Public Management – Time for a Re-launch
By Francis Terry
Reproduced by permission of the Public Management and Policy Association.
The 1980s were a decade of massive upheaval in the structures for delivering public services, with the creation of executive agencies in central government, privatisation of utilities, contractorization in local government and a renewed emphasis on better financial management and accountability. These reforms, subsequently characterised as the ‘New Public Management’, were essentially driven by beliefs about the importance of means rather than ends. The argument was: once market mechanisms are properly established, welfare follows through the ‘trickle down’ effect, greater self-reliance of individual citizens and the benefits brought by the operation of competitive forces.
With hindsight, that analysis seems remarkably simplistic; yet it commanded powerful political support as a huge range of restrictive and inefficient practices were swept away. So powerful was the political hold of these ideas that they carried over well into the Major governments of the 1990s, though this time bringing further and much less productive upheaval, as Simon Jenkins (1995) has eloquently shown. By now, serious concerns were emerging both within government and outside about whether the recipe for public services was right. The results of market failure began to seem more significant than before, competition proved to be short-lived as the privatised utilities began to consolidate, and the search for repeated efficiency savings grew ever harder. A turning point was reached with the privatisation of the national rail network, which turned out to be an exercise in sheer political folly.
The rise of inspectorates and the decline of professionalism
The 1990s were also the era of the rise of inspectorates and audit bodies, as many commentators (e.g. Hood et al, 1998 have noted) and trial by media. In a public service culture which had become increasingly contract-driven, inspectorates were an appealing device. They provided a reassurance that those in government were still in control of the standards that mattered most to citizens and consumers. But they have proved a blunt instrument for improvement, and they represent a permanent bureaucratic overhead which can easily proliferate, as the recent experience of the Audit Commission has shown, with the doubling of its budget since 1997 and a near-fivefold increase in staff since it was founded 20 years ago.
Although inspectorates should also act as a stimulus to good management of public services, a lot depends on how they go about their task. They can lead to ambiguity about where ‘the buck stops’: if an inspectorate has ‘passed’ a given practice as acceptable, does this exonerate – at least partially – the manager who follows the practice but nevertheless finds that the service has somehow failed the customer? The temptation to fall back on this sort of excuse is accentuated in a society where trial by media is an ever-present risk for public service managers and litigiousness is reaching epidemic proportions. Thus, the rise of inspectorates can paradoxically reduce the sense of responsibility and accountability in management. They can create a sense of complacency because someone else is looking after the ultimate effect of what is done, and so long as they are happy, why do we worry?
These trends have developed in parallel with the demise of professionalism in the public services and the decline in influence of professional bodies. At the level of operatives, supervisors and junior management, the burgeoning variety of National Vocational Qualifications has left the professional bodies feeling like a ‘fifth wheel’. At the middle and upper levels of management, public service employers are less interested nowadays in recruiting managers who have professional qualifications. That is because out-sourcing has made the traditional professional skills less relevant, and the preference of the 1980s and ‘90s for importing business skills into the public services is still partly with us. The centralisation of control, and the upward pull of policy-making towards regional and national level, have reduced both the independence and the standing of trained professionals in such fields as planning, housing, environmental health and transport.
For their part, the professional bodies have found themselves competing with a wide range of undergraduate and postgraduate courses offered by the universities, which have what appear to be more prestigious qualifications to confer. Despite the titles of these courses, which may sound vocational or ‘applied’, their content is often rather generalised and academic. While they may be stronger conceptually, such courses afford much less experience or understanding of what counts in an operational situation.
These trends – the rise of inspectorates and the decline of professionalism – are underpinned by technological developments. As managerial responsibility has been superseded by management by contract, the mentality of ‘tick the boxes’ has been facilitated through information technology (IT). The increase in documentation required to run a public service nowadays has been helped by the cheap and ready availability of IT, which not only makes analysis and manipulation of data vastly quicker but offers unlimited scope for storage, duplication and, indeed, redundancy. Paper-pushing has become virtual, but it is still with us. Nor does it help managers who face new threats from contractual penalties, league-table embarrassments and media savagery. They require new skills to handle such challenges, but they are not taught.
