Select Committee on Public Administration Minutes of Evidence

Memorandum by the Office of Public Services Reform (PSR 33)

  1.  The role of the Office of Public Services Reform (OPSR) is to advise the Prime Minister on how the Government's commitment to radical reform of the public services, including the civil service, can be taken forward. It covers the full range of public services, including those provided by central and local government, as well as other public bodies. Working closely with the Civil Service Corporate Management and Reform team and others, it is fundamentally examining current structures, systems, incentives and skills, and the nature of services currently provided. It is located in the Cabinet Office, and reports to the Prime Minister through the Secretary of the Cabinet, Sir Richard Wilson. OPSR is a small office, in the process of recruiting about 25-30 high calibre staff, drawn from the civil service, public services and the private sector.

  2.  OPSR is led by Dr Wendy Thomson. She was formerly Director of Inspections at the Audit Commission and Chief Executive of the London Borough of Newham. At the Audit Commission she held a newly created post, where she developed and implemented the Best Value inspection programme across local government. She was instrumental in getting the scheme up and running within a tight time frame. At Newham, under her leadership the Council improved its service performance and adopted a radical approach to regeneration, tackling poverty and improving the quality of life in the inner city. She also served on the Government's Urban Task Force chaired by Sir Richard Rogers.

  3.  The role of the centre of government is to enable delivery of the Government's objectives for the public services. To strengthen and extend that ability, and provide a strategic lead at the centre of government, three new units were created immediately after the General Election in June 2001. The Forward Strategy Unit, led by Geoff Mulgan, and supported by the Performance and Innovation Unit, does blue skies policy thinking for the Prime Minister on specific issues. The Prime Minister's Delivery Unit, led by Michael Barber, has the role of ensuring that the Government achieves its main objectives in four key areas of public service: health, education, crime reduction and transport. In doing so it works closely with the Treasury to ensure that the targets that have already been agreed are achieved. OPSR's role is to work on the competence and capacity of the public services. It is doing this by working collaboratively with the other two new units, and with existing units such as Civil Service Corporate Management and Reform, the e-Envoy, the Centre for Management and Policy Studies, the Office of Government Commerce and the Regulatory Impact Unit.


  4.  The Government wishes to improve the public services, and it recognises that this requires both investment and reform. Investment on its own can make a significant difference of course, but it is not necessarily enough. Reform matters too, to put into practice the Government's determination to foster social justice, improve the quality of life and create a sense of mutual responsibility and community. The Government is committed to increased investment, but believes that on its own this is not enough. It must be accompanied by reform.


  5.  To realise this Government's vision, public services have to address more closely the needs and expectations of modern citizens. The Prime Minister's speeches on public services have outlined four principles of reform that must accompany new investment. They are:

    (1)  high national standards and full accountability

    (2)  devolution to the local level to encourage diversity and creativity

    (3)  flexibility at the front line to support modern public services

    (4)  the promotion of greater choice and alternative providers.

  6.  All four principles stem from an over-riding commitment to putting customers first. They focus attention on services becoming more explicitly designed around the customer. The success of the services is likely to be judged by people's experiences and perceptions of those services, as well as objective measures of performance.

  7.  The relationship between national policy and customers is more complex in public services than in commercial ones since most services cannot choose to deliver services to some customers and not others. This makes it even more important that the relationship is understood and worked through in delivery. It is the first step in aligning policy and programmes to deliver outcomes that matter to the public.

  8.  Once the importance of the customer is recognised, then public services will be seen more clearly to demonstrate certain characteristics—to respond to customers' requirements as well as deliver policy outcomes. Ideally these two—policy aims and customer wishes—come together. This relationship between national policy and customer experience is one key to successful delivery.

  9.  There are important reasons why all four principles need to be applied together in each service in order for excellent public services to be delivered:

    —  national standards can only be delivered through devolved delivery since customers encounter services locally

    —  equally, responsibility for delivery can only be devolved where there is confidence that national standards are being met

    —  delivering national standards requires organisational flexibility and better rewarded staff

    —  where there is not the capacity or the capability to meet standards this suggests a need for capacity building and alternative providers.


  10.  Putting the customer first means ensuring that the public services deliver what people want, in the manner that meets their needs best. As research has shown, the public regards services as good if they are reliable and safe. They want competent and courteous staff. And they want to be able to choose services that are fair and accessible. This points to the importance of national standards for public services that put these features first. For example, Public Service Agreement (PSA) targets link investment with reform by holding departments accountable for the delivery of improvements. Such targets aim to meet public expectations of improving services and improved standards of delivery.

