Friends’ submission to Parliament’s Education and Science select committee, (October 2010)
We oppose the intent of this bill because we consider the Alexander Turnbull Library (currently with the National Library) a significant national cultural institution with a separate role that is not compatible with that of the Department of Internal Affairs from which it was separated in the Act of 1965.
Changes and Consequences
The Friends of the Turnbull Library is not a conservative group automatically opposed to change; we are well aware that the Alexander Turnbull Library has survived many changes in its 90-year history. The Friends only want what is best for the Library; its users, its collections, its services, and its staff. We believe this proposed amalgamation is unwise, and would take the Library from its present position to one with many unknown consequences. For example budget uncertainties (brought about by the lack of a direct vote) have the potential to affect staffing levels and qualifications, acquisitions (including donations from people in New Zealand and overseas) and the maintenance of high standards of service to the public and researchers.
1. The Friends of the Turnbull Library was established in 1939 incorporated under the Charitable Trusts Act and registered with the Charities Commission for educational and charitable objects and purposes within New Zealand.
Our objects are to:
- promote publicly the identity of and interest in the Alexander Turnbull Library as a national research and heritage collection;
- encourage research and use of the materials held by the Library;
- conduct activities and programmes which will enhance the national standing of the Library;
- communicate effectively with the Government and with users and supporters of the Library;
- maintain an effective working relationship with the management and staff of the Library; and
- maintain a strong, well informed national membership.
We have a New Zealand-wide and international membership. We have consulted our membership in preparation of the submission and held a well attended public meeting. Our members, committee and presidents over the years have included distinguished scholars, writers, members of parliament and former Cabinet Ministers.
2. We wish to make the following comments on the context of the proposed changes:
(a) The Alexander Turnbull Library was opened in 1920, following the bequest of Alexander Horsburgh Turnbull to the Crown on his death in 1918. He bequeathed his collection of manuscripts, books, drawings, paintings, incunabula, maps, photographs ‘. . . to the people of New Zealand in perpetuity’ (clause 11.2). The Library initially operated out of his former home, Turnbull House. This gift has been described as the single most generous gift given to New Zealand.
(b) The Department of Internal Affairs then had oversight of the Library. The Act of 1965 established the National Library with the Alexander Turnbull Library as a distinct entity within this and set it within the Department of Education. In 1988 the National Library became an autonomous government department no longer administered by the Department of Education and took on the name Te Puna Matauranga o Aotearoa – the wellspring of knowledge. The opening of the National Library building in 1987 saw the National Library and the Alexander Turnbull Library in the same premises for the first time. Since its inception, the Turnbull Library has grown in the size, depth and comprehensiveness of its collections, the expertise of its curatorial staff and the volume and diversity of research and publications from its collections.
It continues to build on its high reputation nationally and internationally as the foremost heritage research library in the country and is currently valued at $1 billion.
(c) The breadth and depth of the Turnbull’s collections must be emphasised: it has New Zealand’s largest collection of art works, documenting the settlement of New Zealand; the published collections contain every work written about New Zealand, by New Zealanders and/or published in New Zealand; its collections in media other than print and manuscript include photography, maps, charts, music, newspapers and oral history; its collections of digital materials are growing rapidly and will be New Zealand’s comprehensive digital collection in the same way as its published print collections now are; its collections of Maori language and literature materials are unique and of fundamental importance in the evolving history of the peoples of New Zealand under the Treaty of Waitangi. The rare books collection is not only internationally valuable but is internationally recognised and used by scholars throughout the world.
(d) The Turnbull, in other words, maintains and provides access to resources essential to a very wide spectrum of academic and public research on cultural New Zealand comparable to the research activities applied to natural New Zealand represented by the Crown Research Institutes.
(e) Previous proposals to ‘restructure’ the Library and subsume the identity of the Turnbull Library within a ‘seamless’ National Library provoked vigorous nationwide opposition. The Friends of the Turnbull Library, using their own substantial private resources contributed by its members, successfully obtained a legal undertaking to halt the restructuring as it affected the Turnbull Library.
(f) The outcome was the 2003 Act which confirmed the National Library with the Alexander Turnbull Library as a separate Government Department. The Guardians of the Turnbull Library were set up, also reporting to the Minister, although not to the public. The 2003 Act has worked well; confirming the status of the Turnbull as a collection belonging to the Crown; to be maintained in perpetuity; and with a separate Crown allocation of funding for acquisitions, under the control of the Chief Librarian of the Turnbull.
(g) This brief background is important because it reveals the chequered history of the exercise of Governmental responsibility for the critically important national cultural institution that is the Alexander Turnbull Library and underlines our concern about the nature of the proposed legislation. The proposed return to administration by the Department of Internal Affairs would be an unfortunate step backwards. The success of the 2003 Act is directly the outcome of a governance structure appropriate to the effective operation and development of this unique national cultural institution. This structure is the culmination of decades of work by library professionals, researchers, Friends of the Library, and the broad spectrum of New Zealanders who value and support the conservation of, and access to, New Zealand’s heritage. While supporting academic research the Turnbull is also open to all those who have an interest in our people’s history and culture. The period 1918-1965 when the Turnbull was administered by Internal Affairs was noted for its neglect of the Turnbull.
(h) Collection building. We note that a key issue in the campaign against loss of the Turnbull’s distinct identity concerned the importance of donations to the growth of the collections. These represent about 50% of the value of new materials deposited each year. Without public support, which depends on the absolute assurance of the independence of the library in the management of its collections, this source of national heritage materials could dry up. Public trust in the identity and integrity of the Turnbull is essential.
(i) We note the reassurances given on retaining some provisions of the 2003 National Library Act in relation to the Turnbull Library, but do not consider these mitigate the negative effect of the Bill. To quote a 2010 Cabinet paper, the Library is already a ‘well-managed and successful institution’.
(j) Indeed, it has an importance and status which goes well beyond being simply one of the areas under the control of the CEO of Internal Affairs with its multiplicity of functions such as passports, censorship, gambling, oversight of dog licensing and much more. The case for including the National and Turnbull Libraries in Internal Affairs has as little logic as would a case for including Te Papa or the Crown Research Institutes. It is worth noting that the value of the Turnbull collections, last valued in 2007/8 at $1 billion, is greater than that of Te Papa Tongarewa, the Museum of New Zealand which has a separate Board of Trustees.
(k) The proposal avoids the actual synergies between public sector institutions which are critical to their effective operation. In the case of the Turnbull, these include: the research and public library sectors, and the professional networks maintained with international research libraries for policy and best practice; museums and galleries, national and local; all dimensions of cultural research and creativity, including universities and polytechnics, the various media commissions (Film Music, NZ on Air), and the other national cultural archival organisations (Film, Television, Radio). The areas of the economy to which the library system directly contributes include: publishing, tourism, education, academic research, design innovation, content for creativity in all kinds of media as well as contributing to educational outcomes for all New Zealanders through use of resources for text books, illustrations etc. used in our schools. None of these activities has any direct relation to the work of the Department of Internal Affairs.
(l) We conclude from examination of the proposed organisational design document that the amalgamation creates an unwieldy bureaucratic structure which buries the National Library and the Turnbull in extra layers of reporting and does not recognise the crucial national importance of these vital cultural institutions. We note that the nationwide responsibilities make it important that the National Library and the Turnbull are represented at international forums.
3. The rationales advanced for the “integration,” or “amalgamation” are digital synergies, efficiency and cost savings. We find all of these reasons inadequate and not well supported. Library and Archive systems will have nothing in common with administrative systems that manage payroll, staffing etc.
