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DIA’s unfulfilled promises for Archives and National Library

by Don Gilling
At the height of the Watergate scandal, Deep Throat told Bob Woodward that to understand what was going on he needed to “Follow the Money.” The same advice helps to understand the experience of Archives New Zealand and the National and Turnbull Libraries since they’ve been under the control of the Department of Internal Affairs.

In 2010 Cabinet approved incorporation of Archives New Zealand and the National Library of New Zealand into the Department of Internal Affairs. It was justified on essentially financial grounds.

It was claimed that the incorporation would lead to:

the futureproofing of both entities
lower corporate overheads
the achievement of cost savings and economies of scale
the provision of support for digitisation with less risk and cost
the maintenance of public accountability by continuing separate budget votes and annual reports.

Once implemented, the incorporation was said to be part of the “wider machinery of government changes to improve the performance and service delivery of public sector agencies.”

But what happened? Financial numbers obtained under the Official Information Act 1982, and information from the DIA Annual Reports, together with information from other publicly available sources, tell the depressing story.

Over the period 2013 — 2018:

Vote Internal Affairs INCREASED 12.4%.

Total National Library budget DECLINED 9%.

National Library overheads INCREASED 25.7%, and together with Depreciation and Capital Charge now account for 51.9% of the total National Library budget.

Monies under the control of the Turnbull Librarian DECLINED 9.7%.

Archives overheads INCREASED 279% and together with Depreciation and the Capital Charge, now account for 67.4% of the total Archives budget.

The budget allocation for the Management of Public Archives DECLINED 29.6%.

Staff numbers, measured in FTE’s for the National Library as a whole, have DECLINED 8.3%, with the DECLINE at the Turnbull being slightly higher at 9.5%.

The remuneration of The Secretary of Internal Affairs INCREASED 49%. In contrast, according to Stats New Zealand, average NZ weekly earnings increased by only 18%.

Following the money, therefore, makes clear that the promises of 2010 have not been fulfilled. Lower overheads have not been achieved. Service delivery has not been improved, and services are being further cut back. Declining expenditure, it can be argued, is evidence of deliberate under-funding, not the achievement of cost efficiencies, or the provision of proper support for important legally mandated roles.

Digitisation

Things are not much better in regard to digitisation. As predicted in 2010, “ the elephant in the room” for digitisation is that as digital files grow in size and number so do the costs of storage and preservation. According to the DIA Deputy Secretary of Knowledge and Information Services, storage costs have “…increased by over 25% between 2015 and 2018” while funding has been reduced.

A Ministerial Group was formed in June 2018 with the intention of strengthening the contribution that the national archival and library institutions (Ngā Taonga Sound & Vision, Archives New Zealand and National Library) make to the culture and heritage sector, and to open and transparent government. This Group, led by Grant Robertson, Associate Minister of Arts and Culture, and Tracey Martin, Minister of Internal Affairs, established a review (NALI) with the twin purposes of looking into current and future roles and linkages between Archives and Libraries, together with the impact upon them of digital technological change. The Ministerial Group also included Chris Hipkins the Minister of State Services, Nanaia Mahuta the Minister for Maori Development, the Minister for Government Digital Services, currently Kris Faafoi. It is noteworthy that in two years there have been three Minsters for Digital Services.

The National Librarian in his submission to the NALI review, said that ”ever tightening budgets have removed our ability to research and keep pace with digital opportunities”. The consequence of financial constraints was laid out by the Turnbull Librarian in his submission to the NALI Review when he said

“The overwhelming bulk of New Zealand generated information is digitally born, and we are already losing most of it.”

From a rather more independent perspective, Parliament’s Governance and Administration Select Committee said in their July 2018 Report that they concurred in the belief that “digitising New Zealand’s precious archives is a commendable goal, but wondered how successfully this could be actioned considering that there is minimal ongoing funding available for this.”

In other words, the incorporation of Archives New Zealand and the National Library into the Department of Internal Affairs has not led to the provision of support for digitisation with “less risk and cost,” or better performance.

Futureproofing?

Meanwhile, The Secretary of Internal Affairs, has 8 Deputy Secretaries, as part of the DIA Executive Leadership Team, assisting him in managing “and improving the performance” of his Department. The ELT, made up of generic managers, does not include the National Librarian or Chief Archivist who as third tier managers are now required to undertake an extensive process of obtaining further approval for decisions that they used to be able to make and implement themselves.

The National Librarian acknowledges that “the work of the Library has hardly ever been a priority for the Department.” Which is not surprising, according to the Turnbull Librarian, when the National and Turnbull Librarians have been reduced to “…3rd and 4th tier managers in a large organisation with divergent functions and competing resource demands.” In other words, despite the promises of 2010, futureproofing of the Archives and Libraries has not been a priority, or a significant achievement.

Public Lending Right

One of the many divergent functions that are under the control of the National Library is the Public Lending Right scheme established in 2008. This replaced the Authors Fund that had been established in 1973 after a long and successful advocacy campaign by The New Zealand Society of Authors (PEN NZ Inc.) The new Public Lending Right Fund provides for New Zealand authors to receive payments in recognition of the fact that their books are available for use in New Zealand libraries.