  11.  Performance targets are an essential discipline for managers. The Government recognises that targets must also resonate with service users. Successful delivery of public services is about the experience of customers, rather than purely achieving prescribed outputs. If delivery is to be reformed successfully, public servants with a better understanding of who their different customers are could focus more closely on those customers' needs. Performance data could be tied into strategic planning and management in ways that put the customer first. This is why the Guidance for the next Spending Review asks Departments to embed the four principles of reform into their plans and target setting.

  12.  Many citizens today have higher expectations than their parents and grandparents. They know their rights and entitlements. But their expectations differ, so services are faced with the challenge of catering for a variety of needs. Customers want standards, but not uniformity. Government too wants minimum standards. At the same time, it believes innovation can promote improvement and excellence. If these goals compete, there could be difficulty in achieving the desired outcome of customer focus.

  13.  Government also seeks to be clear who is accountable for delivering standards. Locally, service providers are increasingly visible and identified by name. But such transparency does not always extend to the middle and higher reaches of government departments. OPSR can contribute to identifying what standards most matter for effective public service delivery and how far clear frameworks of accountability exist for delivering them. We will also look at feedback about the consistency of high standards in service delivery.


  14.  Clearly defined standards are best delivered close to the customer, within a framework of accountability. People want their problem fully dealt with "first time" rather rather than having to return after authority has been "checked" up the line. The extras that matter to satisfied customers are often the result of local initiatives rather than central prescription. They are understood by staff motivated to go the extra mile. In delivery systems too, innovations and efficiencies are often best generated where local managers are motivated and rewarded for their innovation.

  15.  Good systems and processes harness resources from other sectors or public bodies. They involve the customer more actively in solving problems. Employees require confidence to take more responsibility and take risks, and in turn devolution sometimes arouses scepticism at the centre. So there needs to be evidence to show and support what works.

  16.  The Government recognises the importance of having clear targets and priorities. The idea that intervention should be in inverse proportion to success is being taken into account more widely. This principle is important for central government agencies, local authorities, health and police authorities and government offices as well as front line delivery organisations. OPSR is seeking to stimulate debate, and share good practice on the best arrangements for supporting the devolved delivery of national standards.


  17.  Realigning services around the customer means enabling people at the front line to work in different ways. As customers are not all the same, more changes are needed in the ways services are provided, to reflect a closer recognition of different work and life patterns as well as different needs. This affects the hours that public services are open, whether customers are expected to come to the office or whether staff can go out to locations or use other modes of communication that are more accessible, and at times that are more convenient, for the customers. Deciding exactly what these changes imply for each locality means devolving consideration of these factors to the most local level, so that front line staff with the necessary local knowledge can ensure the best fit between need and provision, especially for their "harder to reach" customers.

  18.  This principle has four elements:

    (a)  flexibility of staff and public service organisations

    (b)  incentives to motivate new ways of working

    (c)  rewarding success so that good services prosper and poor ones improve or are replaced

    (d)  reducing bureaucracy to improve productivity and focus people on outcomes rather than rules and procedures.

  19.  Introducing such changes will often challenge traditional demarcations, restrictive practices and poor management. While some public services are addressing these reforms, many still rely on traditional ways of working. Other parts of the economy are combining skills in different ways to produce better results more efficiently. Information and communications technology (ICT) has the potential to transform delivery, changing dramatically both working relationships and the quality of services. The electronic delivery of government services is an important step now in the process of being introduced, and it depends in part upon public servants being fully equipped for the changes that will be taking place over the next few years.

  20.  Fair systems of rewards tend to reflect more closely where there is additional responsibility on front line staff as a result of new working arrangements. Incentives to improve performance could show tangible rewards for success. For individuals this may mean more money or responsibility. Government could differentiate between services based on actual performance. Better services could receive more freedom and flexibility. They could be rewarded for their success. Failing services could have incentives to improve. And intervention could be in proportion to the risk presented to the public good and customer interests.

  21.  If existing public service staff are to support change, they need to feel confident that their interests are safeguarded when services are reorganised or where they are expected to perform new roles or acquire new skills. Continuous service improvement requires continuous staff training and development so they gain the confidence that comes with knowing they are being employed for their personal contribution and skills. Excellent public services are likely to want to attract the best people in a competitive labour market. That implies showing public servants more clearly that their work is valued and that they are being treated fairly—rewarded for their contribution rather than mainly for seniority or because they have a job for life. For example, more flexible pay systems are being introduced in the civil service. This is a major philosophical change in government thinking about fairness and justice—one where it is not always fair to treat everyone the same, regardless of their performance

  22.  Finally, this principle also entails cutting through what the public and staff experience as the "bureaucracy" and red tape of public services. This includes reducing hierarchies, cutting form filling, internal rules and procedures, and removing vertical "off-line" controls and monitoring of resources. For example, the Regulatory Impact Unit and departments are working to reduce the paperwork required by doctors, police and teachers. In the end such changes could make it easier and quicker to deliver a policy to the public, and improve productivity as well as quality.