(a) On possible savings: The Minister for the National Library has publicly stated the savings will amount to “millions”. We find that this claim has since been downgraded to something like $160,000 a year over four years, a very small amount compared to the costs of restructuring and redundancy, and hardly a justification. The Minister has stated in a letter dated 22 September that it is “too early to put a precise figure on savings.”
(b) On digital synergies: Internal coordination of government administrative systems is clearly desirable, where those systems have a common purpose and field of application. Neither such a purpose or field would seem to exist between the Department of Internal Affairs and the National and Turnbull Libraries. The latter maintain systems to manage and make accessible the resources in the collections, as well as to capture and preserve NZ’s digital information. Sharing administrative systems does not require an amalgamation of distinct organisations.
(c) Digitisation as a process generating new kinds of library resource is well advanced in the National Library and the Turnbull Library with a remarkable range of on-line resources now available to the public and amounting to only 1% of the Library’s annual budget. The proposed amalgamation is unlikely to benefit the library in this important and internationally rapidly expanding area with the next few years. Knowledge work with social as well as economic value is carried out in all sectors of society, and is supported by digital access to public collections. In a period of economic change and increasing cultural and linguistic diversity, digital access to New Zealand heritage collections is particularly important for the ongoing evolution of New Zealand as a democratic society.
(d) On efficiency: We repeat that Cabinet itself has accepted that the Library is a “well-managed and successful organisation.” Consequently we would observe that the time, cost and deflection of staff activity towards the amalgamation is a considerable waste of taxpayer funds and potential loss of expertise. We have serious concerns about the levels of reporting and openness of information in the proposed structure. Libraries are above all concerned with open access to information, a democracy of ideas. We understand that the Library’s annual report will be buried in the report of the Department of Internal Affairs, and that VOTE: National Library could be subsumed. This lack of separation is of major concern to us because there would, it seems be no certainty of access to adequate funding. A key feature of the 2003 Act was the funding for Turnbull acquisitions, essential to preserving the nation’s heritage.
4. One of the achievements of the 2003 Act was that the Alexander Turnbull Library achieved identity in the National Library’s annual report commensurate with its importance.
(a) We see the proposed changes as a backward step for the Chief Librarian of the Turnbull, responsible for the priceless collections, valued in many millions of dollars, to be a fourth tier manager in Internal Affairs, without direct access to the Minister. We are further concerned about the process of appointing the Chief Librarian. Both the National Library and the Turnbull require skilled experienced professional staff, not generic managers. It is essential that the nationwide responsibilities of the National Library are recognised and that the National and Turnbull libraries are represented at international forums.
(b) The Chief Librarian of the Turnbull has to be able to confer with the heads of similar organisations, i.e. those that are holders of national collections that are not National Libraries, e.g the Bodleian Library. Putting the Turnbull Librarian at a fourth level status in the DIA structure will necessarily compromise the independent actions required by someone in charge of such collections. The governance arrangements accomplished by the 2003 Act are consistent with the international and national contexts within which the Alexander Turnbull Library operates as a key component of the nation’s system for knowledge creation of all kinds.
(c) A major problem is that this Bill moves the libraries into an administrative environment with no current expertise in the professional work of such national cultural institutions, overseen by an executive made up of Deputies in which neither library nor archives will have a voice, where the governing body will be concerned only with funding and where the libraries will have to compete with other branches of Internal Affairs, in an internal contest for funding. This is inevitable when considering the number and variety of matters the Department of Internal Affairs is charged with managing. This predictable situation cannot be expected to advance the interests of the libraries or their public work.
Therefore we, the Friends of the Turnbull Library, consider the following provisions essential:
1. that there be separate financial vote for the Alexander Turnbull Library and/or the National Library;
2. that an Annual Report for the Alexander Turnbull Library and/or the National Library be tabled;
3. and that in recognition of the unique manner in which the core donation of the Turnbull Library collection was made specifically “to the people of New Zealand,” the Chief Librarian will report directly to the Minister in order to:
(a) raise and discuss issues concerning the role of the Alexander Turnbull Library including on matters concerning New Zealand’s history and culture;
(b) ensure adequate long term specialist care and protection for the special collections such as the Maori collection, the Early Printed Collection and the Milton collection;
(c) and ensure appropriate specialist professional care for, and protection of, the donations and gifts made to the Turnbull Library over many decades by thousands of New Zealand citizens.
Public meeting critical of Library merger plan
“This is a very bad idea”, former Turnbull Library chief librarian Margaret Calder told a public meeting held on Wednesday 2 June to discuss the government’s decision to merge the National Library, of which the Turnbull Library is part, as well as Archives New Zealand, into the Department of Internal Affairs.
She said her concern for the Turnbull Library also extends to the treatment of the National Library.
“This is not a decision made in consultation with archivists and librarians who know what goes on behind the scenes, who know what makes good information services. The dollars reportedly to be saved in the move are pathetic. How many times will the Library be restructured. Let’s stop it!”
Margaret Calder was one of a panel of speakers who addressed the meeting chaired by former Government Statistician Len Cook.
Professor Lydia Wevers, inaugural chairperson of the Kaitiaki (Guardians) of the Turnbull Library, spoke of her long history with changes at the National Library. As a former chairperson also of the Trustees of the National Library, she said her focus in the present changes is on the Turnbull Library.
“There has been too much change,” she said. “The Turnbull has always had an unsatisfactory structure. The 2003 National Library Act attempted to fix this. The Minister has assured us the Turnbull is safe but the Chief Librarian of the Turnbull is not the same as other managers. The arrangement could be more complicated when the National Library does not stand alone.”
Her first concern was the poor understanding of the Alexander Turnbull Library as a research library, making it necessary for it to be policed by the Guardians. The professional capabilities of the staff were vital and specialised arrangements essential. The intellectual needs of the community had to be recognised.
Secondly, there was concern about the reporting lines under the merger plan and where the Chief Librarian stood in this. S/he should not be in the third tier. What does it say about us if we allow this?
Historian Malcolm McKinnon described the rationale of synergy in digitisation as ludicrous – digitisation is about process, not content.
“The status of the Turnbull Library is important for reaching out to other institutions internationally. The Alexander Turnbull Library is a taonga.” He urged the meeting to make their views known at all levels.
Laurinda Thomas, spokesperson for the Library and Information Association of New Zealand Aotearoa, said there was no prior consultation with her organisation. “The National Librarian’s role and job should not be compromised. What are described as minimal changes could have a big impact on the operation of libraries throughout New Zealand. The predicted efficiencies just don’t exist.”
Politicians who responded to the invitation to address the meeting were Gareth Hughes, Green Party list MP and Grant Robertson, Labour MP for Wellington Central. The Minister for the National Library, Nathan Guy, was unavailable, as was Te Ururoa Flavell, Maori Party.
Gareth Hughes spoke of optimism given the Tauranga community’s rejection of the proposal to charge for all library books, with 1000 submissions made. In two months when the State Services Management Bill is introduced the Select Committee should be advised there is not enough evidence to justify the changes, which he considers are ideologically based.
He said “The reporting structure will have a negative effect and the savings of $166,000 a year do not make the changes worth while.” The arguments for it, he said, “just don’t stack up.”
“The March Cabinet paper spoke of the National Library and Archives NZ as ‘successful institutions’, and to me it seems like a solution in search of a problem. I cannot find bodies that support the changes.
“We can do something about this. It is important to demonstrate the values of the institutions and their benefits to society.”
Grant Robertson said the lumping together of these institutions under the general idea of “civic information” ignores the separate values and the different roles they carry out.
“It will compromise independence, seriously compromising important parts of the constitutional framework. There could be some shared services but this proposal is total structural change. In the March Cabinet paper, the National Librarian is clearly under the authority of the CEO of the department of Internal Affairs – let alone the Chief Librarian of the Turnbull Library.
