Wernick: Can angst about productivity lead to serious public-service reforms?

Quite a good list along with good advice. The degree to which a Conservative government will not only have the courage to engage in public service reforms but equally important the intelligence and sophistication to ensure effective and sound reforms remains in question. And yes, of course, avoid across the board cuts and focus on programs that are lesser priorities or of questionable value:

…Borrowing the language of the productivity economists, the agenda that flows from a serious discussion of public-sector productivity would include:

• The quality of the labour input – and whether there is enough investment and effort put into training and enhancing skills;
• Management acumen – and the effort and investment put into developing the capabilities of middle and senior leadership;
• Substitution of capital for labour – and the effort and investment put into continuous upgrading of technologies used for external and internal services;
• Process efficiency – and the scope for gains in time and quality that are still to be harvested by pushing farther on end-to-end digital and harnessing artificial intelligence (AI) to assist humans;
• Stripping out layers of middle management but equipping those who remain with the training and tools to do their jobs;
• Shedding assets and right-sizing the physical footprint: spoiler alert: this will encounter stiff political resistance from MPs and mayors;
• Enhancing the quality and timeliness of information for decision-making;
• Streamlining the heavy burden of internal controls and reporting that has accreted over the years;
• Reviewing the oversight system of incentives and disincentives to intelligent risk-taking that shapes behaviours;
• Hacking away at barriers to faster hiring, redeployment and termination of staff;
• Reviewing which functions can be outsourced and which should remain in-house, while making sure there will be adequate training in effectively managing external contractors.

These happen to be many of the issues that a serious attempt at public-sector reform would want to tackle.

One key difference between a serious productivity-centred approach and the simple across-the-board austerity that governments tend to use is that it could draw attention to the high cost of neglecting the internal government-to-government functions such as finance, human resources, information management, procurement, comptrollership and oversight.

These are functions that in past periods of fiscal retrenchment have taken a heavy share of cuts because they are glibly labelled as “overhead,” with unfortunate consequences.

The growth in the number of people employed by the public sector, especially at the federal level, has drawn a lot of attention. There are better and worse ways to think about bringing the number down. Hoping for the best from random attrition isn’t a good one.

The best approach, in my view, would be to recognize that those numbers are attached to specific programs, services, functions, occupations and locations.

Simply ordering an arbitrary across-the-board cut to operating budgets may achieve short-term fiscal results but will be laden with unintended consequences, sowing dragons’ teeth and causing damage to the longer-term capabilities and effectiveness of the public sector.

If the courage is there, the 2026 budget that follows the next federal election is the next window of opportunity for a thorough program review along the lines of the ones in 1995 and 2012.

Reshape the programs and the impacts on the public service would follow, but the impacts would be intended and proactively managed. There are many ways such a review could be designed.

Setting the table for this program review should be a serious exercise to delve into public-sector productivity that is honest about the longer-term goal of reducing staff numbers. Pretending that there won’t be job cuts in the next decade isn’t being honest with public servants or Canadians.

A bolder way to approach the inevitable downsizing would be to say clearly that we want the public service to be smaller, flatter and more agile.

The core idea could be to borrow the constructs from climate policy of setting targets that guide decision-making and investment, and incent technological innovation.

An ambitious version of this would be “20 by 30” – the government could set a goal to reduce the size of the federal public service by 20 per cent by 2030.

Using this target, it could then move on to seriously attack the issues of productivity and effectiveness, embrace the challenges and opportunities of AI and focus on strengthening the longer-term capabilities we need in our public sector.

Source: Can angst about productivity lead to serious public-service reforms?