  23.  This principle has attracted the most interest, and is seen by some as a large part of the new public service "offer". In fact, it is not all that new, and it is clear that even with a significant increase in private and voluntary sector involvement, the relative proportions of services provided through those sources will remain fairly small. Innovative approaches are being pioneered in some areas, particularly where they can:

      (a) facilitate access to investment not otherwise available

      (b) improve management capacity and value for money

      (c) improve productivity and efficiency

      (d) take over or replace failing public sector services.

  24.  But the argument for greater choice can extend further, where these features become intrinsically desirable. Research shows that the services which attract the most popular support are those which involve choice. Services which offer choices (rather than having a captive audience) tend also to offer better information to customers. This makes them more popular because customers know what to expect, whether or not they are receiving it, and what to do if it goes wrong.


  25.  The four principles have implications for the management of public services. Some observers might say that traditional bureaucracies place a high value on processes and rules, seek to economise, to avoid risk and to assume "one size fits all". In contrast, modern service organisations tend to focus more on outcomes and innovation, on value for money, they seek to manage risk and to find solutions that are fit for purpose. There is recognition that public services are expected to deliver better services in different ways in a different world. And much is already being achieved. There is nevertheless a clear sense of urgency; in some areas very rapid change is sought by the Government. This suggests a need for further concerted action by people involved in delivering public services, across central and local government and front line services.

  26.  Part of the change is reflected in central government through programmes to modernise the civil service. Since 1999 the Civil Service Reform programme has been creating some of the conditions for faster progress. It has enhanced understanding of the need for reform, brought needed changes in the machinery of government, and is developing a better trained, better informed civil service that is more receptive to change. Modernising Government incorporated the Civil Service Reform programme, led by Sir Richard Wilson, and there is evidence that the civil service is changing. It is becoming more customer focused and is providing better access to services. The civil service has brought in new skills and experience, and is developing its own people. It organised 4,000 interchanges in the last year. It has more women in the Senior Civil Service (SCS), up from 600 in April 1999 to 720 in April 2000, and ethnic minority staff in the SCS have risen from 60 in April 1999 to 70 in April 2000. 97% of civil servants work in organisations with Investors in People. These reforms provide a foundation for the future changes which the Government, and the public, wish to see.

  27.  Overall there remains much to do. The task is urgent and its scale significantly exceeds what has been achieved thus far. The focus on the customer and on the four principles is not only a development of existing reform activities but reflects learning about what matters and what works. The message to the centre of government and departments is to focus on a clear set of important standards and to devolve responsibility for delivering them locally. This means a different way of doing things rather than more of the same at a faster pace.

  28.  The relationships between public service organsiations and Whitehall departments are crucial here. Seen from the point of view of service delivery organisations, Parliament and the media, government departments can sometimes appear complex and uncoordinated. Concentration of effort can be lost through too many policy initiatives. Government is therefore looking to increase delegation, to support and give help to the "front line", and to rationalise and channel more of its demands, in order to ease the burden it places on delivery of public services.


  29.  Achieving change across the public services relies on the people who deliver services understanding the case for reform and being clear about their role in delivering it. The focus on customers and on the four principles is a simple message that can be applied as appropriate in different public services. It places attention more closely onto the importance of service standards and encourages providers to take greater responsibility for making the standards more tangible for the public and customers. Performance information and inspection are mechanisms for informing government and the public whether these standards are being delivered, and to what level.

  30.  It is for these reasons that OPSR and the No.10 Strategic Communications Unit are working with departments to articulate the reform agenda and to develop a clear understanding across departments and public services about how these principles can help to deliver tangible service improvements appropriately. OPSR is holding a series of seminars with officials, in conjunction with the Centre for Management and Policy Studies (CMPS), to encourage debate and ensure clear action will be taken to secure change. This could become evident through higher awareness across the Senior Civil Service of the principles of public services reform, evidence of, and reference to, the four principles in the outputs of departments, and evidence of the use of research to track and measure the effectiveness of delivery communications.

  31.  Successful delivery means achieving policy objectives, but delivery will also be judged by the public through their experience of the services they receive or the views they acquire from the media, family, and friends. Improvements in customer satisfaction will be the ultimate test of whether reforms are working. There needs to be two way dialogue between the public and policy deliverers in order for services to build upon an accurate understanding of customers' views. In turn, the public needs accurate information about the services that are available and to which they are entitled.

  32.  OPSR is working with departments to help them ensure they are customer focused and able to assess customer satisfaction in a consistent and robust way. OPSR is designing methods for collecting comparative customer information that can be used to shape policy and inform performance improvement in services across the country and with different client groups. It will deliver a customer satisfaction toolkit to departments by April 2002, for departments and agencies to use to produce comparable customer satisfaction data to a local level later in 2002. This could give the Treasury public spending teams scope to negotiate more customer satisfaction targets with departments in their 2002 PSAs. Also, the Charter Mark scheme is being supported by the Cabinet Office, to encourage improvements in the quality of front line public services.