“Submissions on the bill are essential,” he said,”and should state the principles involved. Independence of the Library is a key factor.”
Comments from the floor included:
Joanna Newman of ARANZ, who was told that the continuation of the separate financial votes for the National Library and Archives NZ is only pledged for the first year.
The Minister has said that arrangements can “change from time to time”.
The interests of the numerous and nationwide donors to the Turnbull Library were stressed.
Merging with the diverse responsibilities of the Department of Internal Affairs would mean cumbersome administration. The hub/spoke model of the Department is under pressure already and the Department is ill prepared for the change, lacking the capacity. The National Library won’t be a priority.
Reporting lines to Parliament are important and could be lost in the merger.
The Department of Internal Affairs manages censorship, a role at odds with the information access of the National Library and research functions of the Turnbull.
The Ministry of Heritage and Cultural Affairs would be a more suitable partner.
Archives have to be a Government Department. It is quite illogical to make the CEO of the National Library under the authority of the Department. Other models could be adopted as with Te Papa.
The chairman of the meeting, Len Cook, said that in the United Kingdom, National Archives are a Crown Agency and the National Archivist has a distinct identity. This is also the case with the British Library.
Statement by the Committee of the Friends of the Turnbull Library
The recent Government announcement on placing the National Library and National Archives within the Department of Internal Affairs has caused an outcry of protest.
The new National Library Act of 2003 was the result of strong representations to the Government to ensure the Turnbull collections would be held in perpetuity, and recognised that the electronic age demanded provision for digitisation of material, and copyright laws needed upgrading.
The position of the Chief Librarian of the Turnbull, as separate from the National Librarian, was assured, the collections were protected and the Guardians of the Turnbull were established, able to report to the Minister for the National Library.
Over the ninety years since they were open to the public, there has been growing awareness of the significance of the Turnbull collections to New Zealand, as our history becomes something to discover, to learn from, and to celebrate. The library is an important resource for moving in new directions, responding to the new demands of different media.
The National Library is a central institution for New Zealand history, culture and education. Librarians have been early adopters of computers and information technology and leaders in developing programmes and providing access to research materials through the internet and digital presentation.
Now the Government has announced yet another change, placing the National Library once again in the Internal Affairs Department and necessitating, we are told, ‘minor changes’ to the National Library Act. A rationale of efficiency and cost-saving and the demands of the digital age is cited.
The Friends of the Turnbull Library are not convinced that this will facilitate the proper functioning of the National Library and especially the Alexander Turnbull Library. We see the move as a very backward step and we will monitor the proposed changes to the Act very closely to ensure that the provisions for the Alexander Turnbull Library are retained in full.
Joining the National Library and Turnbull to Internal Affairs, with its multiplicity of responsibilities gives no confidence at all that the purpose and function of the Library will have adequate consideration in identity, management, budgeting and reporting. We cannot see there is a match between the Library’s purposes and the role of digitisation in identity services, or passport provision in Internal Affairs. Expertise in digitisation is well advanced in the National Library and the Turnbull and there is little, if anything, to gain from the Internal Affairs merger.
We consider these changes will not have widespread public support. Professor Lydia Wevers, former chair of the Guardians, has written to the Minister to convey her concern.
We have urged our nationwide members to be alert to the situation and express their views in letters or emails to their Member of Parliament, to the Minister of State Services, Mr Tony Ryall, and to the Minister for the National Library, Mr Nathan Guy, with copies to the Prime Minister.
Statement by Minister of State Services
The government’s decision was announced in the following statement released by the Minister of State Services on 25 March 2010:
State Services Minister Tony Ryall today announced changes to improve the efficiency and effectiveness of government agencies.
“We are looking to future-proof agencies during a time of increased restraint and rising public expectations of service delivery” said Mr Ryall. “Some agencies are going to need to work differently within their existing baselines to meet those expectations.”
The Government has agreed to:
- amalgamate the New Zealand Food Safety Authority back into the Ministry of Agriculture and Forestry;
- amalgamate Archives New Zealand and the National Library into the Department of Internal Affairs, and
- amalgamate the Foundation for Research Science and Technology into the Ministry of Research Science and Technology.
The package also includes non-structural changes to lift the performance of State sector agencies and ensure agencies are working together to strengthen cross sector arrangements.
“These changes are part of the Government’s ongoing programme to reduce duplication and operational costs, and ensure we have stronger government agencies delivering better public services in the future.”
“We are expecting to save up to an estimated $20 million over the next three years including a reduction in staff numbers of up to 55 full time jobs.”
The State Services Minister said the changes will be coordinated and implemented over time with costs met from within existing baselines.
Statement by Minister of Internal Affairs
Internal Affairs Minister Nathan Guy has welcomed the proposed integration of the National Library and Archives New Zealand into the Department of Internal Affairs.
“As the responsible Minister for all three agencies I believe they share natural synergies. These organisations have a common focus on using digital technology and making government information widely accessible to citizens through the internet.
“Pooling expertise and resources while sharing back office costs will continue to enhance front line services for the public.
“The major roles and functions of the National Library and Archives New Zealand will not change and these important cultural institutions will continue to be trusted and preserved for future generations.
“The independence and integrity of the Chief Archivist, National Librarian and Chief Librarian will be preserved. As the responsible Minister I will continue to receive independent advice from the Archives Council, the Guardians of the Alexander Turnbull Library and the Library Information and Advisory Commission.
“The day after integration occurs, services and functions for the public will be the same as they were the day before.
“I want to acknowledge the staff who have continued to be very professional while this review has progressed,” said Mr Guy.
Implementation plans will now be worked on by the relevant Chief Executives.
Cabinet paper relating to merger plan
Following is an extract (paragraphs 41-49) from the cabinet paper outlining the rationale for the merger plan relating to various state agencies incuding the National Library and Archives New Zealand:
Department of Internal Affairs, National Library and Archives New Zealand
41. Technology will play an increasing role in ensuring government discharges its responsibilities to manage information effectively and efficiently, and meet New Zealanders’ expectations that they can access information in ways that suit them. Central to this is the need to exploit digital capability to manage information and effective stewardship of and access to information held within the online domain.
42. Each of these three agencies stores and provides information which is of particular value because it is gathered, verified, classified or organised by government for the present and future benefit of our people and nation. Examples are archives, collections of national cultural importance, identity records, publicly accessible datasets and government statistics. All three agencies are investing to deliver their information online, 24/7, to New Zealanders. Both Archives and National Library have significant digitalisation plans and bringing these departments together with DIA will support this development with less risk and cost. It will produce opportunities for the use of common capability, economies of scale, and transfers to frontline services through shared backroom services and better access for the public.
43. We have considered whether there are any risks involved in this proposal which would justify leaving either National Library or Archives New Zealand on a stand-alone basis. In the case of Archives New Zealand, officials have carefully considered whether, given its constitutional importance, the need to maintain the independence of the Chief Archivist necessitates retaining a separate Archives department. It is quite clear that continuing with a stand-alone Archives department is not necessary. Advice from Crown Law confirms this both in terms of public management principles and previous judicial rulings on the matter.
44. Department of Internal Affairs (DIA) has a pivotal role in providing information services. Through its responsibilities in Identity Services in particular, it is experienced in being the trusted custodian of New Zealanders’ records and information. Recently, in July 2009, DIA successfully absorbed the Government Technology Services (GTS) functions and staff from the SSC. Through its role with GTS, DIA has the capability to bring enhanced technology to collecting, storing and preserving records and information, and enabling its reuse to bring forward new thoughts, ideas and economic opportunities.
