An advisory group to the Government is recommending that state agencies could deliver better quality and more-value-for-money services by contracting them out.
The Better Public Services Advisory Group's recommendations were released on Thursday as part of the Government's outline for reform of the public sector.
The group - whose members include the heads of the Department of Prime Minister and Cabinet, Treasury and the State Services Commission, says state agencies can do better.
It says they need to work less as separate agencies and more as a system focussed on getting results.
The advisory group says at present agencies don't have to show they've tested the services they offer against alternative forms of provision - and that they can get much better at contracting in innovative ways.
The group is also recommending changes to the State Services Act to allow the State Services Commissioner to collect performance information and make decisions on deployment of senior staff in agencies.
Contracting could cut capability - Labour
The Labour Party says the state sector could lose capability by contracting out more of its services and would not necessarily save money.
State services spokesperson Chris Hipkins says the Government has been focused on lowering the number of public servants, which means it needs to contract out more work.
Mr Hipkins is welcoming other recommendations from the group, including agencies working together toward specific results.