Both Australia and New Zealand have taken radical steps to reform their state bureaucracies and introduce greater accountability. But in some respects the pendulum may have swung too far

As the UK government plans ambitious civil service reform, it is looking to international experience to inform its thinking. In particular, there is strong interest in New Zealand and Australia – countries with a similar constitutional tradition to the UK, but which have followed different paths as far as organisation of the civil service is concerned.

In a recently-published paper, the Institute for Government discussed the lessons that can be learnt from these two countries. Essential to both New Zealand and Australia is the role of the corporate centre of government.

Recent reforms in Wellington and Canberra have tried to strengthen the centre, in response to concerns about system capability and coherence.

The key figure in New Zealand is the State Services Commissioner, the politically independent head of the public service responsible for systemic leadership (alongside the Treasury and Department of Prime Minister and Cabinet) and for employing department heads.

The role has evolved, and current changes give the commissioner more responsibility for building leadership capability. It’s clear in New Zealand that the commissioner isanswerable for the whole system’s health. Although Australia has its own Public Service Commissioner, the more powerful figure is the Secretary of Prime Minister and Cabinet, who enforces the PM’s will across government.

But concerns about civil service capability have led to a greater focus on leadership across the system. The commissioner’s role is being strengthened and new bodies such as the APS 200 (like the UK’s Top 200) and a Secretaries Board have been created to drive improvement in management capability.

Yet civil service reform is never a purely bureaucratic pursuit. Politics remains central. At the heart of the UK debate is the complex relationship between ministers and their top officials.

In New Zealand, ministers began to commission departments to deliver specified outputs as part of major reforms in 1988. Alongside this came more transparency and clear performance objectives for departmental chief executives employed on renewable fixed-term contracts. In return, chief executives in New Zealand have autonomy over their departments, so there is clearer accountability when the civil service underperforms.

As a result, chief executives have a greater public profile than their counterparts in Australia or the UK. Often chief executives explain policy and defend the department in the media, and in exceptional cases may even advocate policies counter to the government’s position. Clearer accountability has led to independence unthinkable in Australia or the UK.

Rather than adopt the complex and sometimes cumbersome contractual approach of their neighbours, Canberra opted for increased political control over the civil service to increase responsiveness to ministers. Secretaries do not have performance agreements. Instead, their fixed-term contractssimply make clear that they are hired and fired at the prime minister’s discretion.

Former Australian prime minister John Howard used these powers extensively, sacking a third of all secretaries on becoming prime minister in 1996. Subsequent prime ministers have been more circumspect about dismissals, but secretaries in Canberra still hold their jobs only at the PM’s pleasure. Unsurprisingly, the first secretaries to sacrifice permanent tenure took a 20 per cent pay rise to sweeten the pill.

However, despite the Australian PM’s power almost all departmental secretaries are longstanding public servants not party political figures. This reflects deeply entrenched expectations of political impartiality. Of course, there is no guarantee that this system elsewhere would not lead to partisan appointments. Culture and context matter alongside structures.

Both the Australian and New Zealand models remain works in progress. There is a sense in both of a pendulum swinging too far, which current reforms are addressing.

In Wellington, it is recognised that the attempt to separate policy from implementation and to create a ‘customer-client’ relationship between ministers and officials went too far. Today, interpersonal relationships between ministers and their chief executives are recognised as more important than the content of formal documents used to assess performance. There is also a realisation that performance management for senior officials should not simply assess the delivery of pre-agreed objectives, but should also focus on building capability as part of a continuous improvement process.

The current NZ reform agenda also targets the problem of government fragmentation – the result of strong accountability mechanisms in vertical silos. The Better Public Services reforms are designed to address this by setting government-wide priority outcomes, and enhancing the corporate leadership’s capacity to deliver them.

Meanwhile in Canberra, the view is that the relationship between officials and ministers shifted too far towards unfettered political control. Some feared the prime minister’s power to hire and fire subdued the willingness of officials to challenge ministerial initiatives. Current reforms are strengthening leadership and formalising safeguards against political dominance, such as by increasing the powers of the independent Public Service Commissioner.

Perhaps the most important lesson from these two systems is therefore that there is no fixed model in either to pick up and adopt elsewhere. Different governments, in particular contexts, are implementing reforms which are all seeking a more effective, more accountable, and cheaper civil service.

Ultimately, the UK will travel down its own distinct reform path, but hopefully greater awareness of the experiments in New Zealand and Australia can help guide this journey and avoid some potential pitfalls.

Josh Harris is a researcher at the Institute for Government in London. He is the co-author with Akash Paun of Reforming Civil Service Accountability:Lessons from New Zealand and Australia, published by the Institute for Government in November 2012.