The problem for government
Central government in Britain is largely ‘non-executant’; that is, it relies perforce on other bodies such as local authorities, health trusts, regional development agencies and so on, to take the actions that will ultimately fulfil the policies it espouses. The principal instruments which government traditionally controls directly are money and changes in organisation. Over-reliance on the first of these in achieving policy leads to the risk of waste and inefficiency; over-reliance on the second runs the risk of creating a sense of turbulence and inconsistency, leading to further waste and inefficiency.
The apparent determination of the present government to get public services running efficiently and hit a multitude of targets is probably higher now than at any time since the Second World War. Yet it seems doomed to frustration so long as the solutions are largely seen in terms of structural change or pumping in more money. This approach is accompanied by a depressing emphasis in the political discourse on the inputs provided to public services – how often have we heard the claim that so much more is being spent on the NHS? – or alternatively, on vague threats of ‘reform’. Asked about outputs, and the language rapidly shifts to ‘targets’, which are not the same thing.
The time has come for government to make a serious review of how things work in the public services, as well as simply lauding ‘what works’. Government needs to make an impartial assessment of the instruments at its disposal and their relevance to achieving the policies it has embraced. Calling in the senior police officers, say, to give them a pep-talk, or appointing a ‘czar’ to deal with the latest social problem, may be good for media relations but they add little to the effective management of public services on the scale required. Money and structural change, especially the partial handing over of services to the private sector, are not necessarily the options either. In any case, there is widespread scepticism about further private sector involvement, because too often that implies abrogating the responsibility which citizens expect government to take. Recent widespread cuts in electricity supply, and the continuing public dissatisfaction with the railway system are two obvious examples.
Even where private sector participation is deemed desirable for delivering a public service, public managers need to be skilled in working with commercial partners. They remain the essential interface between democratically-elected (or appointed) representatives and the organisation for delivery. The responsibility which public managers carry is not able to be transferred completely to the private sector, nor is it made redundant simply by letting out contracts or relying on the presence of inspectorates. There is also a range of cheaper and less clumsy options that can help to improve public services which are inadequately used at present. These include pilot and demonstration projects, information exchange and guidance, incentives, joint working with other agencies and research.
All this implies the need for a national initiative to promote training, career development and leadership in public management. This could be done in partnership with professional bodies where appropriate, and would restore their proper role and importance. The public services accepted long ago that the world of business had much to teach them, and now is the time to consolidate what has been learned. It could be turned into an effective agenda for real modernisation. Moreover, it would probably save a lot of money. At present, there is a depressing assumption that the private sector holds a virtual monopoly of the management skills and experience required, and these must be bought at whatever cost. Yet this is absurd: the private sector does not operate under the same conditions as the public services and in many cases cannot do so without disproportionate investment and delay.
So, instead of those earnest harangues about ‘the need for reform’, which seem to set the trade union hackles rising, the Prime Minister could, I suggest, lend his weight to restoring a sense of pride and professionalism in serving the public. Poor motivation is the enemy of policy fulfilment, as well as a powerful source of inefficiency. At the moment, government is getting the worst of both worlds: putting up the money for public service improvements while making threatening noises that more or less ensure its effect is compromised. There are serious implications for the longer term if priority is not given to developing public management, because governments will find it harder to fulfil their objectives and public dissatisfaction will increase.
Jenkins, S. (1995), Accountable to None, Hamish Hamilton (London).
Hood, C., James O., Jones, G., Scott, C. and Travers, T. (1998), ‘Regulation Inside Government: Where New Public Management Meets the Audit Explosion’ in Public Money & Management 18:2.
Francis Terry is a Visiting Fellow, Interdisciplinary Institute of Management, London School of Economics. F.Terry@lse.ac.uk