Lifting the lid on the core government cap

The lowering of the cap on core government full-time equivalent positions (FTEs) by over 2500 to 36,475 positions is either a cynical political move or shows a distrust of public service chief executives who have been tasked with managing their agencies says PSA national secretary Brenda Pilott.

“Setting a cap is a throwback to when agency chief executives had fewer powers and politicians routinely went line by line through each agency’s budget – which is not the best way to run an organisation or a country.”

That all changed with the introduction of the State Sector Act 1988 where the government sets the annual budget and chief executives make operational decisions on how best to achieve an organisation’s mandate within the financial constraints of that budget.

“Based on the significant decreases in most agency budgets over the past several years you would expect to see – and are seeing – cuts in core government FTEs which makes the cap on core government FTEs a demoralising exercise in micromanagement,” Brenda says.

In its background materials on the cap the government states, “Achieving the aims of this policy goes beyond a focus on staff numbers. It involves smarter ways of working to achieve better service delivery and ensuring that all expenditure is carefully and appropriately managed within reducing departmental baselines.”

Far from being a smarter way of working, Brenda says that caps are seen as draconian and mean agencies are faced with untenable staffing levels or devising workarounds, such as hiring contractors and consultants, to provide public services.

As the Labour party recently reported, their financial reviews of government departments show spending on consultants and contractors has risen from an annual $336 million five years ago to $525 million last year suggesting that a number of agencies may be choosing to hire temporary staff and consultants for their day-to-day operations. Another indicator of this trend is the State Services Commission’s recent survey which shows that 43 per cent of new hires into the public service last year were fixed-term employees.

“Replacing FTEs with casual employees is not a sustainable solution, but it appears to be one that more and more chief executives are making as there is ever-increasing pressure to show both efficiencies and results,” Brenda says. “The problem is those ‘efficiencies’ may only be on paper.”

Brenda says that the State Services Commissioner and public sector chief executives need to show leadership in this area.

“There are very real service delivery risks associated with setting caps, not to mention health and safety risks for remaining employees. Public sector leadership has an obligation to advise the government on the potentially dangerous effects of the current cap and to be crystal clear about the actual number of employees it takes to provide public services that New Zealanders expect and deserve.”


This article is from the June 2012 issue of the PSA Journal. You can read back issues of the Journal by clicking here.