Part 1: Service to New Zealanders now and in the future

Reflections from our audits: Service delivery.

1.1
In this Part, we look at the context in which public services are delivered and discuss the performance of services now and into the future. To form this view, we have drawn from information that measures New Zealand's performance internationally, research that we commissioned,1 and our observations from our work.

The service context

1.2
Change is constant. Global and domestic trends affect how our public services are delivered and, in the end, how they perform. This dynamic context presents significant challenges and opportunities for those delivering public services.

1.3
If services are to remain relevant and support people's needs, they need to adapt when those needs change. This could mean using advances in technology and innovation to deliver more sophisticated and responsive services in different ways.

1.4
The factors that affect how services are delivered are important. These factors interact and overlap with each other, and we cannot treat them separately. They include:

  • an ageing population, which increases demand for public services such as health and superannuation;
  • people leaving provincial towns for cities and uneven patterns of ageing, leading to smaller and older provincial towns and larger cities with relatively young populations;
  • a more diverse population, with greater concentrations of ethnic groups (particularly in Auckland);
  • increasing expectations of public services (partly driven by technology making services, and information about their performance, more readily available), including how responsive and personalised they will be; and
  • financial constraints.

1.5
Together, these factors present challenges and opportunities for public entities, including working out:

  • what they need to do differently to ensure that public services can be provided successfully in the long term;
  • what scale and range of public services are needed and where;
  • how to use effective, efficient, and up-to-date methods to deliver services, embracing advances in technology and other innovations;
  • how to involve people, families, and communities in designing, planning, and delivering services;
  • how to use and share data and information to design, plan, and communicate about service delivery;
  • how to work with others to deliver connected and integrated services;
  • what capacity and capability public entities need to deliver services;
  • how best to measure service performance and benchmark services to provide accountability and inform improvements in service delivery;
  • what they needed to do to maintain clear and proper accountabilities for services delivered jointly; and
  • how to inspire and lead people to deliver good public services that keep improving.

1.6
In our December 2014 report Central government: Results of the 2013/14 audits, we noted that the Government had reaffirmed its commitment to the Better Public Services programme, which has 10 specific targets that public entities are expected to deliver by 2017. The Government expects public entities to improve how they deliver services and transform the way they work. Major components of Better Public Services include:

  • a focus on results;
  • people-centred service design and delivery;
  • effective spending and efficient delivery; and
  • building capability to deliver services in the best way.

1.7
Better Public Services was launched in March 2012. The 10 targets cover welfare, vulnerable children, skills and employment, crime, and interaction with government.

Good performance now is no guarantee for the future

1.8
Readily available and broad indicators show that, when compared internationally, most New Zealanders seem to receive good public services. In the dynamic service context, this core of good performance is an encouraging base from which public services can be improved.

1.9
Some improvements are required. Good performance now does not guarantee good performance in the future. When we wrote this report, the Productivity Commission was consulting people about its draft report More effective social services, which looks at ways to improve how public entities commission and buy social services (including health care, social care, education and training, and employment and community services) to achieve better outcomes for New Zealanders.

Most people seem to receive good public services

1.10
New Zealanders hold public services in reasonably high regard. Since 2007, the Kiwis Count Survey2 has measured satisfaction with a wide range of public services. Satisfaction improved from a service quality score of 68 (out of 100) in 2007 to 74 in September 2012. It has remained fairly steady since. The average service quality score for the 42 services in the latest quarterly survey in September 2014 was 73.

1.11
Other indicators suggest that public services generally help to boost economic growth and most people's quality of life. For example, New Zealand ranks ahead of the averages for advanced economies for most pillars in the World Economic Forum's Global Competitiveness Index.3 In 2014/15, we ranked 17th out of 144 economies for all indicators.

1.12
New Zealand ranks highest for those pillars that are strongly tied to the contribution made by public services. We rank first on the quality of institutions pillar, which is based on indicators such as public trust, extent of waste in government spending, and reliability of public services. We also rank fourth for the primary education pillar.

1.13
New Zealand generally ranks among the best or above the median for Organisation for Economic Co-operation and Development (OECD) countries against a range of general governance and education indicators.

The need to improve services

1.14
To ensure that all people receive good public services that they need, public services need to improve in some important aspects. Although public services perform well overall, some indicators point to pressure points where public services perform worse.

1.15
An important measure of the performance of public services is their ability to improve quality-of-life outcomes for disadvantaged people. New Zealand appears to be about the middle of the OECD rankings for the persistence of disadvantage across generations. Educational achievement is lower for children living in poverty, Māori, Pasifika, and children with special education needs. This is one of the reasons that we are carrying out a five-year programme of performance audits looking at how well our education system supports Māori students to achieve their full potential and contribute to the future prosperity of New Zealand.

1.16
New Zealand slips below the median for OECD countries for some indicators of health outcomes. Health outcomes are also persistently poorer for children in more deprived communities.

1.17
The 2013 National Integrity System Assessment for New Zealand by Transparency International highlighted the strengths of our national integrity system, which underpins good service delivery. The assessment also pointed to some weaknesses, including with how central and local government work together, which affect some services.

How service context affects some public entities and services

1.18
Our October 2013 report Using the United Nations' Madrid indicators to better understand our ageing population noted that, in 2023, we could have more people aged 65 years or older than we have children under 15. In some regions, the proportion of residents who are over 65 will increase more quickly than in others.

1.19
When an increasing proportion of New Zealanders are on a fixed income, local authorities with the oldest populations are more likely to be the first to find it difficult to pay for community services and maintain, repair, and replace infrastructure. The Government will need to continue work on the effect on superannuation, health care, and social support care (such as home-based support services and aged residential care).

1.20
Our annual audits in the health sector show that financial sustainability is an increasing concern, given the ageing population and the public's overall increased expectations of services. Our July 2011 report Home-based support services for older people found that the combination of increased demand, more complex support needs, and financial pressure presented significant risks to delivering home-based support services in the future.

1.21
Our annual audits show that local authorities continued to face challenging times in 2013/14. In our February 2015 report Local government: Results of the 2013/14 audits, we noted that elected members, many in office for the first time, are being asked to respond to matters of growing complexity, urgency, and consequence. Many local authorities need to make decisions about significant infrastructure investments and face pressures to "manage down" increasing operational costs and rates demands.

1.22
In our November 2014 report Water and roads: Funding and management challenges, we looked at how local authorities are managing their infrastructure assets for roading and the "three waters": water supply, wastewater, and storm water services. Good long-term management of these assets, including funding, is vital to providing appropriate service.

1.23
In the rest of this report, we discuss other examples of how these changes affect public services and how public entities respond.

1: The research report, Changes in the delivery of public services, is available on our website at www.oag.govt.nz.

2: Detailed results for the Kiwis Count Survey are provided on the website of the State Services Commission – www.ssc.govt.nz.

3: The Global Competitiveness Index ranks economies using 110 indicators, organised into 12 pillars.

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