Executive Agencies are not making the best use of target setting to drive performance improvement. The National Audit Office found that the 30 agencies they surveyed were meeting three quarters of their targets, but concern centred on the targets themselves which in many cases contributed little to improving service delivery. Just over half the civil service is made up of Executive Agencies such as the Passport Office and JobCentre Plus.A major weakness is a lack of customer focus. Agencies have a limited understanding of customer needs and preferences. They also lack information about customer’s assessment of quality and how far the service meets customer expectations. Target setting by Agencies does not focus on the key drivers which most influence the overall quality of service such as speed of delivery, accessibility or quality of information provided.

There is also a similar lack of focus on external stakeholders. Monitoring the performance of Agencies is made difficult by the lack of consistent annual information with the result that it is not possible to make year to year comparisons of performance. One third of the Agencies do not provide performance information in their annual reports thus denying stakeholders the opportunity to make an assessment of performance. In many cases the published performance indicators are not used internally in the day to day management of service delivery.

Many Agencies have no programme of continuous performance improvement in place. Productivity is often not measured or monitored. Unit costs were frequently hard to measure so Agencies are not well informed about comparative performance or the cost of incremental improvements in service. The NAO recommends that they should benchmark their processes and unit costs with similar organizations.