45. It can be anticipated that this amalgamation will result in:
future-proofing of all these key skills and functions by placing them on a much larger corporate platform with ongoing viability in times of fiscal constraint;
lower corporate overheads (fewer senior managers and shared corporate services);
reduced collaboration transaction costs (less duplication and fewer agreements to manage and simpler funding arrangements);
improvement of current systems though the sharing of each agency’s technologies and staff capabilities.
46. DIA estimates that efficiencies in ICT functions and elimination of back-office duplication would over three years deliver financial efficiencies of $3-9 million. Oneoff transition costs are estimated at $2.5 million in the first year, to be managed within baselines. Initial estimates are that the change would reduce FTE staff numbers by at least 15.
47. Risks have been considered and can be mitigated. We are conscious that stakeholders are likely to express concerns that specialist services and skills in the separate departments would be lost. While Archives New Zealand and the National Library are currently well regarded and successful institutions, the prospective role of an enlarged DIA is not as well understood. Officials consider that good change management and communications can mitigate these risks. Stakeholder concerns could include a view that the Chief Archivist’s independence or archival practice would be undermined, or that the separate status of the Alexander Turnbull Library would be threatened. This risk can be mitigated by retaining, with only necessary minor amendments, the legislative provisions which currently set out the role and powers of Chief Archivist and National Librarian, together with associated bodies such as the Archives Council. However, it is unlikely that mitigation of risk in these ways will allay a level of publicly expressed concern.
48. In terms of the Machinery of Government Objectives, outlined in paragraph 13, this proposal:
will help ‘futureproof’ the functions of the two smaller agencies through their location within a much bigger and therefore more sustainable organisational structure;
is positive in terms of financial efficiencies;
will improve effectiveness by bringing together key skills and consolidating resources in the information and ICT fields.
49. The chief executive of the National Library does not support this proposal and instead favours an amalgamation of National Library and Archives NZ as a prelude to consideration of more extensive amalgamation of agencies not centred on the Department of Internal Affairs.
Long on assertion, short on evidence: The proposed amalgamation of Internal Affairs, Archives New Zealand and the National Library
A paper prepared by Dr Donald Gilling FCA FCPA, on behalf of Economic and Social Research Associates. An earlier version of this paper was delivered at the Archives New Zealand Action Committee meeting in Wellington on 3 May 2010.
The March 2010 Cabinet Paper that proposes the amalgamation of Archives New Zealand and the National Library of New Zealand into the Department of Internal Affairs (DIA) is a remarkable document, long on assertions and generalisations but short on evidence and analysis. It acknowledges that Archives New Zealand and the National Library are “well regarded and successful institutions” (paragraph 47) but then ignores the obvious question that “if they are not broke, why fix them?”
Of eighty-three paragraphs devoted to outlining the “Next Steps in Improving State Services Performance” only nine paragraphs are devoted to the proposed amalgamation, perhaps takeover is a better word, of Archives New Zealand and the National Library by the DIA. The central argument that the nine paragraphs advance can be summarised in this manner.
- Technology will play an increasing role in managing government information
- Digital capacity needs to be exploited to manage information and stewardship of, and access to, information held within the online domain
- All three “agencies” are investing in digitisation
- Bringing the three agencies together will support digitisation with less risk and cost
- DIA has a pivotal role in providing information services. It has the capability of bringing enhanced technology to collecting, storing and preserving records and information, and enabling its reuse to bring forward new thoughts, ideas and economic opportunities.
Thus it can be anticipated, the paper claims, that the results of the amalgamation/takeover will be:
- Future-proofing of key skills and functions by placing them on a much larger corporate platform
- Lower corporate overheads
- Reduced collaboration transaction costs
- Improvement of current systems
The Cabinet paper claims that the amalgamation “will help “future proof” the functions of the two smaller agencies through their location within a much bigger and therefore more sustainable organisational structure.” (Paragraph 48).
There is no doubt that DIA will be the dominant agency in the amalgamation. In the 2009/2010 financial year DIA was allocated $193.45 million by Parliament for operating and capital expenditure on its current functions and responsibilities. The National Library was given $90.41 million, and Archives New Zealand $27.29 million. In other words, DIA spends seven times as much as Archives New Zealand and is a bit over twice as large as the National Library. The $27.29 million allocated to Archives New Zealand was only $1.3 million more than DIA intended to spend on the regulation of gaming and Internet censorship.
If the 2009/2010 appropriations are combined then Archives and the National Library will account for only 37.83% of the expenditure of the new larger department. Archives will be the poorest cousin, accounting for only 8.77% of the combined expenditure of the new and larger department. The irony of combining censorship functions with preserving and safeguarding the Milton collections in the Alexander Turnbull Library is clearly lost upon Wellington bureaucrats. “Milton! thou should’st be living at this hour!”
DIA is currently responsible for other votes, such as Local Government and Civil Defence. It is, therefore, ultimately responsible for the management of $548 million of public monies. Looked at in this context, Archives will account for only 4.92% of the larger base, and the National Library 16.48%.
There are currently 14 agencies and programmes that receive less than the $27.29 million allocated by Parliament for the cost of running the National Archives. They include Women’s Affairs, the Serious Fraud Office, and nearly $5 million for racing. If future proofing is so important why are these smaller agencies and programmes not being amalgamated or dispensed with first of all?
In any event, what evidence is there that being bigger makes an organization more sustainable? The Ombudsman spends $8.35 million per year, the Parliamentary Commissioner for the Environment spends $3.25 million, and the Serious Fraud Office was given $7.88 million for the 2009/2010 financial year. Are these organizations not sustainable? Is it really being claimed that the constitutional role of the Ombudsman is not, and will not be, sustainable in the long term, or even the short term? On the contrary, arguments can easily be made that bigger organisational structures bring with them more bureaucracy, higher monitoring and control costs, and reduced flexibility in responding to public or client need.
“Future proofing”, even if it is possible, and even if we know what it means, is only relevant if the activities and functions of those agencies being amalgamated have a significant degree of common function and activity.
Different purposes, different roles
National Archives and Libraries have different purposes and roles. Librarians organise and manage collections of books, manuscripts, and the relatively simple-to-organise private records of individuals and families. They rely on bibliographical type control according to author and subject. Archivists, on the other hand, organise public records, which are the product of Government activities. The arrangement and description of this material needs to be according to the structure and function of the agency that produced them, not author and subject. Furthermore, Libraries deal with one item at a time – a book, a manuscript – while Archives deal with a series of files – the final report and all of the files, correspondence, documents, and papers that led up to that report, submission, or decision. Therefore, expressed in very simple terms, we can say that Libraries deal with information, while Archives deal with evidence.
Not only are the purposes, principles and practices of Archives and Libraries fundamentally different, so too is the technology that they rely upon, or can be expected to rely upon in the future.
Digitisation seems to be a critical driver of the amalgamation proposal. The Canadian experience, where Archives and the National Library have been merged, shows that only a small proportion of the Archives and Libraries holdings, including finding aids have been, or will be, digitised. As a consequence, a website will never become a portal to the whole collections, but merely a useful tool for planning an on-site visit, and even that may be no longer possible in the future. In Canada, the obsession with digitisation has led to proposals for major cuts to on-site access for readers and researchers, who are dismissed as an elite, their interests decidedly subordinate to the great cyber audience in schools and retirement villages. In New Zealand, considerable concern has already been raised about the dangers of the Te Papa-isation of the National Library.
While new digital strategies are necessary to collect records that are “born digital”, the necessary resources will continue to be required to allow true access to centuries of records that are not digital and never will be. Digitisation, therefore, is not and never will be, the prime driver of research libraries, such as the Alexander Turnbull Library, or national archives. Furthermore, even with the advent of records that are “born digital” it will be a very long time before information “held within the online domain” predominates over that which is not within that domain.
