Statement on Public Administration Policy 2001

Statement to the Storting
by Minister of Labour and Government Administration
Jørgen H. Kosmo

on 10 May 2001

INTRODUCTION

The government will renew, increase the efficiency of and reorganise the public administration to make it more responsive to the needs of the population and better able to promote socio-economic considerations.

This is not to say that the public sector is of low quality or unable to do the job assigned to it. However, the public sector faces major challenges. Four of the most important ones are:

• new technological opportunities,
• a tight labour market,
• more competent and demanding public service users,
• and calls for more effective use of our resources.

I would go so far as to say that if we fail to tackle these challenges, the basis for the public welfare system would be in jeopardy.

The public sector is the welfare state's platform in Norway, and plays a highly important role in distribution policy. The challenges facing the public sector require an ability and will to perform its tasks in fundamentally new ways. The situation necessitates courage to question established truths and yesterday's solutions. At the same time we want the public sector to be at the forefront and to set its stamp on the evolution of society. Not to lag behind, as is regrettably the case in a number of areas today.

I will take this opportunity to review the main features of public administration policy - what the challenges entail, what should be done, and what steps have already been taken. In other words, I will review the renewal of the public sector.

In the first place, public sector enterprises - ranging from day care centres and schools to hospitals and nursing homes - are labour-intensive. We are therefore reliant on many "wise heads and busy hands", to borrow an expression from the Prime Minister. This is a challenge today, and we know that it will be an even bigger challenge in the years ahead. We also know that in the past 20 years the public sector workforce has risen by an average of 37 - each day. If this growth continues, even if only approximately, the public sector will have to take on the great majority of labour market entrants over the coming decade. Clearly, as most people realise, this won't work. We need to set the stage for a greater effort in those areas where the needs are greatest.

The post-war baby boomer generation is nearing retirement, which will necessitate increased public financial provision for retirement pensions, sickpay and disability benefits. As a result, the need for public services, and therefore the need for labour, will increase.

Just as important as the hard facts on the need for capital and labour are the attitudes and expectations that most people have with regard to the welfare state in general and the public sector in particular. Both as taxpayers and public service users, the population makes greater demands today than previously. People want to be perceived as individuals and they want public services to be better adapted to the individual's needs.

Thus the situation facing us today is not one from which we can extricate ourselves by decision-making. Rather, it calls for wide-ranging changes in the system - which in turn requires a simultaneous effort in several areas.

• First, it is absolutely necessary to seek to ensure that the public administration, and particularly service production, will be better geared to public service users' needs and wishes. The catchwords are quality, flexibility and accessibility.
• Second, we need to focus on making better use of resources in the public sector. We must transfer resources from administration to service provision, and from sectors with diminishing needs to sectors with growing needs.
• Third, greater weight must be given to more effective and flexible solutions, improved division of responsibilities and, not least, increased autonomy at all levels of the public sector. We need to simplify rules, but also to address the systems that produce these rules.

The Government has initiated a major effort to achieve its objectives. The action plan Step by Step presents nine reforms aimed at modernising the public sector and sets out plans for their implementation. But, above all, it profiles what results public service users can expect from the programme. More than 400 initiatives are now embodied in the programme. Some add up to major reforms, e.g. in the hospital, education and armed forces sectors. Other are smaller-scale, such as manager evaluation in the civil service or arranging to simplify routines for dealing with applications for building permission or for booking vehicle inspection via the Internet. Whether minor or major, they are all important building blocks in the effort to renew the public sector.

I will devote the remainder of this statement to describing some of the reforms. I will give special attention to the political challenges. For a complete overview of the initiatives, please refer to the action plan.

USERS AT CENTRE-STAGE

User participation

The Government wishes to put the users of public services at centre-stage. This involves laying the basis for user participation, offering flexible solutions, taking individual needs into account, and coming across as reasonable and accommodating in dealing with ordinary people. Free choice of hospital is a good example. Here priority is given to the user and not the institution or the needs of the employees. This does not mean that we will not be taking the employees into account, which I will be commenting on later. It means that user needs and interests, rather than professional interests or the needs of employees, will govern the way a public service is organised and arranged.

Coordination and reorganisation

We need to collaborate better in the interest of public service users. User orientation is not just the concern of those sitting behind counters or answering telephones, i.e. in the first line. User orientation involves the entire undertaking - the entire social security administration from the ministry down to the smallest social security office.

Good user-orientation requires improved coordination across the public administration. Most people do not think of a public administration compartmentalised into sectors and levels - although to those of us working in government this may seem to be a practical arrangement. To most people the public sector is a single undertaking - and they expect it to come across as such. To them there is no logic in the fact that that the social security office is state-run while the social welfare office is municipal.

