotearoa New Zealand’s government paradoxically amplifies the impact of strategic incoherence through proximity amplification. Said differently, the closer connections between agencies accelerate the spread of strategic confusion. The ripple effects quickly permeate the entire system when various agencies pursue fast but divergent tactics. This is evident across most portfolios, but the most obvious example is climate adaptation and retreat, where housing, infrastructure, and environmental policies are now working at cross-purposes despite their obvious interdependencies.

Comparative Analysis

The manifestation of strategic incoherence differs markedly between the two nations. The UK’s larger, more complex system creates “strategic drift”. Strategic drift is where departments gradually diverge from central policy intentions through minor deviations.

In contrast, in Aotearoa New Zealand, the more compact system experiences “strategic whiplash”. Strategic whiplash is where rapid changes in direction have immediate and system-wide impacts, often with severe organisational and fiscal consequences.

The rapid transmission of strategic changes creates substantial operational disruption, staff burnout, and implementation inefficiencies. For example, when strategic priorities shift, entire work programs can be abruptly halted or redirected, wasting months of preparation and millions in resources.

While Aotearoa New Zealand’s smaller size might suggest greater agility, the whiplash effect undermines sustainable change by preventing initiatives from reaching maturity before new priorities replace them. The financial cost is particularly concerning – each strategic pivot typically requires new project teams, fresh consultation processes, and revised implementation plans, often while still carrying the overhead of previous incomplete initiatives.

Conclusion

While both nations face significant challenges, their institutional contexts shape the manifestation of these challenges and the available solutions.

The UK might learn from New Zealand’s more integrated approach, while New Zealand could benefit from studying the UK’s experiences with large-scale digital transformation initiatives.

In the meantime, everyone should be on guard for how the strategic dimension and the lack of strategic coherency interact with the austerity challenge.

In both nations, we observe the strategy-operating models-capability misalignments – combined with reduced resources, will make it almost impossible for the civil and public service to deliver on strategic objectives.

Yet, this impossibility is going unacknowledged in political and policy discourse. In 2025, this will create implementation friction and fiction, where strategies continue to be developed and pronounced without the requisite capability to deliver them.

The meta-challenge for 2025 is strategic coherence. It will require urgent attention in both nations. Without coherence, even well-intentioned reforms risk becoming mirages – appearing promising but lacking substance due to strategic inconsistency and resource constraints.