Erosion of public-service capability and institutional memory

When agencies lack in-house people and systems to plan, maintain and commission assets and services, asset condition goes unknown, renewals are deferred and delivery is bought in from contractors whose knowledge leaves with them. Te Waihanga finds capability and capacity are 'the biggest constraints' on asset-management maturity.

Open 0 of 4 support, 0 against; partly supported needs two more.

Timing Mixed
Distribution Mixed
Peers Mixed
Mechanism Mixed

Timing Mixed Does the cause move before the symptom?: Headcount measures capacity, not capability. Public Service FTE rose in each period: 53.5% (2000-10), 28.3% (2010-20) and 9.6% (2020-25). The series that fit capability, tenure and contractor share, start in 2016 and 2018; tenure fell to 2024 and rose in 2025 as contractor share fell, so precedence cannot be tested.FTE at 30 June: 29,020.5 (2000); 44,553.6 (2010); 57,148.6 (2020); 62,654.5 (2025); 64,534.7 (Mar 2026). Tenure 9.5 years (2016), 8.0 (2024), 8.3 (2025). Contractor share of spend 13.4% (2018), 14.5% (2022), 5.3% (2025), 5.4% (Mar 2026).Public Service Commission, Public Service workforce five-year trend data, 2000-2026; Public Service Commission, contractor and consultant share of workforce spend, quarterly; Public Service Commission, Public Service Census: mobility
Distribution Mixed Is the symptom worse where the cause is stronger?: Across 22 departments, change in OIA on-time share 2018 to 2025-26 shows no significant link to contractor share, staffing change or staff turnover. Most departments now answer 97% or more on time (19 of 22), so this outcome is too compressed to detect an effect. Kiwis Count is not tested by agency.Spearman rho, n = 22: contractor share change -0.07 (p 0.76); FTE change +0.08 (p 0.72); mean unplanned turnover +0.31 (p 0.16). Share = contractor and consultant spend / (FTE x average salary + that spend), a derived measure.Public Service Commission, OIA statistics half-year workbooks (Jan-Jun 2018, Jul-Dec 2018, Jul-Dec 2025, Jan-Jun 2026); Public Service Commission, workforce data drilldown by agency; Public Service Commission, contractor and consultant spend by agency, quarterly
Peers Mixed Do comparable countries with the same cause show the same symptom?: Australia's 2019 public service review found contractors increasingly doing core in-house work, the same cause in a peer. Australia is also the main destination of New Zealand's citizen exit, so the same cause did not produce the same exit symptom there. Service-quality data across peers were not assembled.Parliament of Australia, Senate committee report, ch. 3, labour hire; Department of the Prime Minister and Cabinet (Australia), Independent Review of the APS (2019)
Mechanism Mixed Does an official review document the pathway?: Official reviews state a vulnerability, not a pathway to the symptoms. Te Waihanga names capability as the biggest constraint on asset management; the Auditor-General (2017) says entities 'may not always have the expertise'. No official review attributes the symptoms to public-service capability.Te Waihanga, Taking care of tomorrow today: asset management state of play (2024); Auditor-General, Reflections from our audits: investment and asset management (2017), Part 5

What would settle it: An agency panel from 2018: changes in contractor share, unplanned turnover and tenure set against each agency's own service measures, with a lag of one to three years. The hypothesis predicts that agencies losing capability first degrade first.

tested 2026-09-30 · the causes as data

Cite

macrohard.nz, “Erosion of public-service capability and institutional memory”, The Hollowing Index, tested 2026-09-30. https://macrohard.nz/causes/public-service-capability