Improved cooperation and coordination between public agencies is imperative as a matter of respect for the public service user. One-stop shops (which offer one common counter and one telephone number to public services) is a good example of coordination between public agencies.

Other examples of coordination and reorganisation include strengthening the county governor's role as a guarantor of legal safeguards. We are reviewing the regional arm of the state administration in a move to improve efficiency and effectiveness. We need, however, to ensure that efficiency improvements are not achieved at the expense of legal safeguards, which in many cases are protected precisely by the availability of an extra, independent assessment.

The number of state agencies at the regional level will be reduced. Moreover, state agencies need to coordinate their activities to a greater degree to ensure that central government policy towards the general public, business and industry and the local government sector comes across as more coherent than is the case today.

Similarly we will do more to site central government agencies at the same location, and to assemble the central government's regional operations in the same organisational entity. This will produce both professional and administrative gains.

State supervisory bodies

Currently about 50 state administrative agencies are engaged in supervision across about 230 supervisory schemes. Allow me to emphasise that supervision, not least safety-related supervision, is important and necessary. But we have to ask ourselves whether such a large number of agencies and schemes makes sense. Can coordination of supervised entities be improved? Could we amalgamate supervisory agencies in kindred areas to create a broader-based supervisory capability and save on administrative resources?

At the same time we should ask ourselves whether the organisation of state supervision of safety-related matters entails a detrimental mixing of roles: Should such supervision be organised on a sector-neutral basis so as to secure public confidence in its independence? The government will consider introducing a more coordinated and effective administrative structure in the supervisory sphere, particularly in relation to safety.

A twenty-four hour public administration

Because the public administration performs so many tasks and has so many groups of users, it needs a variety of communication channels. Further channels are needed - depending on what is to be communicated and to whom. Internet solutions, telephony services and public service offices need to complement one another. These channels are therefore being further developed in parallel. In combination they will give us what we term a twenty-four-hour public administration. This does not mean that public sector employees will work round the clock, but that very many public services will be available regardless of opening hours. There will be no need to wait in a telephone queue for a public service employee whose sole mission is to take down routine details, obtain routine details or send a particular form. There should be automatic, round-the-clock routines for this kind of transaction, available whenever it suits the user.

The aim is to put the bulk of public service users' communication with government on an electronic footing by the end of 2003. This enables users to have applications processed or to notify information, for example submit income tax returns, via the Internet.

However, this will require a great deal of preparation by government agencies. Electronic administrative routines and systems enabling electronic service provision have to be put in place. Only when systems serving the general public are hooked up directly to internal sectoral and administrative systems that function across sectors and levels of public administration, will public service users and the administration reap all the potential fruits. In some areas solutions need to be put in place to guarantee safe data exchange that will give electronic documents the same legal weight as paper-based documents. To achieve this, public institutions will need to adapt their internal communication, rules, routines and work modes.

And for those who won't be using PCs or other new aids, the one-stop shops will be ready to help - which is one of the reasons why they are so important. In other words, there is no question of establishing facilities or services which exclude groups of the population. All services will be available, although the channels vary!

IMPROVED RESOURCE USE

The second important focus of public administration policy is linked to the need to make better use of the resources at the disposal of the public sector - whether these resources are financial or human. We need to create more welfare for the money spent.

A critical look at how public sector enterprises deal with the tasks assigned to them is necessary and crucial in this context.

One example is the police service, which is undergoing reorganisation. It goes without saying that a regional structure that is more than 100 years old is poorly geared to today's needs. Hence the reorganisation. We will be devoting fewer resources to administration and correspondingly more to operative and other services targeted at the public. An extra 400 police officers will be assigned to active police work, where they are most needed.

Another example is the armed forces. Better equipment and training will be provided, and a military capability better adapted to the new security policy situation will be developed. Manpower will be cut by about 5000, although there is no question of employees being made redundant on that count. Armed forces personnel are highly competent and their skills can be turned to account in many other areas of society. That is in itself one reason why the reorganisation is so important. And it is the reason why we are willing to employ a range of instruments to ensure that as many affected personnel as possible can apply their skills in other areas.

We will review the need for coordination and reorganisation of the public administration at the central level. By way of example, 11 of the agencies under the Ministry of Health and Social Affairs will be absorbed into three new agencies. We will also be looking into other possibilities for amalgamating and simplifying the directorate structure. In my own sphere of responsibility, Statskonsult (the Directorate of Public Management) will be merged with the Norwegian Central Information Service to create a more incisive directorate charged with developing the public administration, inter alia in light of the rapid evolution of information technology. We are certain that unifying the two institutions and their expertise in a single organisation will produce mutually enriching gains.

