Austerity and control

How the "efficiency" narrative is used to tighten political control over the public service

Last week Ian Lovering published an interesting piece for The Conversation and RNZ on “austerity politics” in the face of ever-increasing public spending around the world. Much of what we commented on really resonated with what’s been on my mind around the public sector times we live in, and so today I want to pick up one of the threads and add to the merry mix.

Ian is a lecturer in international relations and has a more political- and historical perspective on the public sector. With that longer lens, he calls out the paradox that while countries around the world have gone through deliberate times of austerity, public spend proportional to countries’ GDP has steadily increased since the 1970s.

He writes:

“The politics of austerity is not only about how much governments spend. It is also about who gets to decide how public money is used.”

I’m not all that sure if a greater proportion of GDP spent on public services as a shorthand is good indicator for an inefficient public service... But I understand that the association will pass muster for some.

He suggests political directives of spending cuts, in effect, lock in tighter bureaucratic control,

“while locking out people and communities affected by spending decisions.”

I find this a fascinating statement that deserves more attention – especially when our government is reviewing the Public Service Act with some changes barrelling into a similar neighbourhood.

So, let’s take this further. Ian writes that there are two potential explanations for increased public spent in the face of attempts to restrain it:

1. “Short-sightedness of market utopianism”

2. “Stubbornness of the public sector to reform”

I’d put it as my Kiwi colleagues have taught me over the years: por qué no los dos?

I suggest that it’s particularly those administrations that “tighten the purse strings” under the banner of public efficiency that smother actual public sector reform and modernisation.

The underlying logic of efficiency-gains through cost-cutting is tragically simplified: we cut an institution’s budget and don’t change their purpose or responsibilities – so the management will make the reductions necessary to still meet the expected outcomes and thus sooner or later identify and eliminate the “waste” that exists. A lean, mean public service machine emerges!

Yes, such invasive actions DO change things. They trigger a whole landslide of changes, all at once – so you can point to that in your annual report and write that you initiatives groundbreaking reform of ministry XYZ. That’s undeniable.

But iniaitives of this nature are so uncontrolled in their proceedings, setting off so many internal dynamics, negotiations, bartering and semantic battles - they create such a noise that a year on there is no telling what solutions, what tweak, what rearrangement has caused what desirable or undesirable after-effect.

In my estimation, they’re barely reforms. Because they change nothing of the substance in the logic of how the work happens inside the organisation.

Invasive, top-down, budget-driven political directives are still translated and action by largely the same managerial staff (sans a few that lost their battle, perhaps), operating in the same ecosystem and still attempting to deliver the same public services. All their time and focus are trimmed onto figuring out how to meet what is expected of them. And the best, fastest and most reliable way to do that – is to figure out what the political leaders want to see and hear, and then to give them that.

Neo-liberalism only understands what it can rationalise – what can be counted, quantified, stripped into its functional elements, and optimised. It fundamentally trusts the mechanisms of engineering and scopes out any form of human behaviour and cognition as irrational – something that cannot be trusted and that “professionals” are expected to just reign back into so-called reason.

So when austerity-shaped political directives are sent into the public sector – there will be a way to hit the targets that can be quantified, in the area wherever their spotlight falls. Likely a painful way, and one with lots of operational sacrifices whose impact can only become visible gradually and over time. But if the underlying neoliberal logic understands efficiency this way – then that’s what they’re getting.

That’s why we see operational spending reduced to size in one place, and contracting spent increasing elsewhere, in simple cases. In more complicated cases, the trade-offs that public leaders have to find are more obscure.

Photo by Josh Appel

But that is the opposite of reform.

Actual reform is a creative and constructive process in which experts from all corners of a system collaborate in root-cause analysis, design and trial of alternative solutions to problems, developing a culture of learning based on quantifiable AND qualitative observations - gradually and continuously.

The kind of “reforms” that we see under cost-cutting-first politics create fear, trigger threat rigidity and require people to resort to defensive actions, reducing risk to themselves wherever they can - the absolute opposite of the scenario in which you can honestly turn your hand to face what doesn’t work as it should and improve it.

If you believe that the iPhone only exists because Steve Jobs was excellent at pitting his teams against each other, and putting his employees under immense pressure until they finally got there – then you may also believe that MORE pressure on institutions and their operations, DEMANDS to be more efficient, and MORE direct involvement of ministers in decisions of how a public service institutions works – will create the optimal results.

Ian briefly uses the term in his piece: managerialism – the belief (and I use this word very consciously here, because it bears little rationale) that any system or service can be optimised by the superior expertise, experience and perspective of people in manager positions.

Austerity-politics, as he calls it, and cost-cutting campaigns to reign in public sector spending only strengthen the intense culture of managerialism that’s already quite deeply ingrained in New Zealand’s public sector – I mentioned before, European colleagues in public management found the degree of discretions public managers have here astounding.

But where we are – in a cost-of-living crisis – the main way to demonstrate political competency is through economic toughness. And one thing about the public sector is for sure:

It’s much easier to convince a decent proportion of the public that our public sector is wasteful, than it is do the opposite.

No-one more than public servants themselves, by the way. Ask anyone, I dare you! We know first-hand that there is indeed waste all around us. Just not necessarily the stuff that hits the headlines, but the expensive contracted BA that needs to have their hand held at each step of their job, the ridiculous IT service that’s outsourced whose agents know less about computers than you do, or the half-dead pet project of the DCE that no-one believes in but that keeps getting reanimated by a rotating cast of jaded fixed-termers.

But THAT is not the kind of waste that is being eliminated by politically-driven cost-cutting. No sir-ee.

With the direction that we appear to be travelling in – all signs are set to go deeper into managerialism. We have NO signals whatsoever for an actual change in the PSC’s or political leaders’ interest in other forms of public sector reform – we seem to continue to understand reform EXCLUSIVELY as the prerogative of CE’s and their leadership teams. Top-down, exclusionary.

And that is not reform. That is doing harder into the direction that we’ve been going in for a long time. Nothing about this is new, or promises relief – or dare is say – innovation.

And to be clear – I also look back at administrations NZ has had in the past that seemed to think that setting broad, ambitious, generous-sounding goals that no reasonable person could disagree with, was the ticket to a better public service. I strongly disagree with that also, because that just opens flood-gates without interrogating the structural integrity of the public sector and its ability to sensible use new funding sources (when it gets them). That ain’t the answer either – at the other extreme.

Really, I would go further than what Ian wrote and say that no administration will “rationalise” away the complexities of the public service in a democracy. And that when we continue only look at the “what” of reform – and not at the “how”, then neither cost-cutting not spending increases will get us better results.