  33.  The Local Government White Paper is expected to set out a clear vision for strong and effective local government. OPSR has been working closely with DTLR to align their draft proposals with the four reform principles across local authorities. OPSR would seek to continue to work closely with DTLR to enable this vision to be implemented across central and local government.

  34.  The Office has also been charged with examining specific local services, to advise the Prime Minister on how best these can meet the Government's objectives. Working with departments, and others responsible for public services, OPSR will find out about progress in policy implementation and provide advice on how it could be improved. The reforms being undertaken represent an exciting departure in the way government delivers public services. This builds on what has gone before, but is taking it forward through an explicit framework and set of principles. The Office will disseminate the good practice as it is developed in locally delivered services.

  35.  The Office also has a role together with Civil Service Corporate Management and Reform in strengthening the capacity and competence of the civil service to deliver public services reform. This builds on the achievements of the Civil Service Reform programme and departments' own reform programmes. OPSR is seeking to deliver three contributions to help enhance capacity and create the culture of continual improvement that underpins successful delivery.

  36.  First, Improving Programme and Project Delivery (IPPD) is a project to tackle long-standing weaknesses in delivery through inadequate project and programme management. OPSR's drive to improve civil service capacity for delivering projects and programmes forms part of a wider drive to raise departments' performance in delivering their objectives, the work of the Prime Minister's Delivery Unit and that of the Office of Government Commerce, among others.

  37.  Working with other units at the centre of government and with departments themselves, through IPPD OPSR aims to achieve a better match between demand for and supply of project and programme management skills across the civil service, and streamlined monitoring and improved performance in the delivery and scrutiny of projects and programmes, including ways of managing risk. IPPD also aims to strengthen use by policy-makers of project/programme management disciplines and techniques to improve delivery of policy goals. The project is thus developing a common framework for the application of programme and project management techniques across government, alongside better skilled project managers and senior sponsors.

  38.  Second, is a proposal for a change management programme, which is intended to build upon existing good practice. This departmental change programme offers ways of enhancing departments' capacity for "high-performance". It harnesses the benefits of an external view of their performance, drawing in expertise from the public and private sectors. This could help to inform management teams' own assessments and design of their programmes for making the further progress that their departments are seeking to deliver. The approach is tailored to the particular circumstances, strengths and needs of individual departments, helping to focus management attention on the structures and processes that most need change, and on the areas where performance can most effectively be improved.

  39.  The Office is preparing for this way of working with departments alongside experts from others at the centre—such as the e-Envoy, the Office of Government Commerce, the Treasury, and Civil Service Corporate Management and Reform. One aim is for the approach to offer an additional way for the centre to provide support and work with departments, and help to put into practice within central government itself the principles of reform and customer focus on which the wider reform of the public service is also founded. The programme is developing this approach with a small number of departments in 2002, and will extend to other departments in the future.

  40.  Third, there is a review of policy on executive agencies, announced by Ian McCartney MP, Minister of State at the Cabinet Office, on 7 March 2001, when he said: ". . . In consultation with the Chief Secretary to the Treasury, we have decided that it is an opportune time to review the arrangements for Executive Agencies to see what lessons can be drawn from current models. The review will be sponsored jointly by the Cabinet Office and the Treasury . . .". The review is led by Pam Alexander and jointly chaired by the Treasury and the Cabinet Office. The staff of the review team are now part of OPSR. The review is looking at many issues including the relationship between departments and ministers and agencies; the extent to which operational freedoms have been devolved to agencies and the extent to which authority has been devolved from the centre of agencies out to the front line too. The review is also looking at how far the model has encouraged innovation, risk taking and customer focus. The review may have implications for the functions of executive non-departmental public bodies as well. It is expected to report to Ministers by February 2002.


  41.  Reform is a continuous process. There are many lessons from previous and current reforms in the private and public sectors. This will always be "work in progress", in which many are already engaged. OPSR's particular remit is to make a contribution through the development and implementation of the principles of public service reform. OPSR does not have executive responsibility for reforming public services. Rather, it has the job of helping to strengthen and reinforce the competence and capacity of public servants to deliver the Government's goals. In terms of its overall approach to this remit, OPSR is seeking to facilitate and support others in implementing reform in their areas. The guiding objective is the achievement of sustainable improvements which the public values. Specifically, OPSR is undertaking clearly defined projects, each of which has explicit milestones and measurable outcomes. The projects build on the four principles of reform, and are being introduced in order to help ensure further progress is made towards tangible reform in the public services.

Office of Public Services Reform

December 2001

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