If the ministries are to have the time and opportunity to concentrate on primary tasks, they need to be relieved of other tasks. We will promote greater use of cross-government administrative solutions and support functions. Since the ministries are relatively small entities, there is much to be gained by having one agency perform functions common to all of them. The Government Administrative Services will be assigned an important role in this effort.

Each central government agency needs to be more innovative and to seek untraditional organising solutions. Proactive use of IT solutions is important. Setting up Aetat's (Directorate of Labour's) central wage payment system and central operating and support system in Steinkjer is an example of innovative organisational thinking, and it also has spin-off effects for the region.

A more inclusive world of work

The government attaches great importance to securing employment opportunities for everyone. While scarcely any country can match Norway in terms of overall labour market participation, and few have a better-educated workforce, we are none the less short of labour. That is why potential labour reserves have to be mobilised, for example by halting exclusion and promoting a more inclusive world of work.

A good work environment and job security are important for the individual's motivation and his/her likelihood of remaining in employment. Given the rapid pace of adjustment and the changes in evidence in the world of work, it is reasonable to question whether current employment regulation is properly geared to this situation. We will therefore set the stage for new, unified employment legislation.

We need to devote all our resources to getting more people into employment. To this end we will focus on securing an effective and good labour market service that can provide services adapted to the needs of employers and to persons who need help in getting a job.

Labour market measures are key instruments in mobilising the unemployed for the labour market. For ordinary labour the Government is maintaining a level of measures geared to a low level of unemployment. Measures targeted at the vocationally handicapped have been stepped up, both with a view to mobilising them for the labour market and to countering recourse to disability pension. We will continue our effort to get more people onto rehabilitation programmes. To have maximum effect, measures for ordinary jobseekers need to be targeted at groups in greatest need of assistance, i.e. young people, the long-term unemployed, immigrants, and persons with little education, including immigrants.

The government considers it important to enable persons who have dropped out of the labour market owing to disablement or other reason to exploit what capacity for work they possess for their own benefit and for the good of the community. Employers must accept a main responsibility for arranging the workplace to this end. The Government will contribute by enabling welfare schemes to be organised in such a way that it will pay to work.

To obtain sufficient labour we also need to utilise the opportunity new technology provides to free up competent labour engaged in routine work in the public sector.

Switchovers (for example to pre-completed income tax returns) mean that many operations can be automated and that resources can be redirected elsewhere within the same institution. This has enabled the tax administration to reassign a greater number of staff from checking forms to uncovering tax evasion.

Are the regions affected?

Reorganisation of the public sector, as well as the private sector, is more noticeable in small local communities where the affected jobs may add up to a substantial share of overall employment. We will take this into account in cases where the initiatives we recommend are burdensome for the local community. Likely instruments embrace setting up new operations and relocating central government functions. This will include a programme to relocate tasks away from the central administration in Oslo. The government has recently adopted a royal decree on location of state agencies.

A key element of the location policy is to secure a good regional distribution of central government workplaces and to secure the population throughout the country ready access to state services. I can at the same time mention that the Coast Directorate is to be moved to Ålesund, that moves are afoot to merge the Directorate for Product and Electrical Safety with the Directorate for Fire and Explosion Prevention in Tønsberg, the central law-courts administration is to be located to Trondheim, and the Norwegian Central Information Centre to Sogn og Fjordane.

Municipalities suffering a substantial overall loss of jobs will qualify for extraordinary assistance to promote innovation and readjustment.

FEWER RULES - GREATER LOCAL-LEVEL FREEDOM

The municipalities are the mainstay of the public welfare schemes, but municipal self-governance is weakened by detailed rules, earmarked subsidies and action plans. Detailed control is costly.

The Government wants a viable municipal self-governance which:

• strengthens local democratic institutions
• gives the individual citizen influence and the opportunity to influence his/her everyday life
• assures effective resource use.

If the municipalities are to successfully perform their role as producer of services on which the population depends, they must have greater autonomy. In the past decade the share of earmarked transfers from central government to municipalities has doubled. Moreover, the municipalities are assigned a series of planning and reporting requirements. We clearly need to find solutions that reduce the extent of central government control of the municipal sector.

The Storting has adopted a plan designed to gradually reduce the level of earmarked subsidies and to include the bulk of them in the general subsidies to the municipalities. The Government is acting on this plan. At the same time we are taking a critical look at rules which impose unnecessary burdens in terms of services, organisation and administration in municipalities and county municipalities. These rules will either be abolished or changed. By way of example, the Ministry of Health and Social Affairs has revoked 14 regulations on nursing and care. Abolishing all reporting from municipality to state is impracticable, but we are working to create more adaptable and flexible work and cooperation modes that reduce reporting to a minimum. As many as 115 municipal-sector reporting arrangements are to be removed. After all, what purpose is served by details of pinewood production? "Might come in useful" is an unworkable principle for reporting and control.

