Two of our specialists in organisational performance, Victoria Bowes and
Tom Gott, discuss some flexible and less disruptive methods that public-sector leaders can use to check that their organisation is providing value for money.
The reduction in public-sector jobs has been well-documented over the last
18 months, with media estimates at almost 10,000 roles disestablished since late 2023. The overarching approach seems to have been what's variously described as a “sinking lid”, or “salami slicing”. In response to fairly uniform targets across government, and difficult deadlines, agencies have trimmed a bit from everywhere.
Speed has been a driving factor. The limited time has left little opportunity for agencies to do a longer, more involved exercise to work out where their resources are aligned with their priorities and strategic goals, and where they can most easily be spared.
A shift from savings to value
However, there’s been a marked shift in the rhetoric in recent weeks. The messaging from central agencies increasingly focusses on driving value for public money, rather than cost savings as an end in themselves.
Sir Brian Roche, the Public Service Commissioner, has used several forums over the last few months to communicate where he sees the biggest issues in the public service – for example, his February speech to the 2025 New Zealand Economics Forum. His concerns make up a broad-ranging list, from the number of entities, to performance reporting, to internal hierarchies and bureaucracy. The core theme though is consistent: how do we get the best value for our taxpayer dollars?
What's the difference?
“Value for money” or “efficiency and effectiveness” exercises are often conflated with cost-cutting measures. While reducing costs might be a factor, the reality is far more complex than simply considering where less money can be spent. Ensuring government activities and services are providing value for money doesn’t have to mean spending less on them; it’s more about aligning your resources with the activities that are central to achieving your goals.
In some cases, that might even mean spending more in order to supercharge the results you’re getting for your investment.
How do you know which activities are crucial to achieving your priority objectives?
As work programmes evolve over time it’s easy to lose sight of what your original intention was, and how an activity was meant to help you get to your destination more quickly. Going back to basics can be useful: think about what’s most important for you to achieve as an organisation for the public. What’s your “reason for being” and what does that mean in practice?
That then gives a platform to interrogate what your organisation is doing that directly supports those objectives, whether through work programmes or policy development, or the less visible but equally essential activity that helps keep the wheels turning – like back-office or supporting functions. Asking those key questions will most likely give you a clearer picture of what’s not so essential to your goals as well.
How do you know you’re getting value from those functions and activities?
There's a temptation at this point to go down the rabbit hole of deep value-for-money assessments, but these can take resources and time that you simply don't have.
Instead, you could consider a "rapid diagnostic" approach to identify hotspots and critical dependencies for the areas you've identified as essential for delivering on your objectives. This will quickly give you a map of what's most important, and will start to give a sense of where there might be problems or inefficiencies – for example through overlaps, misalignments, or organisational culture-driven "brakes" on performance.
the rabbit hole of deep value-for-money assessments
This approach also has the benefit of using existing tools and information rather than requiring reams of new data. You can draw, for example, on previous independent reviews, engagement surveys, intervention logics, and financial and performance reporting. Use those inputs to support strategy mapping, heatmap analysis, or the myriad other ways to extract the gold you need.
Taking action
Once you've got a firm handle on what's essential for meeting your organisational goals and adding value for New Zealanders, and how well you're achieving that, you'll be better placed to take decisions, and also to advise your ministers.
Yes, this might result in cutting resources in some areas, but this will give you assurance that the people and skills you have are focussed on the highest-value activities, whether they’re in the frontline or the back office.
Also, shifting resources within your organisation doesn’t necessarily mean lengthy, disruptive change processes. Using existing flexibility, for example secondments, can be an effective way to inject temporary resources where you need them most.
And to make things easier for the next time you need to reset your organisation, use this opportunity to check you’ve got well-considered performance measurement and reporting in place. This will ensure that you know whether your progress and results are in line with the value you’re expecting to see from a programme or activity.