For those records where digitisation is relevant there are two critical issues. The first is the cost of digitisation. Funding will determine the rate of progress in adopting digitisation. There is nothing in the proposed amalgamation which promises increased funding. Indeed, the justification for the present proposal is largely the belief that it will generate cost savings and, over time, reduced demands on the public finances. There is no guarantee, therefore, that even the current rate of adoption of digitisation can be maintained, let alone increased.
The second issue is one that the literature calls “the elephant in the room” or “the dark underbelly”, which is the cost of the long-term preservation of digital works. The 2008 Archives New Zealand Briefing for the Minister Responsible for Archives New Zealand identified the following problems associated with Digitisation:
- Electronic storage media can quickly become obsolete
- Electronic systems and formats change frequently and information
- can be “left behind.” The last survey of government agencies by Archives New Zealand “found that 53 percent held information that they could no longer access.”
- Electronic information is more easily manipulated and altered, which can lead to uncertainty over the authenticity of documents. (page 7).
All the literature emphasises that a guaranteed budget for preservation is, therefore, essential, but this is all too often neglected in the enthusiasm to get runs on the digitisation board. The experts are agreed that it is very difficult to accurately forecast the cost of preservation because there are so many variables. They all agree, however, that after 3-5 years of the creation of digital records, and definitely before 10 years are up, there is the need to spend big on preservation. The longer you delay, the greater the risks of loss of quality and content, and the greater the costs. The guesses are that between 30% and 100% of the initial investment in creating digital records needs to be spent within 10 years to preserve the records for the next ten 10 years, and so on ad infinitum.
As the digital files grow in size, so do the costs of preservation. Most of these costs are in management of the digital files, and that means skilled staff. With the current clamp on government expenditure, and a projection of extended fiscal constraint, the National Library and Archives New Zealand will have to be either very, very persuasive to get additional funding, or they will have to make savings by trimming existing services, or cutting back on digitisation. You can have digitisation, or you can have cost savings, but you can’t have both. And with digitisation you get spiralling costs.
Current Spending on Digitisation
The National Library “Briefing for the Minister Responsible for the National Library (November 2008)” says that while the National Library is currently digitising its collections, “this is a considerable undertaking and will require significant new investment to complete. Without further investment, based on the Library’s current ability to apply resources to this area, it would take more than 100 years to complete the digitisation of the Library’s current collections, excluding annual growth/acquisitions in these collections.”(page 17)
The annual digitisation of the National Library’s collection, “in order to make them available on-line more widely, is currently less than 0.01% per year.”(page 12)
In 2009/10 the Alexander Turnbull Library, the largest component of the National Library system, spent less than $650,000 on digitisation, which is less than 1% of its total spending.
Archives New Zealand also spends very little on digitisation. According to an analysis of the funding of Archives New Zealand, obtained in April 2010 under the Official Information Act 1982, in 2005/06, Archives was given $532,000 for Digitisation and each year since then it has been given a further $156,000 to spend. At 1% of baseline spending, and one half of one per cent of total yearly expenditure, digitisation does not seem to be an important programme for Archives, and the expenditure it involves is certainly not at a level that mandates the amalgamation of Archives into DIA in order to make the fruits of digitisation more widely available to New Zealanders.
The Archives New Zealand 2008 Briefing Paper acknowledges that their paper storage obligations will continue to grow since they acquire records 10 to 20 years after they were created, which means that digitisation even if it were to be expanded significantly, will not have any real impact on systems and the physical archive for at least another 20 years. Their repositories they said were at or near capacity, and future demand for storage was growing, and will grow significantly, particularly with the transfer of over 20,000 linear metres of Land Information New Zealand records to the Archives by 2013.
But the Cabinet Paper ignores the current low level of spending, the possible high level of future costs, and the problems that come with digitisation and uses the supposed benefits of digitisation, which it does not define or explain, to drive and justify the amalgamation proposal.
Technology and the Corporate Platform
Since the purposes, processes and practices of Archives and Libraries are so different, it is extremely important that both Archives New Zealand and the National Library are able to control the IT processes and platforms that they use, in order that they can control the nature and effectiveness of the services that they provide.
In Canada the creation of a single unified platform has not worked because the technical challenges are huge – the integration of the different classification systems, the different type of material being classified and the work practices of the different professionals (Librarians and Archivists) are not easy to achieve. Just because both archivists and librarians collect material and (at some stage) make it available to the public does not mean that they have much in common.
Under the amalgamation proposal the very real danger is that the IT requirements of Archives New Zealand and the National Library and the Alexander Turnbull Library will be fitted into those of the DIA, or the systems that the DIA has developed, so that the digitisation programme ends up damaging the activities of both Archives, the National Library and the Turnbull, rather than supporting them. In addition, relating the Archives and Library digitisation requirements to the IT platforms and programmes offered by DIA, prevents either of the agencies from outsourcing, or developing more relevant platforms and programmes, or acquiring new platforms that are currently offered in the marketplace, or that will be developed by the market in the future. More importantly, what information is available to the public may end up being determined not by their need or interest, but by the limitations of the digital technology relied upon by the agency that is ultimately in charge of the platforms of Archives and Library.
The National Library can develop more relevant platforms and programmes. The Minister responsible for Archives New Zealand, the National Library and DIA in his speech opening the new National Digital Heritage Archive (NDHA) acknowledged that “It has been a collaborative effort between the National Library and international partners Ex Libris and Sun Microsystems. It is a good example of how a private and public partnership can deliver an innovative and world-class solution.
Already there has been overseas interest, and a number of sales including to the Singapore National Library and the Bavarian State Library.”
But in the rush to say hurrah for DIA’s capability in systems and platforms, this triumph seems to be ignored.
How feasible is a super platform?
The New Zealand state sector has a history of IT project failures, the $100 million-plus police INCIS endeavour being the most infamous. We have learnt the painful lesson that the more complex the project, the more likely it is to flounder, go over-budget, go over-time, fail to deliver on its promises and be difficult for users to operate.
In proposing the merger between the archives, the library and Internal Affairs, State Services Minister Tony Ryall has admitted there are no burning problems that need solving. Rather, the rationale is the desire to develop an overarching platform from which New Zealanders can access civic information.
Just how feasible is the Government’s dream of a unified civic information “super” platform? If it is not feasible, the IT project at the heart of this merger will almost certainly end up being yet another expensive government technology failure.
Otago University academics Robin Gauld and Shaun Goldfinch describe the biggest threat to the success of government IT projects as a “dangerous enthusiasm”, which causes managers to overstate the benefits of IT and blinkers them to potential problems. Some degree of failure – whether in terms of timeliness, budget, specifications or usability – may be the norm in large-scale IT projects. But dangerous enthusiasm for such projects, Gauld and Goldfinch assert, makes failure even more likely. Even good management oversight of IT projects is not sufficient, they argue, to overcome the problems created by this enthusiasm.
In the broader context of platforms and programmes, a very recent report by the Centre for Technology Policy Research at the London School of Economics is highly relevant. In reviewing the British Government’s ambitious Transformational Government plans to use IT to transform how citizens and government agencies interact, the report concluded that:
- It was difficult to find any compelling examples of direct productivity gains and improved public services
- Transformational Government was driven by the “chimera” of theoretical operational efficiency savings
- Transformational Government was an anachronistic and ultimately ineffective approach
- It used out-dated, 20th-century approaches of imposed command and control enabled by large central databases
- It distracted government from its own policy aspirations and ignored where the technology of the internet age was heading – towards more localised, autonomous, distributed and consumer-responsive services built around common technical standards rather than common platforms.
