HOW BILL ENGLISH UNDERMINES LABOUR
By Richard Harman (author)
Amid the pile of accolades that were directed at Finance Minister Bill English as the year ended it was easy to forget that he is a politician with deep roots in the National Party.
But talk to him about his radical overhaul of the way the Government spends in its social portfolios and he will suggest that the social investment programme has not just been a highly successful fiscal management programme but has also been a political win for the Government.
And he believes that it will play a critical part in helping National win a fourth term in Government; a factor that may influence his own decision on whether to stay on in politics for what would be his 10th term as an MP.
English says the Government is now beginning to be able to count the savings that the social investment approach is making and he says the welfare reforms alone have probably saved between $700 million and a billion over what the Government thought welfare would cost four years ago.
“That’s made all the difference in us getting to surplus,” he says.
Now as he and the various Ministers and officials work on this year’s budget he can also point to a change in attitude within the bureaucracy towards budget negotiations.
Everything now is related back to what complex data says about who is at risk and therefore most likely to cost the welfare state the most.
This enables much more precise targeting of social spending but it also means that the civil servants have had to learn new ways.
“They are realising that they have to deliver proposals that can tell us which people where, who has got a relationship with them and showing us a feedback loop where they can demonstrate progress.
“That eliminates most of their ideas.
“So the whole level is changing and this budget round we are putting that to the test because the stuff they put up this round has all got to go through that process and there’s not a large number of proposals.”
Where the bureaucrats can meet English’s requirements then “we will pay whatever it takes.”
But Mr English is optimistic that change is happening in the public sector.
He says it civil servants are getting a much better idea of context through reviews that are being done across al all department spending on social services.
A review of spending on children aged 0 – 5 has just been completed and turned up some unexpected results.
It found that health spending was not as large a shad been expected but early childhood education was very large yet it only started being spent when children were three.
The study of 15 – 24 year olds identified 10 at risk groups but only three were receiving government services.
“Out of the fog of newness around social investment they (the bureaucraracy0 are starting to get a clearer picture of what the issues actually are that they need to be dealing with and at the same time the tools are now available.”
He cites as an example a standardised spreadsheet that is now available to departments and non-governmental organisations pitching for Budget money which shows the value the Government places on various social interventions, for example a person completing NCEA Level 2.
“What is going to be exciting is that a lot of the tools have been developed and the bureaucrats are starting to see the landscape quite differently.”
But it’s not just the social investment approach which has brought a demand by Mr English for more precise pricing from departments.
He’s asking them to do it when they request more money for things like pay increases.
He says the Government faces two big challenges to its operating budget this year --- the outcome of the Terra Nova case over equal pay for health care workers and the costs of the Inland Revenue’s Business Transformation computer re-equipment.
So the pressure remains on departmental budgets.
But some are beginning to creak.
Customs late last year told the Foreign Affairs Select Committee that it had a very high staff turnover at Auckland Airport which surveys showed was because of low remuneration.
You have to deal with these issues as they arise.
“You can’t just deal with them by putting a lid on them.
“We are trying to move to a more nuanced approach which is a general understanding both in the department and in the Treasury of what the particular drivers and cost pressures are rather than just saying it’s across the board.
“What the departments know is that the hurdles are pretty high so they have to be able to demonstrate that they’ve got a really good grip on what’s driving their personnel costs.”
A[part from its reliance on complex data, there is one other factor that defines Mr English’s social investment programme and that is that he has reached out beyond traditional government providers to many more non-governmental organisations and brought them into the social service delivery process.
And he says this is winning votes for National.
“All this stuff is heavily engaging the left,” he says.
“There is $300 million community investment coming from the Ministry of Social Development and we are trying to change it from drip feeding well intentioned and often under capacity organisations to hire a social worker to be nice to someone and we are saying we’re actually trying to have an impact on the hard end families.
“So tell us where you fit in.
“So that’s been about a two year conversation and in March – June this year it will come to a bit of head but those people are soaking it up.
“It’s the same with social housing.
“We are engaging with literally thousands of people now.
“Officials are starting to get good at it and the language is permeating.
“While it aligns with our fiscal view of the world – solve problems now so you don’t have to fix them again later it also aligns with our politics because the left is fully engaged with us.
“A lot them like it.
“One said to me the other day I’ve got to stop talking to you guys because you are messing with my political head.
“At the very least the left is not attacking us.
“And they are not advocating for Labour’s supposed strong suite and that’s its social policy.
“At the margins It’s worth 2 -3% to us, I reckon, in 2017.”
And this appears to be influencing Mr English to stay for another term. When he decided to give up his southern South Island seat of Dipton and stand only on National’s list many thought this signalled that this would be his last term.
But maybe not.
He won’t answer directly when you ask him whether he will stand again.
Instead he offers a long ramble about how “many of us” now believe that National can win a fourth term in 2017.
“I think that for a lot of people in here the sense that 2017 is possible is quite an attractive feature of staying on.
“They’re thinking that there’s a lot of work to do, because we are only just getting started on some stuff.”
That sounds like there’s more to come from the quiet English revolution that is dramatically changing the way the Government budgets and provides services.