The new fund, has remained at $2,000,000 since 2008, and is divided among registered authors, based on how many copies of their works are estimated to be held by libraries. This gives the Book Rate which has risen 3.8% since 2009, but declined by 3.9% over the last 3 years. If the amount in the fund had kept pace with inflation there would have been a further $300,000 in the fund by the end of 2017, and the most recent Book Rate would have risen to $4.57 per book.

Declining Budgets and Increased Overheads

The most critical finding that flows from the information obtained under the OIA and from other sources, is the significant rise in the level of overheads and the consequential decline in the funds that are devoted to operational functions. Just under half of the National Library’s 2018 budget of $63 million is devoted to direct operational functions. For Archives New Zealand, only one dollar in three of their much smaller budget, is devoted to direct archives activity, with the remaining two dollars being spent on DIA imposed central costs.

Internal Affairs claim that overheads are allocated by means of standard accounting methods, but the incurrence of overheads and the determination of their level and allocation, is solely at the discretion of Internal Affairs, as is the potential to transfer amongst different and divergent functions.

And as Jane Clifton notes in the Listener, “Underhand and Overheads” (February 2 – 8), DIA can, and do, add a significant mark-up to items of actual expenditure, when reallocating them to business units as overhead. Almost certainly, this results in the DIA being able to build up a significant central fund which they are then able to transfer at will and avoid the Public Finance Act restrictions on transfers between votes, in effect thwarting the intentions of Parliament.

Comparability with other Government agencies is difficult because of differing functions and reasons to hold assets. But interesting and perhaps relevant comparisons, might include the overhead spending on Depreciation, Central Costs and Capital Charge by the Ombudsman (37.1% of total expenditure), the Department of Conservation (18.5%), the Ministry of Foreign Affairs and Trade (15.1%), and the New Zealand Defence Force (30.8%). The significantly higher charges for overhead recovery used by the DIA, (Internal Affairs adds a significantly higher mark-up to items of actual expenditure,) and which are anywhere from five to eight times the original direct cost of an item is, therefore, strongly suggestive of the use of overheads allocations as a means of re-allocating monies away from Archives and Libraries to other DIA functions and activities in possible breach of the Public Finance Act.

While the incorporation of Archives and Libraries within the DIA has not led to the reduction in overheads promised in 2010, it is most unlikely that the move to independent status for the Archives and the Library would require the current levels of overheads since there would be no need to reallocate overheads to other functions, or adopt the practices and methods of excessive charging practiced by Internal Affairs.

Under the control of Internal Affairs, expenditure on the National Library has declined by more than 10% and that of Archives by an even bigger percentage. Declining expenditure is evidence of deliberate under-funding, not the achievement of cost efficiencies, and is putting the fulfilment of statutory functions at significant risk.

The following comment made by the Turnbull Librarian, in his submission to the Ministerial Review Group, is particularly pertinent:

Operational resourcing — ongoing operational funding cuts over the last several years have left the National Library, and the Turnbull within it, severely weakened and demoralised. These are now manifesting in staff cuts and service closures. This is an area of immediate concern, and rates as the most urgent challenge.

The Results of the NALI Review

On 18 December, 2018, the Ministers in charge of the NALI Review process responded to those who had made a submission to the NALI Review by issuing a release that said amongst other things:

“Based on the public feedback, we have agreed that the existing arrangements for the institutions cannot continue. The Chief Archivist and the National Librarian are hosting workshops with Ngā Taonga Sound & Vision and the statutory bodies that advise the Minister of Internal Affairs on library and archives issues. These workshops will further assist us to develop options to enhance the mana of the institutions and facilitate collaboration among them.”

For those who seek the removal of both Library and Archives from under the control of the DIA this represents, perhaps, a partial victory, but concerns will remain. What exactly is meant by collaboration, and what priority will be accorded to collaboration?

Archives and Libraries serve different purposes and have different roles. For instance, Librarians organise and manage collections of books, manuscripts and private records. They rely upon bibliographical type control according to author and subject. Archivists, on the other hand, organise public records which are the product of Government activities and which need to be organised according to the structure and function of the agency that produced them. While Libraries deal with one item at a time — a book, a manuscript — Archives deal with a series of files — a final report and all of the correspondence, documents, and papers that led up to that report. In simple terms, we can say that libraries deal with information that can be catalogued, while Archives deal with evidence that can be filed. Bringing them together, or increasing collaboration between them, would be more difficult than some imagine, and steps in those directions will need to be carefully monitored if the problems of the past, or the ill-fated steps taken in Canada, are not to be repeated.

Turning the National and Turnbull Libraries into an Autonomous Crown Entity, under the control of an independent Board of Trustees is a much superior solution. It would avoid destructive bureaucratic arm wrestling, prevent Interference from, or rear-guard action by, Internal Affairs, and limit the possibilities of empire building. Collaboration, if appropriate, could then emerge organically. Most importantly, independent status would go a long way to restoring necessary financial transparency and cultural safeguards, together with public trust in the institution.