The Cabinet paper asserts that the amalgamation will result in improvement of current systems through the sharing of each agency’s technologies, but it provides no evidence to support this claim. Similarly, it reports that DIA estimates that efficiencies in ICT functions and elimination of back-office duplication will deliver financial efficiencies of $3-9 million over three years, but with one-off transition costs of $2.5 million in the first year. If the savings are only $3 million, then the net benefits will only be $500,000, or $166,000 each year. In the broader context of total yearly government expenditure of $60 billion, $166,000 is hardly significant or noticeable, even if the promised gains are achieved.
But again, beyond these estimates, no real evidence to support or substantiate the possible savings, or the limitation on costs, is provided. In addition, the claim that the transition costs for Archives and the National Library will only occur in the first year and not later years, is very hard to accept.
Similarly, the assertion that DIA is a trusted custodian of New Zealanders’ records and information because of its responsibilities in identity services has little probative value since the records of Birth, Deaths and Marriage are fundamentally different in nature, form and purpose from the records of constitutional government, and the literature of the Western Pacific in which the Alexander Turnbull Library, for example, specialises.
The Changing Nature of the Estimated Cost Savings
Since the release of the Cabinet paper, the nature and associated details of the cost savings that have been used to both initiate and justify the amalgamation proposals, have undergone major change.
The Cabinet paper estimated the ongoing cost savings from the three amalgamations to be “at least $16 million over three years and up to $25 million over 3 years” (paragraph 75). The fact that cost savings were at the heart of the Government’s amalgamations proposals was made clear by the Minister’s press release of 29 March in which he announced the proposed amalgamations and the public release of the Cabinet Paper. He said: “These changes are part of the Government’s ongoing programme to reduce duplication and operational costs, and ensure we have stronger government agencies delivering better public services in the future. We are expecting to save up to an estimated $20 million over the next three years including a reduction in staff numbers of up to 55 full time jobs.”
Two months later, in a submission to the Cabinet Domestic Policy Committee on 21 May 2010, dealing with the Legislative and Financial Implications of the proposed amalgamations, the Minister began to back away from the central focus upon the cost savings objective. He now claimed that “fiscal savings were not the primary rationale put forward for any of the amalgamations.” He was, however, more confident about the financial dimensions of the amalgamations since he now expected them, once they were completed, to “yield savings in the order of $25 million or greater” over the four year period to 2013/2014. To help limit the effect of the change in the time horizon from three years to four years, he introduced a new claim that cost savings would be ongoing and would be “approximately $8 million per annum thereafter”(paragraph 45). In eight weeks, therefore, total cost savings from the amalgamations went from being unknown, to $16 million, then $20 million, then greater than $25 million, with an ongoing $8 million each year into the future.
The Minister has also sought to cover his tracks and avoid the charges that the estimated cost savings were too small to justify the Archives, Library and DIA amalgamation. Where the earlier Cabinet paper had identified cost savings for each individual amalgamation, the Minister’s new paper only identified savings for the amalgamations as a whole. As part of the implementation process, the agencies involved and the Treasury were directed to prepare more accurate estimates of the costs and savings of each amalgamation.
At the beginning of June, the Minister seemed to have another change of mind about the importance of cost savings. In a six paragraph press release on 1 June, dealing with the changes intended “to drive improved sector performance”, he devoted four paragraphs to announcing the fact that Cabinet had on 26 May approved the details of the individual amalgamations, one paragraph to the maintenance of the independence of the Chief Archivist and the Turnbull Library, and the concluding paragraph to the cost savings that would flow from the amalgamations. These were now, he said, of the order of “$25 million or greater” per annum. Most significantly, nothing was said about improved services, future-proofing, digitisation, or technological benefits. Only cost savings were deemed worthy of mention.
A similar theme emerged in the speeches of Nathan Guy, the Minister for all three agencies involved in the Archives/Library/DIA amalgamation. In a speech at the event celebrating the 90th Anniversary of the Alexander Turnbull Library, and in a speech opening the National Library’s new Auckland centre, he repeated his belief that the three agencies shared natural synergies, but he did not identify them. In both speeches he claimed that the integration would allow the “sharing of back office costs.” Most importantly, he said in both speeches, that integration “will generate millions of dollars a year in savings, all of which will be redirected into better frontline services for the public.”
For something that is not the “primary” or “main” reason for change, cost savings have, nevertheless, seemed to exercise the minds of Ministers a good deal.
Statutory Independence and Functions
The fundamental purpose of Archives is to preserve the record of Government. That purpose is a constitutional, not an academic one. Archives are not subordinate to the needs of present day historians, nor are they simply part of our “heritage”. They are a living part of the law and the Constitution.
The 1985 UNESCO Guidelines confirmed the constitutional significance of Archives and identified the importance of the institutional autonomy of the Archives agency and a positioning within government that prevented the agency’s submission to other interests or the blurring of functions with those of other agencies, and the possibility of interference “under the colour of co-ordination authority.”
As a result of the proposed amalgamation, the Secretary of Internal Affairs would be legally accountable to the Chief Archivist for the stewardship of public records, and would also be that official’s controlling officer. Statutory independence, therefore, would be capable of being undermined by hierarchical authority, or the denial of permission to speak or publicly report on matters that fall within their statutory independence, and the possible diversion of funds to other parts of the DIA empire by a wide variety of means and methods when fiscal pressures and constraints are imposed. There are examples of each of these issues within recent New Zealand history and DIA history in particular.
As head of Archives New Zealand, the Chief Archivist makes an Annual Report to Parliament, so they have a public platform in which to maintain a public dialogue about the nature and purpose of Archives, and the triumphs and difficulties they face. As a second, or maybe third tier manager in the New DIA, the Chief Archivist would not have that platform, and could be prevented from speaking in public.
The Cabinet Paper, however, claims that the need to maintain the independence of the Chief Archivist does not necessitate retaining a separate Archives department. “It is quite clear that continuing with a stand-alone Archives department is not necessary. Advice from Crown Law confirms this both in terms of public management principles and previous judicial rulings on the matter” (Paragraph 43).
But absolutely no evidence to support these remarkable sentences is provided, neither is there reasoned argument that judicial observations, which supported the separation of DIA and Archives in the late 1990’s, are wrong or misplaced. More importantly, the Crown Law opinion, obtained under the Official Information Act 1982, makes no reference to “public management principles” and neither does the letter of instruction from the SSC to the Solicitor-General. Public policy in New Zealand it seems is now to be reduced to assertion, and false and misleading claims, not argument or evidence. But even if the consequential claim that public management principles do not require a stand alone Archives is taken at face value, then all that the assertion shows is that different legal forms for the Archives are possible, not that the present legal structure needs to be changed.
It is also worth noting that the Crown Law opinion was sought on 9 March, provided on 11 March, and reference to it included in the Cabinet Paper by 18 March. In their written opinion Crown Law twice expressed concern about the rush that the SSC was in. This concern for speed is all the more surprising given the earlier submission on 3 March 2010, by the Minister of State Services to the Cabinet Business Committee, which acknowledged that the amalgamation proposal “is not intended to address a burning problem.” (Paragraph 148) And it is even more concerning given the frank acknowledgement that “A recent performance analysis of DIA found that there are limits to what can be absorbed within the existing structure.” (Paragraph 139)
The Crown Law opinion also goes on to express concern that the proposed amendments to the Public Records Act 2005 would make the Chief Archivist “accountable to the Chief Executive of DIA for the exercise of his or her functions and powers.” But no hint of this troubling development, or the way in which it would undercut existing safeguards, or the concern of Crown Law on two other matters, is to be found in the Cabinet Paper.