We will also be removing all unnecessary regulation. At the national level we expect at least 570 regulations to be revoked. At the local level, 1400 game and wildlife regulations will be replaced by 19 on a region-by-region basis. Moreover, legislation in relation to business and industry will be simplified in consultation with a test panel comprising a representative selection of companies.

We will also simplify the reporting of data from the business sector to public agencies. It should be possible to report data electronically, and once only. Laws and regulations are being revised to remove obstacles to electronic communication.

Common sense to the fore

Public agencies will have greater independence and therefore more opportunity to assess the merits of a case. It is important to put in place a system that makes room for common sense - rather than pedantry - although such a system will still need to take account of legal safeguards and equality of treatment. Much of the unreasonableness we hear about in connection with people's dealings with the public authorities can be corrected by applying common sense. Sometimes certain inequalities have to be accepted - and discriminatory treatment is necessary to achieve equality. This could detract from the precept of "meticulous fairness", and is something we have to learn to accept. But if something is to be done about excessive adherence to the rule book, we have to be willing to do something about the systems that produce the rules. The Storting has a responsibility in this respect, both in its role as rule-maker and in its role as overseer of the Government and the public administration.

Managers of the future

The public sector has to be able to compete effectively for labour in a labour market that is likely to remain tight. There will be greater scope for rewarding innovation and creativity. We will scrutinise the pay and bargaining system, and do more to exploit the potentials inherent in current routines. The public sector has many competitive advantages and can offer interesting work and good opportunities for personal development in well-ordered working conditions. We will facilitate remote working and greater flexibility in ordinary employment relationship to accommodate workers at different stages of life.

Managers will have greater responsibility and authority to reorganise and renew operations within their own agency. This will include scope for developing modes of work and cooperation. A challenge to managers ahead is that tenure will no longer depend on their having greater knowledge of the field in question than others; in many cases staff will possess more expertise than their manager. The manager's job will be to mobilise and exploit this expertise. Present and future managers will need to legitimise their influence by other means than the authority conferred by their position. Good internal and external communication, the ability to capture relevant impulses and to get collectives to function optimally will be useful skills for managers in the knowledge society. Managers will be more directly accountable for results, but will also be given the leeway and powers needed to carry out changes. We will introduce enlarged, systematised manager evaluation, and will to a greater degree employ fixed terms of office and manager contracts.

Greater employee involvement

How we handle the substantial challenges facing us on the personnel front will be crucial to our success. We cannot simply decide on a reorganisation. When implementing the substantive changes that are needed, it will be equally important to instil motivation and understanding among the workforce. That is why proactive participation by the individual employee, union representatives and management alike is imperative. This will require a broad-based change of attitude to ensure that staff at all levels are willing to get to grips with the challenges.

In taking the action needed to attain our reorganisation targets, we need to accommodate employees' need for security. In our view job security and income security are key factors in handling the reorganisation of the workforce ahead. Financial instruments must be applied to make room for flexible processes.

However, job security is not synonymous with "job content" security, i.e. being able to continue with the same work as previously. On the contrary. Many must expect changes, both as regards job content and work modes. Channelling resources from administration to service production will also entail challenges in terms of developing expertise in areas where we know a greater effort is needed to safeguard the welfare state. The government will facilitate the development of expertise and post-qualifying and further education as a key instrument to this end.

The public administration is also a source of environmental problems and is an important contributor to achieving environmental goals. Integrating environmental considerations in the operation of public sector enterprises will in most cases mean reducing consumption of environmentally hazardous products, reducing energy consumption, increasing recycling and so forth. These are measures that contribute to more efficient and effective resource use and produce financial as well as environmental gains. Public sector enterprises have not been exposed to environment-related expectations on the same scale as private firms. Bringing environmental initiatives into the operation of state enterprises will help to raise confidence in the state in general, and to ensure a better match between what the state expects of others and how the state runs its own business. Achieving "greener" operation of state enterprises is an important part of the effort to renew and increase the efficiency of central government.

CONCLUSION

The government wishes through its renewal programme to develop, reorganise and increase the efficiency of the public administration in order to improve its responsiveness to citizens' needs and to take socio-economic considerations more into account. The public sector has to promote fundamental values such as political control, equality of treatment, transparency and participation and, not least, legal safeguards and personal data protection. We have added new values in our renewal effort:

• Flexibility - because this is what the user expects.
• Effectiveness - because this is what the population is entitled to.
• Greater autonomy - because we believe in freedom and responsibility, and not in pedantic adherence to rules or detailed control.

In order to preserve confidence in and the legitimacy of public welfare provision, and an understanding on the part of the population and the business sector of the need to contribute to national solutions, the public sector needs to come across in all spheres as efficient and effective in the broadest sense. This is why we want to renew.