Memorandum by Dr Alan Lovell and Dr Mike
Rowe, Department of Accounting, Nottingham Business School, Nottingham
Trent University (PSR 16)
SUMMARY
This paper presents a summary of evidence drawn
from a number of recent research projects examining changing forms
of public management and financial control. The paper suggests
the need to avoid simplistic assumptions about the impact of private
sector-style disciplines on the public services. Rather, a more
nuanced understanding of the context and specificity of each service
might inform an assessment of both the flaws and value of such
disciplines in each context.
INTRODUCTION
1. The Committee's call for evidence identified
a number of patterns and trends in the public services that have
developed over the past twenty years and loosely associates these
with declining standards and the undermining of the public service
ethos.
2. This evidence draws on a number of research
projects undertaken in recent years that have examined changing
patterns of management, funding and accountability in the public
services[2].
The paper will discuss the character of some of the changes introduced
in recent years through the lens of the concept of accountability,
a concept that lies at the heart of issues of fragmentation, ethos
and principles. In doing so, this evidence will both challenge
some of the assumptions that underpin the Committee's call for
evidence and the value of both public and private disciplines
and values.
ACCOUNTABILITY
3. This evidence hinges around the concept
of accountability. The concept lies at the heart of what is distinct
about public services. Indeed, it lies at the heart of the other
six of the seven principles of public life developed by the Committee
on Standards in Public Life: selflessness; integrity; objectivity;
openness; honesty; and leadership. Yet, there is substantial evidence
to suggest that, in practice, the concept has become ill defined
in theory and almost meaningless in practice (eg Rowe, 1999a and
2001).
4. Traditional mechanisms of accountability,
very much associated with traditions of public service, have been
exposed as hollow and fairly meaningless both through their failure
to hold the executive to account and their inadequacy as a form
of redress for individual citizens. In recent years, and in part
in recognition of the weaknesses of such traditional forms of
public service and of accountability (Waldegrave, 1993), a number
of private sector disciplines have been applied to the public
services. The consequence has been to place greater emphasis on
quasi-private forms of accountability (ie corporate governance),
upon financial reporting and audit and upon choice for the individual.
The weaknesses of these forms of accountability have also been
exposed, both by cases of financial misconduct and by evidence
that, in fact, choice is available to only a very few.
5. In recent years, the ideological debate
about a "democratic deficit" (Stewart, 1992; Waldegrave,
1993) has been superceded by a form of value-free paper chase
to apply all mechanisms equally to all public bodies, regardless
of the evidence that the mechanisms themselves are flawed (eg
Weir and Hall (eds.) 1994; Weir and Hall, 1995; Weir and Beetham,
1998).
6. At present, there is confusion surrounding
what is a fundamental principle of public services: accountability.
It is this confusion that, in part, taints and distorts debates
about the role of private sector techniques in the public services
and the decline of a public service ethos.
THE PRIVATE
SECTOR
7. Private sector influence has a long history
in the public sector, one that stretches beyond the past twenty
years, though more clearly evident in recent years. The key features
include not just people but also techniques, principally those
associated with financial and performance management, audit, competition
and other widely accepted private sector management techniques.
These represent an effort to introduce informed control and oversight
of previously opaque public services. As such, they are not in
themselves a retrograde influence. However, they have introduced
several features of concern in understanding and managing public
services. The principal amongst these are briefly set out in the
following paragraphs and expanded upon in the enclosed papers.
Organisational boundaries
8. While the concept of discrete organisations
holds some relevance in the private sector, they hold less relevance
in the public sector. Particularly in those services responsible
for tackling some of the more intractable social problems, such
as offending behaviour or ill health, focusing upon individual
organisations can be to undermine collaboration.
Performance data
9. While simple measures of performance,
such as profit and loss, represent meaningful concepts in the
private sector, such measures miss much that is distinct and relevant
to understanding public services. Performance information, such
as waiting lists, might usefully indicate a problem requiring
further inquiry. However, there is a tendency to manage in order
to meet targets rather than using performance data to inform management
decisions that might take into account other factors not capable
of easy summary in a numerical form.
Performance Management
10. Performance management is stunted and
constrained by an almost exclusive reliance upon an overly limited
interpretation of audit and inspection. The extent to which performance
management can be effectively operationalised, with organisational
learning (continuous improvement in terms of Best Value) being
genuinely operational, is extremely doubtful. To manage solely
on the basis of such potentially distorted and distorting information
is to minimise much of the central purpose of public service.
Reductionism
11. The transformation of recipients/users/beneficiaries
into units or items to be processed rather than understood as
individuals, particularly in a contractual environment, obscures
the very human nature of many of the public services. Such attitudes
permeate the language and culture of organisations concerned to
achieve clearance time targets rather than to consider the merits
of a case more carefully, perhaps calling for more evidence, in
order to reach the best decision in the interests of all.
CONCLUSION
12. While these represent serious concerns,
to argue that the influence of the private sector should simply
be reduced is naïve. There is no golden age to which we might
look to return. Indeed, evidence of failure in public services
can be found in those services relatively unaffected by private
sector techniques (Committee of Public Accounts, 1994; Harrow
and Gillett, 1994) as much as those most clearly affected. Rather,
we need to understand the specifics of each public service, how
that service relates to others, the important elements and the
way in which they might truly be held accountable, regardless
of who is in charge or what organisation delivers the service
(Rowe, 1999b).
REFERENCES
Committee of Public Accounts (1994), The
Proper Conduct of Public Business, London: Her Majesty's Stationery
Office
Harrow, J. and Gillett, R. (1994), "The
Proper Conduct of Public Business", Public Money and Management,
Vol. 14, No. 2, pp.4-6
Lovell, A. and Hand, L. (1999), " Expanding
the Notion of Organisational Performance to Support Joined-up
Government", in Public Policy and Administration,
Vol. 14, No. 2, pp.17-29
Lovell, A., Rowe, M., Harradine, D., Rees-Jones,
M. and Ball, G. (2001), Internal Charging in the Public Sector:
accounting for illusions, London: ACCA
Rowe, M. (1999a), "Joined Up Accountability:
bringing the citizen back in", in Public Policy and Administration,
Vol. 14, No. 2, pp.91-102
Rowe, M. (1999b), "The Accountability of
Public Bodies", Public Administration Select Committee, Quangos,
HC209-II, Vol. II, pp.209-212
Rowe, M. (2001), Public Accountability: understanding
through the accounts of others, unpublished PhD thesis
Stewart, J. (1992), The Rebuilding of Public
Accountability, London: European Policy Forum
Waldegrave, W. (1993), The Reality of Reform
and Accountability in Today's Public Service, London: CIPFA
Weir, S. and Beetham, D. (1998), Political
Power and Democratic Control in Britain, London: Routledge
Weir, S. and Hall, W. eds. (1994), EGO Trip:
Extra-governmental Organisations in the United Kingdom and their
Accountability, London: Charter 88
Weir, S. and Hall, W. (1995), Behind Closed
Doors: Advisory QUANGOs in the Corridors of Power, London:
Channel Four Television
Dr Alan Lovell and Dr
Mike Rowe
November 2001
2 Among others, see Lovell et al. (2001), Rowe
(1999a), Lovell and Hand (1999), copies of which are enclosed. Back
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