Despite the concerns of Crown Law, the Minister announced on June 1, 2010, that the Cabinet has approved the legislative changes to the Public Records Act and that the Chief Archivist will be “responsible to the Chief Executive of the new Department”. The position, however, “will be protected from any improper influence” in the performance of duties. This is important, the Minister says, “to maintain the principle of an independent check on government recordkeeping”. Since the devil is in the detail, the protection provided will, at a minimum, need to ensure that the Chief Archivist has powers to ensure compliance with their rulings, and funds to give effect to actions taken to ensure compliance, as well as protections against directions by the DIA Chief Executive not to take legal actions to enforce compliance. The protections against “improper influence” will also need to allow the Chief Archivist to publicly identify and complain if there are attempts to use “improper influence.”
In addition, the Archives Council and the Guardians of the Turnbull will need to be given powers to compel information to be made available to them if they require it for the performance of their functions. Such a power, for example, is fundamental to the effective performance of the duties and responsibilities of a public company auditor.
Fixed Costs / Overhead Costs / Economies of Scale
It is claimed in the Cabinet paper that future-proofing the long term delivery of government services requires amalgamations in order that small to medium sized agencies with relatively high fixed costs can operate off more sustainable, lower cost corporate platforms. It is also claimed that the amalgamation of Archives New Zealand and the National Library with the DIA will result in “lower corporate overheads (fewer senior mangers and shared corporate services” (Paragraph 45). Finally, it is claimed that economies of scale will occur and can be achieved if the amalgamation goes ahead.
Fixed costs and overheads are different things. A cost can be an overhead, but it need not be fixed. Similarly a cost can be fixed, but it need not be an overhead. Throw in economies of scale, which would occur if overheads of a small agency were to be related to the cost structure of a larger department, even if the overheads of the smaller agency were not actually reduced, and you are on a very slippery conceptual and Alice in Wonderland slope. In any event, no evidence is provided as to the level of the supposedly “relatively high fixed costs.” If they are so important in the scheme of things one would have expected that the amount and level of these costs would have been quantified and trumpeted to the world. But they are not!
More importantly, these claims are confused and contradictory of the claims that statutory functions will be maintained. Fixed costs, for example, are fixed. They do not vary with volume, or time, or agency delivering the service. They are fixed! The only way that they can be reduced is by removing, or fundamentally changing, the service or activity, that gives rise to the cost. Since it is the statutory functions that make up the largest component and key elements of the fixed costs, it is essentially only by cutting or eliminating these statutory functions, and the senior managers who perform and who are necessarily responsible for the statutory functions, that these costs can be reduced. This will require complex law changes, possibly upsetting or overturning long established constitutional provisions, conventions, and safeguards. But if the statutory functions and safeguards are to be maintained then it is unlikely that savings can be made in fixed costs and or overheads.
Another possibility for reducing overheads is the currently fashionable idea of sharing backroom services, such as human relations and payroll. But it is not necessary to amalgamate agencies to achieve such savings, even if they do exist. The same end can be met by purchase agreements for such services between agencies, or with outside suppliers, particularly when decisions about what to purchase, and where to purchase it from, are left to the CEOs of the purchasing agency, who ought to be in the best position to know just what it is that they need. The Cabinet paper expressly acknowledged this point by saying that the integration of back office functions should only occur for small agencies “where it makes sense.” (Paragraph 6). Since there are 28 departments and programmes, out of a total 69 that were funded in the 2009/2010 fiscal year, that are smaller than the National Library, and 16 departments and programmes smaller than Archives New Zealand, it is hard to accept that either are small agencies for whom outsourcing of some back room functions will not be a more cost effective and realistic outcome than amalgamation.
Future Cost Savings?
In announcing the amalgamations the Minister for State Services said that “These changes are part of the Government’s ongoing programme to reduce duplication and operational costs…” The latest budget provides clear evidence of the Government’s intent and priorities. The appropriation for outputs to be produced by Archives New Zealand has been reduced by 1.8% compared with the current year. Likewise, the appropriation for the outputs of the National Library has been reduced by 5.31%, or nearly $4 million, when compared with the current year, and the forecast for spending in three years time, in the 2013/2014 year, is expected to remain below the spending in the current 2009/2010 fiscal year. The DIA, on the other hand, has received a boost of 2.12% in its appropriation, and its spending on its present pre-amalgamation functions and services is expected to increase by over 17% by 2013/2014.
The Government announced, on 1 June 2010, that they are providing $12.6 million for operating and capital expenditure, over four years, for the development of a Government Digital Archive (GDA), with $9.7 million going to Archives New Zealand and the remainder to the National Library. Of the Archives New Zealand allocation however, only $276,000 will be spent in the coming year, and it is already included in the reduced appropriation for the Archives major output class – ‘National Archival Services’. In the same period they will be spending a further $1.7 million on capital expenditure associated with the GDA.
To put these financial changes in government spending in context, it should be noted that total spending on the outputs of all Government departments, agencies and programmes is budgeted to increase by 5.62% in the coming year when compared with the current year. Cost savings, however, are to be the order of the day throughout the government sector over the next three years, with total output spending in 2013/2014 expected to remain below the spending budgeted for the coming year.
You can have digitisation, or you can have cost savings, but you can’t have both. Given the spending plans revealed in the new budget the Government it seems has voted for cost savings, but it still refuses to give way on the rhetoric of digitisation and the justification that it supposedly provides for the amalgamation of Archives New Zealand and the National Library into the DIA.
It is claimed in the March Cabinet paper that “future-proofing” the long term delivery of government services requires amalgamations in order that small to medium sized agencies can operate off more sustainable, lower cost corporate platforms.
But no evidence is provided that being bigger makes an organization more sustainable, or more effective. On the contrary, arguments can easily be made that bigger organisational structures bring with them more bureaucracy, higher monitoring and control costs, and reduced flexibility in responding to public or client need.
In this context, the results of the regular Treasury evaluation of management and internal control systems within government departments – “Departmental Internal Control Evaluation (DICE)” – make for interesting reading. The DICE report, which until 2009 was published as a Treasury Circular, provides a systematic snapshot each year of financial management controls and processes across government departments.
The most recent report, which has now become an internal Treasury briefing paper rather than a Circular, shows that in 2009, 45 departments were independently audited and ranked on a five point scale. In 2002, five departments were ranked as needing improvement, but by 2009 all departments were ranked as either “Good” or “Excellent.”
The latest ranking shows that only two departments – the Office of the Ombudsman and the Office of the Controller and Auditor-General – received an “excellent” rating. The Ombudsman has received an “excellent” rating in seven of the last eight years, while the Auditor-General could only manage an “excellent” rating in five of those years. The Ombudsman, it must be noted, is a small agency spending only $8.35 million per year, and the Auditor-General spends less than half the monies appropriated by Parliament for DIA.
DIA, Archives New Zealand and the National Library were ranked as “Good” and all scored well, being comfortably above the mean for all departments over the last five years. Only three departments that spend more than the $90 million spent by the National Library, have scored higher than Archives New Zealand and the National Library over the last five years. In other words, over the last five years, bigger departments have been less effective in managerial terms than the two “small to medium sized” agencies that are being amalgamated in order to improve their managerial effectiveness.
An example of a bigger department scoring badly is provided by the Department of Labour. Currently, Labour is the responsible department for at least two separate Votes – Labour, and Immigration. Together the Votes amount to $314 million, slightly more than the combined votes for DIA, Archives and National Library. The DICE score for Labour, however, is materially below the individual scores for the three agencies over the last five years, and has been below the mean for all 45 departments in each of the last five years. A case, perhaps, of size and complexity, leading not to sustainability and lower costs, but to inefficiencies, higher costs and a decline in effectiveness.
The Control Departments
With the exception of The Treasury, Departments that are at the centre of the New Zealand government system do not score well on the DICE evaluation.