Similarly, making the Chief Archivist an Officer of Parliament, and ensuring that they were properly qualified as an archivist, would give them sufficient authority to fully control and shape proper archival processes within Government, including the auditing of public records and the issuing of mandatory standards. The need for proper qualifications are at the heart of the role and functions of Officers of Parliament such as the Ombudsman and the Auditor General. With appropriate levels of resourcing the Chief Archivist would be able to effectively perform their important constitutional role as the keeper of the public record.

According to the Ministers, one of the key themes to emerge from the 151 submissions to the Ministerial Review was a concern about funding. The key issue the Ministers now face, and on which they have so far been silent, is how will Government respond to the funding challenge, at the same time as the Ministers “develop options” that will enhance the “mana of the institutions”, provide for the independence of the institutions, and allay fears amongst stakeholders about the continuing role and influence of insiders.

Future Developments?

The Ministerial Statement of December 2018, was in effect promising that everything would be resolved and revealed early in the new year.

Reliable sources suggest, however, that despite the clear lead given by the Labour 2017 election manifesto’s commitment to re-establishing Archives and Libraries as independent and separate entities, the delay in resolving the matter is largely due to considerable internal political and bureaucratic infighting over what to do. The bureaucracy is defending its patch, and fighting back against Ministerial intentions. There is, apparently, significant dissension within the Ministerial Group. The SSC, together with their Minister, are apparently still committed to a belief in the need for larger departments and a smaller number of them, and the importance of central control. In this context it is hard to see how the “mana of the institutions” will be enhanced and the independence of the institutions preserved.

It is suggested that Archives and Libraries will be removed from under the DIA umbrella and together with the Film and Sound Archive incorporated into a new Department, thus maintaining central bureaucratic control whilst limiting and restricting the independence of the separate institutions, and allowing the possibility of re-incorporation into the DIA at some later stage. Their “mana” and identity and address would also be lost and subsumed within that of a third party.

In the context of a new department, any split between the operational and regulatory functions of the Chief Archivist, could be largely symbolic and ineffective, and would inevitability be a denial of the possibility of the Chief Archivist becoming an Officer of Parliament.

A further possibility, enabling the reinforcement of central bureaucratic control, would be a requirement for the new department to continue to obtain their central services from the DIA in pursuit of the NALI identified “strategic focus area… of leading, influencing and regulating across the government information system.” This would, of course, also allow the DIA to continue to treat Archives and Libraries as a cash cow under the guise of allowing for collaboration.

Despite the clear legally defined roles and functions of both Archives and Libraries, and their constitutional significance, the CEO of the new department could well be a generic manager who may not have qualifications or skills in either of the two distinct areas of archives or libraries.

A separate department, however, would presumably bring with it a separate Budget Vote and Ministerial role, which would go some way to restoring the public accountability, financial transparency and disclosure that was lost in 2010 when the institutions were incorporated into the DIA.

Dr Donald Gilling FCA FCPA has taught at universities in Australia, England and New Zealand, and for nine years was Professor of Accounting and Finance at the University of Waikato. He holds Fellowships in both Professional Accounting Bodies in Australasia and is the author of over 90 papers in academic and professional journals, covering topics in public finance, accounting and auditing, and the economics of education. He has acted as an expert witness in a number of applications for Judicial Review of the operations and decision making of government and public bodies. He has been a member of the committee of the Friends of the Turnbull Library for 20 years.

6 comments:

  1. David Mackenzie, 27. August 2019, 13:05

    Thank you, Dr Gilling, for this presentation of the pitfalls and tribulations of two vital cultural institutions. Electronic data storage is going to be a growing demand. Samples at least of everything produced in NZ should be preserved and kept accessible over time.

     
  2. Lindsay Ferguson, 28. August 2019, 9:14

    An excellent outline of the state of play for both institutions. One might have thought that senior bureaucrats had a responsibility to taxpayers and stakeholders to be truthful but apparently not. Whatever happened to the State Service Commission’s old Code of Ethics for public servants? It has seemed for the past decade or so that senior public servants can come up with any deception that they like without any fear whatsoever of being called to account.

    While the State Services Commissioner has become very accomplished in making apologies for the incompetence of senior bureaucrats on the (probably few) occasions that they are found out, we need to see these bureaucrats being publicly held to account for their deception and incompetence.

     
  3. Henry Filth, 28. August 2019, 13:16

    Thanks for a good piece of writing on a very important topic.

     
  4. Fiona Kidman, 28. August 2019, 20:10

    Thanks for this article, Don. I really appreciate your interest in the Public Lending Right. It’s a big issue for writers. Free access to books in libraries is an important principle in this and many countries, but the failure to adequately compensate the creators is tough. It’s interesting to reflect that Norman Kirk recognised the problem and introduced PLR (or the Authors Fund as it was), making NZ/Aotearoa the first English speaking country in the world to have one. We now lag behind many other schemes. Just one of many valid and valuable points you raise.
    Fiona Kidman

     
  5. Simon Morahan, 31. August 2019, 19:05

    Put the clerks in charge, and who gets the most benefit? The clerks, of course.

     
  6. Sam A, 19. September 2019, 19:53

    It sure is taking a heck of a long time for NALI to announce any actual measures.