The author of the amalgamation proposal, the State Services Commission, for example, spends more than twice as much as the National Library each year, but is ranked well below DIA, Archives and the National Library in terms of DICE scores, having scored significantly below the mean for all 45 departments, in each of the last five years. In fact, its score has declined over the last three years and its score for 2009 is now below the score that it achieved five years before. If there is to be a next step in “Improving State Services Performance” perhaps it ought to be undertaken at the State Services Commission first of all!
The Department of Prime Minister and Cabinet spends slightly more than Archives New Zealand each year, but has scored below the mean for all departments in each of the last five years. Crown Law, which spends two and half times the amount spent by Archives, has managed to score above the mean for all departments in only one of the last five years, but was nevertheless able to be quoted in the Cabinet Paper as an authority on “public management principles.” Parliamentary Services, the department that looks after the needs of MP’s, ranks 30th out of 45 departments and has scored significantly below the mean for all departments in each of the last five years.
A Glimpse into the Future?
The Department of Internal Affairs, on the other hand, may provide an interesting glimpse into the future. If the DIA, Archives and Library amalgamation does go ahead one imagines that Archives and Library will still be in receipt of separate parliamentary appropriations, otherwise the promise of maintaining the current safeguards made by the Minister responsible for all three departments, and who is not a member of the Cabinet, won’t really mean anything. Money can be moved around within a Vote to some degree, but not between Votes, so a separate Vote would give some protection to Archives New Zealand and the National Library even if the CEO of DIA sought to fully integrate them within the management structure of DIA, or to play overhead recovery games as a way of shifting monies between business units as the DIA did in order to pay for the CEO’s change programme in the 1990’s.
DIA has seemingly managed five separate Votes quite successfully for some time and has scored well in DICE evaluations over the years, so other agencies, it is suggested, such as the Ministry for Culture and Heritage, could also be added to the DIA pot, in the not too distant future.
The idea that all we are dealing with is “information” pervades the Cabinet paper. Therefore, Land Information and Statistics are seen in some quarters as future candidates for the DIA stew, all in the name of making financial savings in back office functions. But thinking along these lines suggests that the ultimate answer is to turn back the clock, reverse the reforms of the previous twenty-five years, and reimpose centralisation and central control throughout the state sector.
The earlier paper to the Cabinet Business Committee says that the thrust of the proposal is to improve service delivery “through the more effective management, custody and use of civic information…”(Paragraph 149). Ultimately, the fragmentation of the agencies involved in managing civic information is seen as impinging upon “the ability of New Zealanders to derive full value from the government’s ownership and custody of information and reduce the potential to derive economic benefit from use of the information.” (Paragraph 151). The Katherine Mansfield scholar working away on papers in the Alexander Turnbull Library collections is unlikely to agree that they are merely playing with items of civic information! Likewise, the donors of the Ngata papers, for example, and other Taonga, to the Turnbull, are unlikely to agree that they are merely items of civic information, and, that as such, they are available for commercial exploitation by the DIA and Government.
Since the publication of the Cabinet paper the Minister responsible for the DIA and for Archives New Zealand and the National Library, who is a Minister outside Cabinet, has been at pains to assure stakeholders that present statutory functions and safeguards will be maintained even while cost savings and economies of scale will be achieved. There is a significant element of political spin and sophistry about the later claim. Spreading the same fixed costs/overheads over an expenditure base that is three or five times larger will inevitably give the appearance of economies of scale. In fact, overheads could increase due to higher coordination costs, but the appearance of economies of scale would still be maintained.
The Cabinet Paper acknowledges that there is, and will be, considerable stakeholder concern about the amalgamation proposal, particularly that the independence of the Chief Archivist, and archival practice, will be undermined, or that the separate status of the Alexander Turnbull Library will be threatened. Furthermore, the paper acknowledges that even by taking steps such as preserving current legislative provisions and mechanisms such as the Archives Council “it is unlikely that mitigation of risk in these ways will allay a level of publicly expressed concern.” (Paragraph 47).
But the paper is also silent on some of the crucial safeguards. Archives New Zealand and the National Library, as independent government departments, receive a separate vote from Parliament. Will this also be the case in a new super DIA? The issue is important simply because under the Public Finance Act 1989 monies can be moved around within a Vote and transferred between output classes within a Vote provided they do not exceed 5% of the output class, but monies cannot be transferred between Votes. Having a separate Vote, therefore, is both a source of financial independence and a financial safeguard for the agency as well as a reinforcement of Parliamentary and Ministerial control over the financial affairs of the agency. But the Cabinet paper is silent on the matter, as is the recent information sheet from the Chief Executives of the affected agencies that purports to answer criticisms of the proposal.
Despite the doubts over safeguards, the bureaucrats responsible for the Cabinet paper are nevertheless content to repeat the mantra that amalgamation will future-proof functions, provide for financial efficiencies, and will improve effectiveness, and, therefore, should be implemented.
Both the Minister, and the CEO’s of the three agencies in particular, who are in charge of the implementation process, have stressed that they “will continue to listen to stakeholders” and will “continue to seek input from stakeholders.” As late as 20 May 2010 they were saying that they “will continue… to listen…” Likewise a submission by the Minister of State Services to the Cabinet Domestic Policy Committee, dated 21 May 2010, notes “that ongoing consultation with stakeholders will occur, including through the Select Committee process.” (Paragraph 30)
But this attempt to suggest that public consultation is occurring, and will continue to occur, is both misleading and a sham. In the leading case on the matter, the Court of Appeal makes it clear that consultation requires an open mind, good faith and does not occur if the decision maker has predetermined intentions. The Submission of 21 May and the announcements by the Minister on 1 June 2010 make it clear that Government had already decided some time ago that the mergers should go ahead. Legislation to implement them, it is now said, will be introduced shortly. In other words, the matter had been predetermined and, therefore, past and future public consultation, or listening, has been and will be, a charade.
On the other hand, the good news is that the Minister responsible for the three agencies, in his press release of 1 June 2010, has announced that “Separate Budget votes and Ministerial roles will continue.” But the question of how long they will continue for has been left unanswered.
Given that the proposal is likely to generate considerable political and stakeholder opposition, it is not clear why the government would wish to spend its political capital in this way, particularly for short term cost savings that may amount to only $166,000, each year for three years, while accepting significant and ongoing cost increases over the medium and long term. In addition, given the poor history of government IT projects in New Zealand, fully documented and analysed in the 2000 report by the Auditor-General, it is also surprising that the government is prepared to nail its colours to a new project that may not work, will not be fit for purpose even if it does, and which will most likely suffer significant cost over-runs. And it is all the more surprising given the delight of the government in the public private partnership that has led to the establishment of the National Digital Heritage Archive.
The Minister acknowledges that Archives New Zealand and the National Library are “important cultural institutions.” What does it say of New Zealand that their independent identities are to be lost and subsumed into a department that is responsible for:
- administering civil unions
- ensuring gambling is fair, legal and honest
- enforcing censorship law
- supervising anti-money laundering and countering financing of terrorism
- implementing dog control legislation and dog safety campaigns
- providing services to Ministers of the Crown including monitoring the use of their credit cards
- issuing passports, and
- is home to the Office of Ethnic Affairs and the Ministry of Civil Defence.
To the extent that the proposal is anchored in bureaucratic games, it suggests that the amalgamation proposal is ultimately a cruel combination of ideological policy, and a naïve belief in the wondrous powers of technology. It is certainly not a proposal designed to obtain synergies, since there are none identified in the cabinet papers. In the final analysis, the Cabinet paper seeks to identify a technological and financial problem, but proposes a constitutional solution.
Perhaps the origin of the proposal is but a reflection of the point recently made by Brian Easton, that at some stage in the political cycle governments start following officials’ agendas that make no political sense but which meet some administrative need. But then what is the administrative need?